“As CAC increases, the relative value of features declines and growing a business just becomes that much harder. We’re in a world where we’ve literally been given the answer to success — understanding our customer — not always agreeing, but at least understanding. For the most part we’ve turned our noses up at the notion of actually talking to the people who are ultimately paying us. That’s a scary thought.”
This is an excerpt from Customer Research Benchmarks, a video recently posted by Patrick Campbell from ProfitWell. In the video he analyzes data from 3,000 subscription companies and over 1.2 million different subscription consumers, and the results are hard to swallow.
In a nutshell, businesses do not do enough customer research and as a consequence, product teams continue to build the wrong products.
This is more disappointing than surprising. In the last two years, I’ve talked to large numbers of teams across companies of all sizes. They are all looking for better ways to connect the dots when it comes to understanding customers but very few succeed. The reasons for failure, at least in my experience, tend to fall into four buckets.
These observations may be a bit controversial and I’m sure there are many more reasons why customer research doesn’t happen as often as we want to but here’s a couple of things I’ve noticed over time.
1. Customer champions are often outside the product team (sales, customer support etc) and have little to no influence over product decisions.
I have talked to many customer support teams who have customer champions among them. These are people who want to impact product development and address customer pain points as fast as possible, mostly because they are constantly facing customers and their frustrations and want to see change happen.
These customer champions tend to have no power or influence over the product team. They don’t have clear communication channels or processes to share their customer understanding with those who can make something happen.
These customer champions grow frustrated over time and give up trying. Some leave and try to transition to product management roles where they believe they can have an impact.
In this context, any customer research done by product teams tends to be done in isolation and is rarely shared with customer-facing teams.
2. Product teams don’t know how to get to customer insights and if they do, they don’t know how to translate those insights into customer outcomes.
We all struggle with this one. This is at the core of why product management is hard. However, as with any other skill, the more we focus on deliberate practice the more effective we become. What often happens is that we start customer research activity with little confidence in whether or not we will learn something from it. Maybe this is due to lack of research experience or because of time constraints. Either way, we fail to bring useful insights back to the team so the team quickly jump to the conclusion that research is not useful, so instead of wanting to do more and better research they quit research all together. It’s a self-fulfilling prophecy that slowly kills momentum in any research activity.
3. Junior product managers have bought into tools or popular knowledge without questioning the applicability to their business.
Not every company gets to hire experienced product managers from the start. Many product managers transition internally from engineering or support roles and have to learn the foundations on the job. Without enough experience, junior product managers can fall into the trap of following mantras and frameworks that may not be applicable to their business setting.
For example, it’s easy to cling to the motto, “If I’d asked people what they wanted, they would’ve said faster horses” as an excuse not to talk to customers, or use the jobs to be done methodology superficially, without the appropriate use of interviews and customer observation. This is just part of the natural learning curve in any job, everybody is trying to do their best with what they know.
It takes time, experience and empathy to run useful customer research projects, therefore businesses need to invest in providing the team with the training and the resources they need to do it right.
4. Engineering teams are driven by the wrong incentives.
This is a tricky one and I would like to be as specific as possible here. The problem isn’t engineering teams, of course. The problem is businesses valuing the engineering team’s opinion more than any other team’s. We need to remember that in most organizations, the incentives for engineers are normally focused on shipping often and fast, but are not always tied to customer outcomes.
If incentives are not calibrated to serve customers directly, you can develop a culture where customer-facing teams are treated as second class citizens. It doesn’t matter how much research they do or how good the insights are, if the engineering team doesn’t value that information, very little gets done about it.
As David Cancel, CEO at Drift puts it in this interview about Customer Driven Development:
“You should treat your product and engineering people exactly how you treat everyone else in the company. How are they impacting the customer? Hold them accountable for that too. Just like sales. If you want to talk to me about the latest infrastructure tech out there, I don’t care. What I want to know is did we sell more or not?”
It ultimately comes down to culture. In the worst case scenario, all of the above issues converge in one business and growth stagnates.
What to do?
My two cents here are to check for the following:
- Have we given customer research enough time and resources for us to seriously conclude it doesn’t work for us?
- Have we integrated customer feedback and the voice of client-facing teams into our product decisions?
- Are the engineering and product teams driven by the right incentives?
- Have we disempowered customer champions in the business? If so, why?
I believe most of us understand that being close to customers is the key to success but there is a big gap between understanding something intellectually and changing behaviour and habits.
We all struggle with this but I believe it’s time to start closing the gap between what we say we believe in as businesses and what we actually do. Being customer-driven is a habit. It requires practice, investment and commitment.
I would love to hear about your experience, are there any other obstacles that you believe are stopping you from doing more and better customer research?
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If you’re interested in learning from product teams who are making customer-driven development work, you can read their stories here.