Literally everyone tells you how being customer-centric is an unequivocally and unboundedly good thing. And that the difference between successful and unsuccessful companies is largely down to how well they listen and act on what their customers tell them. And in a product business, you’d be forgiven for assuming that the ‘voice of the customer’ is absolutely crucial to achieving product-market fit. After all, how could it not be?? And every day, in thousands of SaaS companies around the world, product managers are piling customer requests onto their evergrowing backlogs. Which is exactly what they’re supposed to be doing, right?
It’s a truism that without customers you have no business. However, if it was simple as merely acting on feedback, and everyone knows this to be true, then why aren’t almost all companies wildly successful? In my experience, there are plenty of companies that are unsuccessful because they overly rely on customer feedback.
Many years ago I ran engineering at Domain, the #2 property classifieds site in Australia. We were in a heated battle with realestate.com.au, who was the clear #1, and as a management team we were keenly aware that in our category there were very few examples of #2 players remaining in business over the medium term.
With constrained sales & marketing, we felt like product had the potential to provide an advantage. However, our product team had a textbook process where they surveyed user groups for what features they wanted, and we would take the most popular ones and put them on the production line.
Now, the problem with this approach was that our competition was doing the exact same thing - asking the same users the same questions and getting the same answers. So we were both putting out the same features in roughly the same timeframe, and therefore making no competitive progress at all. This was fine for the #1, but death for us.
What we actually needed to do was add features our market was not asking for. Or, putting it another way, we needed to innovate! It wasn’t till we broke from the surveys that we made any substantial progress - one example of this was adding property sales history and price estimates. These were features Domain was able to add first, as a result of an acquisition & product strategy that I put together.
I’ve covered the way many B2B companies get started in this blog post. In short, when B2B companies get their start, it’s generally because of a small number of key customers who then have disproportionate influence on the company’s trajectory. These significant customers are not interested in the company’s success (though they might say they are…). What they are really interested in, is having the product provide increasing value to them, and them alone. This objective can be in direct conflict with the company’s growth goals (build one product, sell it 1000 times…), and so for the company to be successful, it may very well need to actively ignore the requests of its current customers, in order to meet a market need in a sustainable way.
Particularly when you’re establishing product-market fit, or when you’re conceiving of & designing individual features, you’ll often seek customer ‘feedback’. I think this is a sensible activity… to a point. Unless you have a very particular set of customers, then they can’t actually tell you if your product will fit the market. And they can’t really tell you if they’ll use the feature you’re proposing, or if it’s actually ‘easy to use’, or if it’s priced appropriately. Because, in reality, they don’t know.
Is it better to have customer feedback than no customer feedback? Absolutely, yes.
But if you need accurate answers to any of these questions, you have to watch carefully what customers do, and notice that quite often this is different to what they say. You only really know that customers will buy your product… when they buy your product. And you only really know if they’ll use your product… when they use your product. So your product management strategy and decision making process should prioritise behavioural metric collection over surveys, interviews and feedback i.e. How early in our process can we observe customer behaviour, after having asked them what they think?
You, me & everyone else depends on customers. Given that, it’s worth spending the time to understand what they are thinking and feeling, and making informed decisions about how you’ll approach meeting their needs. But it’s important not to lose sight of the larger picture - you operate in a market in which companies come and go. There are strategies that you can employ to stay in the game, and prosper, and executing those strategies depends on you remaining conscious of the roles that both you and your customers play.
A preliminary chat is always welcome. After all, great coffee and red wine are amongst our favourite things.