Remember New Coke? New Coke was a massive failure for Coca-Cola, one
of the world's most capable marketers. The failure resulted in part
from a product-oriented focus. Millions of dollars spent on consumer
research told Coke that the new formula tasted better. As Coke soon
realized, the critical factor was not the taste, but whether Coke drinkers
wanted/needed a new formula.
There is nothing revolutionary in stating that marketable products
and services should be based on specific customer needs. Most
businesspeople believe they've already asked and answered this question about
their products and services. Coke had answers too, but only after asking
the wrong questions.
To test where your focus is, ask yourself this: Why would people buy
my product or service? The best answer identifies a customer group and
its needs. Any answer that sounds like a product description - it
tastes better, it works faster, it fits in your pocket, it uses
revolutionary technology, it saves time - indicates a product-oriented focus. Those
product features may be valid, but they won't sell unless they are
relevant and necessary in the marketplace.
The following two examples should help clarify the difference
between product focus and customer focus.
Product Focus: Imagine a company that manufacturers light
bulbs. In the effort to stimulate the mature light bulb industry, the
company appoints a new product development team. After much research, the
team proposes a new light bulb product concept. The bulb is less
resistant to shattering than other products on the market. Its energy use and
life characteristics are similar to other premium products available.
The manufacturing technique is extremely advanced and even wins awards
from a leading industry group. The light bulb retails for $10.
Will anyone buy it? Doubtful. Consumers don't care much about
technological advances or trade awards, nor is there an epidemic of shattered
light bulbs. The high price point isn't justified by the weak
differentiating factors. The concept was based on the company's need to show off
its technical capabilities, nothing more.
Customer/Needs Focus: The owner of a medical billing service
has been operating within a small geographic area for several years.
She is well regarded in the community and has the majority of private
practices in the area as clients. She is reluctant to grow her business
beyond its existing size, because new clients will be further away and
therefore less profitable. After routinely hearing her customers complain
about the poor service of their message-taking vendors, she does some
research. She finds that the local answering services are poorly
equipped and staffed, which directly impacts the quality of the service they
provide. She decides to offer an alternative to the marketplace: a
premium answering service that uses top-of-the-line equipment and highly
trained, professional staff to provide best-in-class customer service. She
positions the business as a reliable partner in direct support of her
clients' daily activities. By comparison, her competitors were simply
thought of as message-takers.
In this example, the entrepreneur found a hole in the market - a
place where customers needed a type of service that currently wasn't
available. The answering service quickly took off and became a long-term,