Let customers lead your organisation to success

http://www.economist.com/surveys/displaystory.cfm?story_id=E1_PSRVTGG
The rise of customer power means that to be successful in an increasingly competitive globalised world you have to listen to what customers want.
Look at the Innocent Drinks newsletter ( http://www.innocentdrinks.typepad.com/ ) in which they regularly ask those customers who've liked their product enough to join the mailing list to vote (in their thousands) for what they want next!
A link takes you to a voting site, where you answer questions on your preferences and which of several possible new products you'd like most. And then they do what the customers want. Simple, but brilliant, as they're guaranteed to be doing what customers want most — because that's what they asked for! That's as close to a guarantee of success for a new product launch as you're going to get.
They are, in my view, the leading runner in a new type of organisation - the "customer-led organisation", or CLO.
Tesco, arguably, could be part of this group too, as they're the biggest database marketer in the world and use their Clubcard loyalty card data to find out what we're wanting and offering us discount vouchers for items we actually buy.
The antithesis of the CLO are firms like the mobile phone makers who are relentlessly product-centred — adding new features customers haven't asked for.
Why? Partly because they believe new technology and features will give them competitive advantage (maybe to early adopters, but not to most of the rest of us) but also because network operators want to recoup their licence fees by charging us for using whizzy new features like videocalling on 3G or mobile TV.
The problem is, most of us didn't ask for it, so we won't use it! A survey showed most people don't use extra features for their own sake — only things which fit in with their existing lives.
But why would you ignore/fail to consult customers?
I reckon it can often be linked to the kind of “father knows best” paternalistic culture seen in top management of organisations, as those at the top feel their years of experience getting there best qualify them to judge what’s wanted. The trouble is their mindsets are all too often worlds apart from those of customers who are not like them – perhaps young and/or female. How can they really know what they want or need?
It would be interesting to see if there’s a correlation between the age of top managers and their organisation’s user/customer centricity.
But this kind of product-centredness can also be an industry paradigm into which they become engendered – look at how product-centred most newspapers are, especially compared to magazines – which have been created and altered based on market research findings for many years.
A curiously long-term successful company which has been famously largely product-centred is Sony.
The philosophy of product development created by its founders was that customers can’t tell you what to make because they don’t know what you’re capable of making. The result was decades of being product-centred with the belief that if only the customer could be educated, he or she would be what the engineers had created.
Despite this Sony has thrived, but had to offset the cost of the expensive innovations (like MiniDisc and DAT) which failed to big mass market hits from the ones which have met genuine existing mass needs (CD, Walkman, Trinitron colour tubes).
In more recent years, though, I suspect Sony has shifted more towards listening to what customers want rather than trying to educate them to want what they’ve made.
The former is the way of the CLO — and the only way to do efficient, and ultimately successful, product development. It’s the definition of marketing — ask people what they want and give it to them! Simple, but all too often ignored.

Stick out or stick on the shelf

The Economist has a piece about Kraft Foods in its new issue (sorry, the online version is subscribers-only) in which the immortal phrase “Pricing is transparent, value is opaque” came up.
Very true and never truer than today, when prices are usually easily compared by the Web.
Which is why all people selling goods and services need to make sure their marketing emphasises how their offering is differentiated from the rest.It’s one of Porter’s three basic strategies – niche, cost-focus and differentiation – but it’s still valid today, however much we seek to make marketing more complex and multimedia.
Stand out and you have a better chance of being selected.