Customers are notoriously bad at communicating. On second thought, I take that back. There’re actually quite good at telling us what they think they want. What they’re not good at is figuring out (and communicating) the things they’re willing to pay for. And the difference between the two is quite profound.
Steve Jobs was right when he famously eschewed listening to customers. He was said to hate traditional market research and commented many times, “Customers don’t know what they want.” Actually, what I think he meant was, “Customers don’t know what they want to pay for.” Jobs recognized that customers were notoriously bad at predicting their own purchasing behaviors. The products and features that they said they liked weren’t necessarily connected to the products and features they were actually willing to pay for.
So if it doesn’t make sense to listen to customers, what do we do? Do we just exclude the vast amount of customer insights available to help shape our product development process? Well, not exactly. Instead of listening to what customers say what they want, we need to observe—observe what customers have done in the past, observe the various triggers that customers react to, observe the trends in their buying habits, and observe the correlations (if any) between what customers say they want and what they actually purchase.
If Steve Jobs had any unique or magical insights into consumer behavior, it was that he knew observation of past behavior was far more valuable than listening to customers predict their future desires. And just because Jobs felt that customers didn’t know what they want, it didn’t mean that Apple developed all of their game-changing products in a customer-free vacuum. What Apple was really good at was observing past behavior of its extremely loyal customer base. The company did this on both a personal level through the myriad one-on-one interactions at its Apple stores, and on a much larger level with the millions of purchase data points that have flowed through Apple’s website. Apple didn’t bet the farm of their wildly successful product launches of iPods, iPhones and iPads because of some magical ability to predict customer behavior; it knew pretty much exactly how customers would react. And it knew this, again, because it observed.
So how do you best observe if you (like the vast majority of us) don’t have the big-data resources like Apple does? I would first argue that it is probably easier, given that most small businesses know their customer base far better than large corporations. But the key, again, is to observe. Use your eyes, not your ears.
Perhaps the most obvious place to start is in your day-to-day interaction with customers. Frame your conversations in such a way so that buying preferences—not just likes and dislikes—are highlighted. Do the same in your customer surveys. Don’t ask customers whether they like (or dislike) about a proposed new feature or product; instead, ask them which of these new features listed they would be willing to pay for—and be as specific as possible with the price point. Instead of sending the survey out to all customers, send it out only to those customers whose observed buying habits have a reasonably strong correlation with their survey responses.
And lastly, always make note of what customers say and do. Write it down. Keep the information handy. Understand the different correlations between what customers say they want and what they actually purchase. Dig deep into the information to learn the various triggers that prompt customer purchases.
Customers may not know what they want, but they do give off signals that make it easier to understand purchase behavior. The sooner you open your eyes and observe their behavior—both in coming to the decision and then acting on it by making the purchase—the faster these signals will become apparent…and the faster you will be able to use them to learn not only what customers want, but also what they’re willing to pay for.
