Ford

The $3.1 Billion Reason Why Your Customers Should Always Come First

What you can learn from Bill Gates’ favorite business case study

Kelly Bertog
Published in
6 min readMar 10, 2020

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Recently, Ford had the pleasure of announcing that their iconic F-150 pickup truck took home the trophy for 2019’s top-selling vehicle in the U.S. An incredible feat on its own, this is especially astonishing considering that the F-150 has earned this honor for a mind-blowing 43 consecutive years.

That’s right, this product has remained atop the charts since 1976! There are very few companies out there with any sort of track record like this, and Ford should absolutely be commended for longevity, and its ability to evolve its F-Series product line over many decades and several generations of consumer tastes. However, that’s not to say that Ford, like any company that’s existed for over a century, hasn’t had a few hiccups along the way…

Anyone Remember the Ford Edsel?

Depending on your age, you may have never even heard of this car. But if you’re old enough to remember, the Edsel probably stands out there alongside Betamax, New Coke, and the Apple Newton as one of the biggest product flops of all time. In fact, Bill Gates has cited the Ford Edsel as his absolute favorite business case study, as it teaches us what happens when you care more about your product than your customer.

Business Insider

The Car of the Future

From 1955 to 1957, Ford teams toiled in secret on what they dubbed “the car of the future”. They promised it would be the most exciting development in automobiles since Henry Ford himself has debuted the Model T. By the time the Edsel launched, the company had already pumped an astonishing $250 million into development (that’s $2.2 billion in today’s dollars).

Much of this came in the form of extensive research on the car. Ford conducted more consumer polling than it had ever done before. With this much consumer interaction, they were sure to have a hit!

Needless to say, spirits were high ahead of the launch. But when the Edsel was finally introduced to the world in September of 1957, it was immediately panned by auto critics and consumers alike. It was too big. It was too expensive. It used too much gas.

The Edsel may have been the car of the future, but it turns out that it was a future no one wanted.

The Fallout

With immediate sales of the Edsel lackluster at best, not to mention a whole host of production issues causing problems on the line, Ford Executives had a real problem on their hands.

They tried to save the vehicle with new product iterations in 1959 and 1960, but at that point, it was too late. A mere three years after introducing the Edsel, Ford closed the project down for good, at an estimated total loss of $350 million ($3.1 billion in today’s dollars). It was an objective failure for the company.

Where Did It All Go Wrong?

For years, Ford tried to determine exactly what went wrong with the Edsel. There were countless problems that plagued the project from the start. But one of the most damming went all the way back to the very early stages of its development.

Remember the incredible amount of consumer polling that took place?

As learned through interviews with countless Ford team members and executives, it turns out that a great deal of this polling was ignored. Quite simply, Ford decided its vision for the product was more important than the consumer need for the product. And when they did incorporate consumer feedback, they did so without any real focus (which is likely why the Edsel launched with a whopping 18 model variations — clearly an attempt to please everyone).

When it came to the Edsel, Ford cared more about the product than the customer.

Ford decided that “if we build it, they will come”. But unfortunately, “they” had no interest in what was built. By failing to truly engage and listen to consumers, Ford missed the memo on the changing tides of the automobile industry. An industry that would soon blossom from the gas-guzzling extra-large road cruisers of the 1950s, to the small, eco-friendly cars of the 1960s (a decade in which the Volkswagen Beetle became the undisputed global king of cars).

The Takeaway

Ironically, up until the Edsel, Ford had been incredibly focused on its customers. In fact, the very foundation of Henry Ford’s Model T would not have been possible without his passionate pursuit of improving the lives of millions.

If Ford’s top priority had been creating the most feature-rich product he could, he would have attempted to build an even fancier “horseless carriage,” as the name of game at that time was building one-off, custom luxury cars for the extremely wealthy. But instead, Ford’s top priority was the mass American consumer, and the nation’s spirit of adventure. He realized he could feed this spirit by developing an automobile that was easy enough to use and affordable enough for millions to own. With this focus on the average consumer in mind, he worked backward until he developed such a product: The Model T.

Sure, The Model T lacked the many features seen in other custom automobiles of the day. But that didn’t matter, because those features didn’t mean anything to the mass American consumer if they couldn’t afford the vehicle. By focusing all his attention on improving the lives of his customers, Ford made the realization that above all else, the main feature his product needed more than anything was affordability.

And Edsel disaster aside, this passion for putting the customer over the product has carried Ford for generations. By focusing relentlessly on its customers, Ford has consistently remained ahead of the curve. This includes creating a domestic answer for rising consumer interest in Japanese compact cars with the launch of the Ford Taurus in 1980, which would go on to become the best-selling car of that decade. Same goes for its innovative, ahead of curve lightweight, suburb-friendly trucks (Bronco; Explorer), and the decision to create an in-between class of pickup that could work hard, play hard, and still fit in the driveway (the F-150) — a decision that’s been paying dividends for 43 straight years.

Applying the Lesson

It’s no wonder Bill Gates cites the Edsel as his favorite business case study — there is much to be learned. But the core lesson is this:

You must care more about your customer than your product.

That’s why when I launched my new business YOURS, a non-alcoholic wine and beer brand, I focused exclusively on the outcomes my customers were looking for, not the features of the product.

As the famous business school saying goes “No one wants a drill. What they want is the hole.” In the case of the Edsel, all the fancy features in the world didn’t make up for the fact that consumers didn’t ask for them. In fact, it was just the opposite. Consumers were asking for smaller frame sizes and better gas mileage, and the Edsel ignored all of this in the name of cramming in more fancy features born out of the Engineering Departments at Ford.

Thankfully, the story of the Edsel allows us all to learn a valuable lesson without having to endure a $3.1 billion failure. Build it and they will come is no longer a viable path to profits. Instead, you must be passionate about your customers. Their needs. Their wants. Their problems. Their desires.

If you’re looking to build a company that can last a century, the path is clear: your customer must always come before your product.

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Kelly Bertog
The Startup

Entrepreneur obsessed with marketing, startups, and failure. Love non-alcoholic drinks and building YOURS to support non drinkers everywhere. www.SipYours.com