Focus on the Customer

Jeff Bezos, during a pre-peak meeting once said to a small group of us that there will be many, many winners on the internet. He said that some follow the close-follower mentality and those companies focus on the competition. He continued to say that Amazon has and always will be customer obsessed. He vowed that neither he nor Amazon would ever focus on the competition. He said that customer happiness is the right and only solid thing that we could ever hope to spend our time on. Focusing on the customer breeds innovation and ensures healthy direction. In creating great products, software, or companies, his words are good words to live by.

Often I hear people focused on the competitor. This approach is not only lame, but misguided. The competitor-obsessed approach often creates products that nobody wants. The excellent book The Design of Everyday Things points out that simplicity and a focus on the customer’s success ought to be the outcome of products — from software to radios — any product. But, that’s not often the case. I wonder why?

I can think of several reasons:

  1. Creativity and Misguided Effort leads to featuritis — Featuritis is the act of too many features where a great percentage don’t fulfill a real human, customer need. This is also known as “Feature Bloat.”
  2. The Features Arms Race — the act of being “one-up” on your competitor on the features list.
  3. Pure stupidity and utterly forgetting the customer and her real needs.

I’m sure you can think of more. It’s a tragedy that the casualty of poorly-designed products, software, services is the customer. From their perspective, the competitor-focused strategy leads to the chart below, developed by Kathy Sierra:

software development, features

 

I definitely agree with Kathy’s curve above. What has been your experience as a user of products?

One way to avoid the above result is to focus on the customer and abandon the competitor-focused strategy all-together. Okay, that’s good, but there is a whole different effort in determining user’s needs and then prioritizing them. Determining user’s needs is a whole science in itself that I’ll leave alone for now, but cover in future posts. Methods using ethnography and other qualitative and quantitative marketing research are very helpful in learning and better understanding the needs of the customer.

A quick side-note: Zoomr’s value proposition is that (they claim) they are better than flickr. This is NOT a sustainable business, if their value proposition includes the words “use us because we’re better than x”. They demonstrate that they are not thinking of the customer.

Continuing, assuming we have a list of requirements, needs, or feature request, how should those be prioritized? This is where Pareto comes to the rescue. Remember that the Pareto Principle, which is also known as the 80/20 rule, is a general rule that attempts to seperate the trivial many (80%) from the vital few (20%). To arrive at an exact 80/20 is not the goal, nor is the real world cut so cleanly like that, but it’s a very general rule that aims to help us focus our efforts and attention.

Using the Pareto Principle for product development, including software, means that we need to find the vital few that will satisfy the largest group of customers. Pictorially, you can imagine two Pareto Charts, where one shows the seperation of vital few vs the trivial many and the vital few’s realtionship to the market it impacts:

 

The chart above was from a real Amazon project that I led. On the left you see the seperation of the trivial many vs the vital few and the vital few is circled and reflects its relationship to the market it impacts (chart to the right). In summary, the chart above shows that while only x% was observed, it impacts a large % of the market.

To translate this to software or product development, we can quickly imagine that while a few features are determined to be important or highly prioritized, they do in fact satisfy a many needs of the customer. This is what we want.

To help us prioritize, below is a simple matrix that I use:

 

This simple matrix helps the product development team to focus their energies on the right things. The above matrix is very generic, so please apply it to your specific effort. For software projects, this matrix is very applicable. For medical devices or other regulatory concerned prodcuts, you’ll have to modify the above matrix for your specific needs.

Another item that I think will truly help is to follow the tenets of the Agile Manifesto:

* individuals and interactions over processes and tools,

* working software over comprehensive documentation,

* customer collaboration over contract negotiation, and

* responding to change over following a plan.

This will help curb any misguided and lofty effort of the Product Manager. Again, focus on the customer is the key.

Conclusion

Focus on the customer. Find the vital few needs that will satisfy a large portion of your customer base or customer constituency. By focusing on the customer, you’ll ensure that you’re doing the right things for your product, software, and business.

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Comments

  1. Dave Cortright says

    This idea is also backed up by the data collected during the research of the book “Good to Great”:

    If you had the opportunity to sit down and read all 2000+ pages of the transcripts from the Good to Great interviews, you’d be struck by the utter absence of talk about “competitive strategy.” Yes, they did talk about strategy, and they did talk about performance; they did talk about becoming the best, and they even talked about winning. But they never talked in reactionary terms and never defined their strategies principally in response to what others were doing. They talked in terms of what they were trying to create, and how they were trying to improve relative to an absolute standard of excellence.

    http://blog.360.yahoo.com/blog-0ZFmUbk1erC6prHGUJbW_UclZ3O1Sw–?p=124

  2. Senthil says

    To your question as to why companies may want to focus on the competion instead of the customer, I’d like to suggest one additional, important explanation: Many companies find it more difficult to get customer opinions and requirements (particularly if it is a startup) than to get competitor data which is available for free on the net and from other market research firms.

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