Do You Know What Your Customers Are Really Buying From You?


Share on LinkedIn

How does an enterprise create sustainable value? Through listening to customers and innovating products and services they want to buy? Or by creating a product and hoping the world beats a path to its door (or website) to buy it?

The better answer—listening to customers and innovating products and services accordingly—plays well in PowerPoint presentations under the Why We’re Customer-centric banner, but many truly smart people still don’t get it.

An article, The Innovation Illusion, by Sergio Zyman, contains a compelling real-world example. “While Sony was busy making colorful new versions of personal, portable CD players, Apple was out there redefining portable entertainment. Sony should have introduced iPods, not Apple. So what was the domain of Sony is now Apple’s forever.”

If Sony can find solace about squandering an opportunity it created almost 30 years ago, it’s in the fact they have plenty of company. In February, Polaroid Corporation announced it would cease manufacturing virtually all of its instant film, closing three plants in the process. Polaroid’s explanation: “marketplace conditions,” which is business-speak for “so few people want to buy our products that we can’t afford to produce them.”

If you were born before 1980, you’ll recognize these other not-seen-lately products to add to the dustbin: water beds, dustbusters, cigarette vending machines, mimeograph machines, and multi-media all-in-one stereo systems. The list goes on. The all-important wall-mounted pencil sharpeners that used to adorn almost every school and workplace? Made obsolete by computers and mechanical pencils. Many of the companies that were dominant suppliers are no longer in business. Marketplace conditions also likely claimed the financial stability of the ecosystems of people and companies that produced these products—parts suppliers, retailers, resellers and distributors, and sales forces.

So why do some companies closely tied to blockbuster successes like Polaroid Film and the Sony Walkman lose momentum while other companies perpetuate through other offerings? A new book, Think Two Products Ahead, by Ben Mack, explains why, making a case for understanding customer need and building brand equity to support it. Mr. Mack supports his point by describing how in the late 1800’s, Wells Fargo transitioned from a delivery company to a financial services company by understanding that trust was what their customers were really buying. “Trust is the essence of the Wells Fargo brand, more than its physical banks, checks, or even its name. The name became a symbol of this trust, but without this trust, the company would have evaporated when the government took over Wells Fargo’s express business. It was the customers’ willingness to do business with Wells Fargo that allowed it to continue when the business suddenly had to switch product offerings. It was the business managers leveraging Wells Fargo’s common thread that facilitated the company finding new business opportunities.”

What creates the success-failure chasm between companies like Wells Fargo and Sony and Polaroid? Could it be in the questions they ask—or not? Did Wells Fargo survive through astute introspection? Were senior managers from Sony and Polaroid so enamored with their own revolutionary technologies that they failed to later ask the same questions that ironically might have helped create their own breakthroughs? These questions include:

What does our next customer want to buy?

What emerging forces will impact our business?

Are there new business models or technologies that should be adapted to deliver radical improvements in the value we provide?

What proprietary advantages must we exploit to sustain or improve our market position?

Are there shifts in market power or industry fragmentation that create new sales opportunities?

A historical comparison will prove that asking questions such as these—and taking action on the answers—have played an important role in every successful product or business venture. Curiosity has great innovative power.

The next time I nostalgically remember a product or company made newly-extinct by marketplace conditions, I’ll just say “We bought one of those! It worked so great at the time.” But I won’t need to guess about what happened.


  1. Great blog, Andy!

    I think some think that a customer-centric business is as simple as
    1. asking customers what they want
    2. giving it to them

    That’s a good start, and if your competitors don’t do it, this may give you an advantage for a time.

    But customers don’t always know what they want. Companies that innovate are also being customer-centric, by giving customers what they need, even if they couldn’t express that need.

    In the 1992 movie “White Men Can’t Jump,” starring Woody Harrelson and Wesley Snipes as basketball hustlers, Snipes says at one point when they were talking about Jimi Hendrix, “There’s a difference between hearing and listening.”

    I think that sums up a problem that some companies have. Even when they think they’re listening to what customers want, they don’t always hear what customers really need. Until a competitor comes along to fulfill that need. And then, it’s often too late.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  2. Hmmm. this opens my eyes. I am an evangelist for web analytics and have been presenting + writing in many places that one of the roles of web analytics is to help marketers listen to their customers.

    For example, car manufactures watch what prospects are configuring using the online car accessories configurators on the manufacturer’s websites. They use the collected data to learn more about desired packages / combos / etc. What’s nice is that this data can be segmented by geo location and sometimes even demographics etc. data.

    Alas, what I failed to realize is what Bob points out too. If it isn’t on the website, web analytics isn’t going to reveal what customers want. Even on the site search box of few people are going to type in “hip mp3 hard drive based portable shock resistant music player”. Even if they did, most web analytics reports are ranked by volume, so a few innovative voices are going to get drowned out by more frequent search terms.

    So where should marketers look for innovation then? Inside? Ahead apparently.

  3. The world is so complex today that most of us would agree that product innovation would grind to a halt without sophisticated analytics. Yet for all the multi-variate confusion we often create, I frequently pause when I read a a plainly-stated insight that clearly was the progenitor many great business decisions. Recognizing that trust was what Wells Fargo customers were buying was one.

    Another was when Charles Revson of Revlon said, “In the factory we make cosmetics; in the drugstore we sell hope.”

  4. I would argue that customers already are telling you what they want, but they’re not given an outlet for it. Or rather, they are given an outlet, but businesses are not collecting the data. Consider these two recent experiences I had.

    I got an email from Amazon telling me that because I had bought a booster seat I might be interested in another booster seat. I went on the web site and sent a message to customer service, suggesting that, because the child I had bought the seat for was now 8 years old, Amazon might consider factoring the passage of time in their email recommendation algorithms and sending me products for 8-year-olds. I got a form letter in response telling me how I could go on the web site and edit my recommendations. That’s not what I meant. No one there read my suggestion.

    I was at the grocery store and asked the meat department worker if they had any chicken breasts on the bone. She said no, there wasn’t much demand for them. Apparently, people in my neighborhood like only thighs, drumsticks and “parts” on the bone. Breasts, they like boneless and skinless. How did she know? If they don’t put the chicken out, no one will buy it. Ergo Q.E.D. no demand. Which came first? The lack of chicken or lack of demand? But I had a demand! And the meat department worker made it clear she wasn’t going to run it up the chain. So no one would know there was a demand.

    I tell customer service reps all the time suggestions for products I wish their companies would make or offer. And they tell me thanks, but they don’t have anyone to relay my thoughts to. I get all those store receipts asking me to call a number and take a survey. But they’re all just forms of the NPS “would you recommend?” They don’t allow unstructured input. So I would suggest businesses invest in some form of a “suggestion box.” They might be amazed at what they hear.

    Gwynne Young, Managing Editor, CustomerThink


Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here