Monday, August 3, 2015

There Go My Customers - I Must Follow Them For I Am Their Leader

That title is a paraphrase of a famous quote from Mahatma Ghandi, “There go my people.  I must hurry to follow them for I am their leader.”  Ghandi was both a charismatic and dynamic leader.  While he could inspire a crowd, he also would quickly adapt to changing circumstances.  Even abandoning yesterday’s truth to embrace the current reality. 

Product and service innovators who are seeking to create lasting value will embrace this philosophy.  Product or service value must always be defined from a customer perspective – not an internal perspective.  An internal perspective of value is focused upon cost and price.  An external perspective of value is focused upon demand and satisfaction.  Demand and satisfaction can change overnight based upon numerous factors outside the seller’s control. 

Everyone wants to be the market leader.  But market leadership is hard to gain and hard to maintain.  Customers have a mind of their own and they will decide what products and services provide the most value to them.  The customer determines demand and the customer determine the measurement for satisfaction. Therefore the product and service innovators must stay nimble and react to quickly changing customer perception of value.


While the innovator and seller can stimulate demand, they cannot control it.  Demand for a product or service is not static.  The innovator and seller can stimulate demand through advertising and pricing.  Competition can also stimulate or suppress demand.  A market with healthy and sane competitors will often grow the size of the market, creating more demand for everyone.  A market with unscrupulous competitors can damage the reputation of all sellers – think of the used car industry. 

Outside factors can also influence demand.  Current events can drive sales up or down.  The recent banning of the Confederate battle flag from selected government sites has actually stimulated sales of the flag.  Likewise a product recall or bad publicity can drastically curtail demand.  In 2007 there were many recalls of toys manufactured in China because they had been painted with lead based paint.  Consumers reacted to this news in Christmas of 2007 by avoiding or curtailing their buying toys.  Toy sales were down 25% even among those toys that were not part of the recall.

Innovation will often create demand, but the demand may be from different customers than those targeted.  Roller skate manufacturers never had the skateboard in mind when then created roller skates.  But some surfers in California strapped those onto a box and then a plank and the next thing you know there is a skateboard industry.   


Innovators and sellers have more opportunity to impact satisfaction; yet there may still be elements outside their control.  Satisfaction with a product or service is based upon whether the product or service meets the customer’s expectations.  The product or service is designed to provide a type of value to the customer.  But the customer’s expectations can be influenced by many factors.  The seller has the opportunity to interact with that customer and ensure that the expectations are met.

An element of product marketing is setting the expectations for the customer.  Marketers have a particular category of customer and customer experience in mind when creating both the product or service design requirements and the advertising and marketing materials.  However, there may be other customer segments that use the product or service for different applications.  Their satisfaction was not considered when designing the product or service because it was not even known. 

Further, the customer’s expectations may be changed by their experiences with other products or services.  This experience can change the expectation for what is considered acceptable or high quality.  Because of my experience finding user manuals and instruction books online, I now expect them to be available for every product and I read through them for major products before buying.  If the user manuals or instructions are not available online, I do not trust the company or product and will not buy it.

Leading Customers with Customer Value

So what does this mean about customer value and being a market leader?  Two things.  One affects how you design your product or service and the other affects how you manage customer interactions.

If your products and services are expected to have a long lifecycle, they need to be designed to be adaptive.  A product that is a fad product and expected to be here today and gone tomorrow does not need this capability.  But if your product is to have long legs, it must be able to adapt to the changes in customers.  The changes in demand and changes in expectations will create the need for changes in your products and services.  If these are designed to allow rapid modifications and customizations, they can quickly adapt to the changes.  If you need more information on how to design your products in this manner, contact me.

Second, you must create, maintain, and monitor a regular stream of customer interactions.  It is not enough to survey your customers periodically or conduct focus groups.  These approaches provide “lagging” indicators of customer dissatisfaction. In today’s very fast-paced market, by the time these methods inform you of a problem; your customer’s are gone.  You need real-time feedback on satisfaction.  This will require a monitoring system of customer interactions that is feeding your Business Intelligence system and providing information to both managers and front-line staff about problems and successes.  Again if you want more information on how to design a system like this, contact me.

To lead in the marketplace, you need to be a fast-follower.  Not of your competition, but rather a fast-follower of your customer.   

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