When to listen to your customers and when not to?

Customer orientation has become a buzzword these days. There is so much talk about this in and out of the business community that I wonder how we got this far without being customer centric? Is it realization, demand, or pure gas? Some companies that are known to be truly customer-centric like Paytm, Royal Enfield, IndiGo, D-Mart and iD Fresh Foods come to mind here.

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But if you analyze the success of such companies, you would notice a paradox. While customers love their products and services, companies don’t always start with the customer when it comes to developing loyalty offers. So, to say, everything ends with a delighted or even pleasantly surprised customer, but does not always begin with them. This brings us to the question of when to listen to the customer and when not?

Listening carefully to the customer’s point of view can often be self-limiting, if not entirely self-evident. You need to know which customer to listen to, especially if you hear conflicting claims. Let’s better understand the nuances.

One of the great prerequisites of listening to the customer is that the customer always knows what she wants. The so-called “voice of the customer” is only as good as the customer’s self-awareness of what is really desirable and possible, and is severely limited by existing vocabulary. The client often lacks the means to express a request or desire because she is not clear on what to expect.

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Think about how miserable you are in front of the doctor when she wants to know yours accurate a problem. You manage best with symptoms and also in your private articulation. Here, the best doctors listen to you well and help you understand your problem before trying to solve it. Imagine if you struggle to articulate what ails you or what you want, how much you can claim to know about a client’s real woes. There is a serious gap between intent and content.

This gap is explained in his book by Harvard researcher Clayton Christensen, The innovator’s dilemma. The innovator’s dilemma is whether to listen to the incumbent customer and remain committed to continuous improvement and incremental innovation, or take a leap of faith and appeal to a completely different customer base.

Disruptive innovation is often unpalatable to the incumbent party, and this is where the risk lies. It’s a trade-off between pleasing the current market and creating new markets, of course, with limited budget and management attention.

Let’s get back to looking at our current issue – when to listen to customers and when not to. To better understand this question, let’s look at the image below.

Customers and innovation

Customers and Innovation (source: author)

It has two axes: technology disruption and business logic disruption. A low level of technological disruption refers to sustainable technological paradigms, while a high level refers to disruptive or radical technologies. Think of even more storage capacity in hard drives or solid-state devices at the lower end of the axis, while cloud computing or quantum computing-based storage is at the other end.

A low level of business logic disruption refers to a slight deviation from the way the business is run and how profits are made, whereas a high level indicates a significant deviation. For example, Maruti Suzuki selling cars through a dealer network is a low level of business logic break, whereas pooling a crowd of cars run by Maruti Suzuki would be at the other end.

Essentially, you listen carefully to your customer as you work with existing business models and maintain (read “incrementally better”) technology. In such cases, both you and your customers know what to expect, and such information is very valuable in improving performance.

If you take the UPI application to your customers and ask them what else could be done beyond it, they can suggest many incremental improvements. They have a foundation to work on and think within a known paradigm. So, it’s safe for everyone involved.

But if you’re dealing with an unproven, radically different technology and/or a radically different business model, then you need to put aside what your existing customers are saying for a moment and focus instead on the technological possibilities.

For example, when moving from mail delivery to movie streaming, Netflix ignored the wishes of its historical customers. Because customers were very limited by their own experiences and therefore had limited imaginations. Such technological advances or radical business models must start from the drawing board and radiate to the market.

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Think about how Zerodha disrupted the retail investment market by not starting with market expectations, but by developing an entirely new value proposition stemming from an audacious business model. When you do it in front of customers, they can give you great insight on how to improve it, but you have to take a leap of faith yourself.

Now you understand what Henry Ford meant when he famously quipped, “If I had asked the people what they wanted, they would have said faster horses.” It was born not from arrogance or a lack of customer focus, but from an innate understanding of technological opportunities and business model disruptions. Nearly a century later, Steve Jobs echoed these sentiments when he said, “People don’t know what they want until you show it to them.”

Since you don’t get involved in radical new business models or technologies that often, the principle of listening to customers applies. But every now and then you have to turn a deaf ear to the external chatter and listen to your inner voice, because the true genius lies within.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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