Listen Better to the Right Customers

Customers service has come a long way. Back in the 80's, the saying "The Customer is Always Right" was coined. Today we have customer service software which can measure which customers are better to let go. Sprint received a storm of criticism recently for firing a couple thousand "problem customers."

When classifying customers, the conventional wisdom would use the following rating system.

Good customers are:

- patient,

- willing to pay for quality,

- flexible, and

- loyal.

Bad customer are:

- fickle,

- unreasonably demanding, and

- expect free services.

When launching a new product or service, your most valuable customers possess qualities of both of these "good" and "bad" customers. You want to listen to the customers who are demanding, though reasonable; and loyal, but only to a point. These customers are willing to pay extra for superior service, but expects a significant value in return for the extra cost. These customers are a product manager's best friend. If you listen to your "good" customers, you make assumptions that you can charge a premium and offer a good but not great product and thrive. Once the product hits the market, the flaws in features, quality and pricing levels will quickly be exposed. On the flip side, if you try and please a "bad" customer, a product manager ends up delaying product releases while trying to incorporate an enormous set of product features, many which are only useful to this ultra-demanding customer. Even then, this customer will want everything free and will leave your product for a cheaper alternative without hesitation.

The fair but demanding customer is the ideal market research target. Especially if she is comfortable in being brutally honest. She will explain the must have features and service levels. Additionally, she will provide an excellent idea of which add-on features or services she is willing to pay for. If you are lucky, you can get a good sense of the $ amount she will be willing to spend for the product and the various add-ons and extra service levels. Many times this $ amount will be zero. It is the responsibility of the product manager to figure out which features and services to enhance, remove/eliminate, and add based on the market research collected from this valuable customer feedback. A common mistake that product managers make is to waste time and resources building "cool" features that are not considered valuable to the customer base. The other big mistake is to leave out must-have requirements due to a lack of market research. Listening to the wrong customers as explained above can also lead to a product that is too weak, or one that does not have broad appeal.

The Sony Playstation 3 is an example of a product that has disappointed due to a wide gap between what the customer cares about, and what Sony believed the consumer would require and be willing to pay a premium for. The $600 price tag was too high for the price of admission for these Blu-Ray Disc playing, graphics-mastering machines.

The jury is still out on the iPhone. Apple and Jobs have been on a hot streak in mastering the customer requirements and commanding premium pricing in turn. There may not be a better judge of the consumer value-proposition and feature sets than Steve Jobs. So unless you are Steve Jobs, make sure to seek out the honest, tough, but not impossible customer and listen, listen, listen and then create your specifications.