When to listen to your customers and when not to?

Customer centricity has become a buzzword these days. It is so much talked about in business circles and beyond that I wonder how we got this far without exhibiting customer centricity? Is it realization, or affirmation, or simple drunkenness? There are some companies known for being truly customer centric like Paytm, Royal Enfield, IndiGo, D-Mart and iD Fresh Foods, remember here.

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But if you analyze the success of such companies, you would notice a paradox. While customers love their products and services, companies don’t necessarily start with the customer when it comes to designing those loyalty offers. So, so to speak, everything ends with a happy or even pleasantly surprised customer, but it doesn’t necessarily start with those. That is what brings us to the question, when to listen to a customer and when not?

Listening carefully to customers can often be self-limiting, if not downright self-defeating. You need to know which customer to listen to, especially if you hear conflicting demands. Let’s understand the nuances better.

One of the great premises of listening to the customer is that the customer always knows what she wants. The so-called “voice of the customer” is only as good as the customer’s self-awareness of what is indeed desirable and possible, and is severely limited by the vocabulary present. The customer mostly lacks the means to express a demand or desire, because she does not know what to expect.

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Think about how miserable you are in front of a doctor when she wants to know yours exact a problem The best you manage is with symptoms and that too in your private articulation. There the best doctors listen to you well and help you understand your own problem before trying to treat them. Imagine if you have difficulty articulating what ails you or what you want, how much you can claim to know about a client’s real problems. There is a serious gap between intent and content.

This gap is what Clayton Christensen of Harvard explains in his book, The Innovators Dilemma. The innovator’s dilemma is whether to listen to the current customer and remain committed to continuous improvements and incremental innovations, or take a leap of faith and deal with an entirely different set of customers.

Often the disruptive innovations are not palatable to the existing lot to begin with, and therein lies the risk. It’s a trade-off between pleasing the current market versus creating newer markets, of course, with a finite budget and management attention.

Let’s bring the insight back to our question—when to listen to your customers and when not to. To better understand this question, let’s refer to the figure below.

Customers and innovation

Customers and innovation (source: author)

It has two axes: Technological discontinuity and Commercial Logical discontinuity. Low levels of technology discontinuity refer to continuing technological paradigms while high levels refer to disruptive or radical technologies. Think of even greater storage capacities, on hard drives or solid state devices, at the low end of the axis, while cloud computing or quantum computing based storage is at the other end.

Low levels of business logic discontinuity refer to the marginal departure from the way business is run and profits are drawn, while high levels indicate a significant departure. For example, Maruti Suzuki selling cars through a dealership network is a low level of business logic discontinuity, while crowdsourcing cars powered by Maruti Suzuki would be towards the other end.

Essentially, you listen carefully to your customer when dealing with existing business models and continuing (read “more is better”) technologies. In such cases, both you and your customers know what to expect, and such inputs are extremely valuable in driving performance improvements.

If you take a UPI application to your customers and ask what else could be done to it, they can suggest many incremental improvements. They have a basis to work from and they think within the known paradigm. So, it is safe for everyone involved.

However, if you are dealing with an unproven, radically different technology and/or a radically different business model, then you need to momentarily overlook what your existing customers have to say and instead pay attention to the technological possibilities.

For example, by moving away from mail delivery to streaming movies, Netflix did not follow the wishes of current customers. Because the customers were severely limited by their own experiences and, therefore, had a limited imagination. Such a technological push or radical business models must start from the drawing board and radiate outward to the market.

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Think about how Zerodha disrupted the business investment market by not starting with the market expectations, but coming up with an entirely fresh value proposition stemming from a bold business model. Once you pitch it to the customers, they can offer you great insights on how to improve it, but you have to start by taking a leap of faith yourself.

Now you understand what Henry Ford meant when he famously quipped, “If I asked people what they wanted, they would say faster horses.” It is not born from arrogance or a lack of customer centricity, but from an innate appreciation of technological possibilities and business model discontinuities. Almost a century later, Steve Jobs echoed the sentiments, declaring, “People don’t know what they want until you show it to them.”

Since you don’t get involved with radically new business models or technologies that often, the maxim of listening to your customers applies. But every now and then, you have to turn a deaf ear to the outside chatter and listen to your inner voice, because the real genius lies within.

(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)

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