In today’s unprecedented time, the future of many companies will be dependent on how they reinvent their existing product development process, by keeping a close check on changing customer preferences. Gone are the days of hundred face to face interview when product teams used to literally sit side-by-side with customers to get their feedback. There are options to leverage virtual interviews, but we all know that building a close feedback loop and engaging a customer requires much more than a video call, survey, or feedback form.
Get a bang for your buck – Learn from others
“We don’t have to waste our time learning how to make pastry when we can use grandma’s recipes.” ― Orson De Witt
Where do technology companies draw their inspiration from? There are many examples from the non-technology markets where companies have successfully established a well-defined customer engagement model. In industries like fast-moving consumer goods (FMCG), the manufacturing cost is high, distribution is multi-channel, and margins are low, compared to the technology market. Still, some companies have a loyal customer base with a solid market presence that helps them maintain their position as market leaders, for years.
How have these companies been so successful that their every move looks like a step in the right direction? They must be doing something good that the success rate of their products is way higher than the normal industry standards. This article covers use cases and examples from two leading companies that are among the world’s best-known and most valuable brands. These companies get the best ROI on their overall spend and there are multiple reference points for technology companies to adapt and follow.
Importance of Customer Perception
“The customer’s perception is your reality.” – Kate Zabriskie
In the early ’80s, soft drink consumers were gravitating to low or no-calorie brands, and Coca-Cola’s business in the U.S. was struggling. They started looking for the ‘big idea’ and launched a diet version of coke after lots of brainstorming. The diet coke was very well received and it resolved one of the major concerns of their loyal customer base. The results were astonishing, and the Diet Coke brand is still one of the leading four brands of the Coca-Cola Company.
In the technology market, there is a problem of plenty, where customers are spoiled with so many choices that they don’t think twice before switching their loyalty from one product to another. To overcome this problem and engage customers, technology companies try to pivot too much or too fast, with the hope that they will soon hit the sweet spot. Unfortunately, this doesn’t happen most of the time as too much tinkering with the core offering leaves customer confused and disengaged.
On the other hand, when customers notice that there is a continuous effort to solve their biggest pain-point, they feel valued and become loyal customers without depending too much on loud-speaker marketing. Technology companies should focus on solving one problem at a time that is centred around the core value proposition. This can only be achieved when there is clearly defined success metrics for their customers, with a deliberate attempt to avoid the temptation of the feature-checklist syndrome.
Know your customers first
“Everything starts with the customer.” – June Martin
In its 47-year history, Starbucks has transformed from a single coffee bean store in Seattle to 30,000 cafés in more than 70 countries. When the first Starbucks store opened in 1971, they started by selling coffee beans. For a decade, the Starbucks store sold just beans and nothing else. Once those gourmet beans became popular and profitable, they started selling coffee drinks before opening stores in other locations.
If we compare this with the high-technology market, then trend looks a little different. In the last decade or so, there are plenty of examples where companies tried to be the price leader by offering a galore of discounts, in anticipation of establishing a loyal customer segment.. But it doesn’t help in the long run, because high customer onboarding doesn’t directly translate into high customer retention – without which it is impossible to build a sustainable business model.
Starbucks worked hard to make itself synonymous with coffee in the mind of coffee-lovers who don’t mind paying a premium for their daily cup of coffee. Similarly, technology companies should start with a clear and defined understanding of their growth engine, looking at one segment at a time. It doesn’t make much sense in adding unnecessary complexity with too many personas or markets, when there are no positive signals from one area for a sustainable period.
It takes consistent effort to build a product with a loyal fanbase, but it can be done using the small value-adds that increase the overall satisfaction level of the customers. Another key point to remember is that the focus around non-functional requirements like accessibility, performance and easy workflow should not be compromised. The ‘ease-of-use’ is what gets customers hooked to a product.
This article covers only a few of the use cases from the non-technology market, but I hope I’ve been able to demonstrate how technology companies can adopt a slightly different approach to the standard product development and customer engagement tactics.
Despite having a metric-driven and data-obsessed mindset, technology companies struggle due to a lack of understanding of the customers’ real needs. These needs cannot be understood or defined in metric terms or numbers. The data can complement the understanding of the pre- or post-purchase usage behaviour, but the real product-market fit happens only by analyzing the small customer data-points. These data-points are driven by customers behaviour and attitude that FMCG giants have mastered quite well.
By Sushant Mathur, Manager – Product Management, Sabre Corporation