Your Customer Isn’t Always Right
From the largest of the Fortune 500 to the smallest startup, no business is one of infinite resources. You have a certain amount of cash, and then it’s gone. This reality clashes with an underlying value of customer service; customer correctness. It’s impossible to have limited cash and adhere to the slogan that your customer is always right. He’s not.
If you fail to realize this early in your journey you will never get where you intend to go.
Customers Are Different, but Your Strategy is Singular
Return to the premise; you have limited resources (like everyone). You also have a big vision. You also have a plan to get there. And you finally have a set of customers that are working with you.
It’s easy to punt on strategy and follow the adage that your customers are always right. It’s a nice mantra that will help ensure your service standards are high. It will also ensure you are always making decisions in a manner that benefits the people using your products and services. But it’s a cop-out.
Operating a business requires more thoughtfulness than a tagline offers.
You see, your customers can be varied in nature. Some are big… others are small. Some are visionaries… others are laggards. Some are hackers… others are bureaucrats. No two customers are exactly alike. But the way in which you prioritize a software investment inherently treats your customer base cohort as if it were singular. You have limited resources. You have limited time. You write code once. And then you ship it everywhere. Even worse; you typically start your journey with just one product (whether you’re an entrepreneur or a product manager in a large corporation).
It’s on you to pick a strategy and a set of customers that get you where you need to go — defining how Step 1 leads to Step 2 leads to Step 3 and how you eventually end up as king of the market of your choice. Your strategy has to be a sequenced set of activities that will carve out a differentiated position in a desirable market. Those activities need to be ordered in a way that enable you to go from step to step. Because of that, your activities can’t be based solely on the whims and desires of your customers. It’s important that you build a product that delights a group of users; that much is table stakes. But you also need to be realistic on those users that you can’t satisfy without deviating from your plan.
Far too few product leaders have the courage to walk away from customers in the early days of their development. Teams get stretched thin because of this fact. With a focus on satisfying customers of all varieties and keeping them happy, they end up under-delivering to all. They can’t free the capacity they require to get into their next markets (an HBR study suggested for instance that many fast growing tech companies have 40% or more of their development capacity focused on yet to be offered features and products). With teams dedicated to customers of all types, freeing that type of resource is nearly impossible.
Those that do pick customers boldly often follow the money. “Maybe the customer isn’t always right. But certainly your best customer is always right!” Wrong.
Your highest paying, most demanding customers and those that can support your strategy are often different. When Steve Jobs targeted K-12 schools as major buyers of the Apple II, it wasn’t because they had the deepest pockets. Those with the biggest budgets and deepest pockets were the ones that were served by the likes of IBM and DEC. Instead, targeting an underserved (and underbudgeted) set of customers allowed Apple to develop the PC in the spirit of putting a computer on every desk.
Your strategy has to define the set of customers you choose to serve — not just the activities that you aspire towards.
Even the Most Customer Centric Companies Don’t Try to Please Every Customer
Large companies don’t come to Amazon’s cloud with the intention of specifying the hardware that their software runs on. Many companies do have software with very specific hardware requirements. And you can be certain that there are server farms around the globe with highly specialized, certified hardware. They just don’t sit in Amazon’s racks.
Customers know what AWS is there for and what it isn’t there for. They have service providers like CSC and HPE for that purpose.
Early in my career, I was lucky enough to spend time learning from Clayton Christensen. Formidable as the author of The Innovator’s Dilemma, Clay offered even more helpful advice in the form of everyday wisdom. One of the tidbits of customer centric strategy that Clay provided had to do with the role of marketing. Clay believed that marketing’s role in the early days of consumer marketing was one of demand generation (few would contest this point). But Clay regularly pointed out that in a world where you can reach customers quickly and easily — part of the job of a marketer was to make it clear when potential customers shouldn’t buy your product.
Clay saw the risk of being driven off your optimal path. He also realized that businesses have more tools today at their disposal than ever before to attract customers. The combination of these two facts is dangerous. With a few dollars spent on Google Adwords you can acquire a paying customer. But if you’re not thoughtful about how you listen to your customers and what you focus your development efforts on, that paying customer can very easily become a product management liability.
Clay’s advice was to make it clear who a product was intended to help and who it was not intended to help. No one would go to “The Dollar Store” hoping to get luxury goods on discount. By turning the wrong customers away, leaders can stay focused on the strategic path they set upon.
Why Empathy and Conviction are More Important than Customer Satisfaction
If customers can lead you down the wrong path and it’s your job as a leader to deliver both results to your team and value to your customers, satisfaction can’t be the only metric that you guide your decisions based on. Surely, it’s always going to be an important metric of whether you’re making the right decisions; building, pricing, and delivering product in a way that’s sustainable. However, empathy and conviction are even more important.
Why? Empathy and conviction are the characteristics that will help you deliver against your strategy while earning the trust of your customers, partners, and employees.
Empathy is the tool that will help you understand who is right for your product and who is wrong for it. You need to put yourself in all potential buyers shoes, understand their problems, learn what drives value for them, and then decide authentically whether you can deliver in the short term.
In the long term, you have a strategy that will let you move from Step 1 to Step 2 to Step 3 and beyond. Obviously, with new learnings that strategy might evolve. But if it’s directionally correct — that strategy is your key to serving more customers, in the way they deserve to be served over the long term. Conviction is the tool at your disposal to continue on that path. Conviction is what your team requires to understand why you might walk away from a poorly fitting customer today, even though they are offering you cash (and sometimes a lot of it). Conviction is what you need to sequence the steps in your plan and stay on the path. Conviction is what keeps you focused on building something substantial, as opposed to just building something.
With both empathy and conviction in tow, it’s quite easy to understand why your customer isn’t always right. Because, quite frankly, sometimes you have the wrong customer.
