Customer-Driven Product Development
Written by: Ryan Flannagan
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Chapter 24: Customer-Driven Product Development

“Listen to customers,” Chuck said. “That’s not exactly a unique insight, Ryan.”

Carole made a face. “Based on how often companies really do it, it might as well be.”

Good point,” Chuck said.

“So always listen to customers,” Carole said.

“Yes. And I mean ALWAYS.”

W.E. said, “This is the place where you show us some weird but really profitable way to listen to customers that almost nobody else tries, right?”

“Well, now that you mention it…”

Once upon a time, companies needed to spend small fortunes figuring out what new products would best serve their business development. This involved deep market research, consulting with economists, hiring focus groups, and all manner of expensive, time-consuming acts that only worked about half the time.

In the 21st century, your relationship with your existing customers replaces half or more of that work and expense. You have access to them like never before. Even better, they are the perfect testing ground for new ideas.

Why Your Client Base Is Your Best Idea Mine

You might think I was kidding, but seriously, you should listen to your existing customers as your first stage of R&D. Here’s why:

  • They know where your current products need improvement, and what they wish they could buy from you (if you only offered it).
  • They have a relationship with your brand, meaning they are less vulnerable to being seduced away by competitors who are developing a similar products.
  • If you make a product based on the feedback of an existing customer:
    • They are very likely to beta test that product and provide detailed, useful information; and
    • This increases that customer’s loyalty and enthusiastic engagement. They become much more likely to transition into brand advocacy.

When you put all this together, it is like selling to an existing customer. We all know your investment is 7x more profitable when reselling than with an initial sale. Nobody’s run the numbers yet, but when they do, they will find that those numbers are even better when you use existing clients instead of random consumers to help you develop new products.

The Right Way To Ask

Of course, all those good things I just said only work if you ask the right people in the right way at the right time. Over the years, client interviews and my own mistakes have given me a list of the most important common features of getting all of those things right.

Active Engagement Is Key

Don’t wait for your clients to come to you with ideas. Actively engage in sussing out how your clients would like to see your brand grow. This seems like it would go without saying, but some people need a reminder. The purpose of this part of the customer journey is to actively listen to your customers to find out what they want next. This requires intelligent, focused attention. It is not an afterthought or rote task. Be a detective.

Read Between the Lines

If you conduct in-person interviews, pay attention to voice tone, facial expressions, and body language. If you’re doing email feedback, read responses for what customers might be communicating outside the actual words. In some cases, a client might have a strong opinion but be concerned about hurting your feelings. In others, they might not know exactly how to communicate their core needs. Either way, active listening techniques can help you identify the most important needs of the clients who give you feedback.

Check Your Assumptions

Every business model begins with a set of assumptions. Some examples of those assumptions might be:

  • Our customers want this suite of options in every product.
  • Our customers won’t need or want this other suite of options.
  • Demographic X will be the primary consumers of our product.
  • We should focus on price point Y for what we offer.

I am consistently amazed by how many of my customers have never used their client feedback or sales metrics to fact-check their initial assumptions. Discovering and revising an incorrect core assumption can make an immense difference in your company’s success and profitability.

Focus on the Story

If you can get respondents to tell you the story of their relationship with your brand, you can gather a wealth of details they wouldn’t think to tell you in a shorter format. They will also answer important questions you never thought to ask. Most experts feel this is best done in in-person interviews, but even texts can tell a much richer and useful story than other forms of information gathering.

Look Hard at Your Buying Process

There are situations in which the person making the buying decision might be different from both the person who uses your products and the person who would respond to your feedback request. Untangle this potential Gordian knot as best you can before seeking direction. An accurate answer from the wrong person points you in the wrong direction just as much as an inaccurate answer from the right person.

The Wrong Way

My experiences with this have also given me a long laundry list of how to do this wrong. A lot of it I’ve earned the hard way by making the mistakes myself. Some I’ve seen made by others, and paid enough attention to learn from their misfortune. Some I’ve just read about in blogs, or heard in podcasts, and they rang true from experiences I’ve had.

For worse or much worse, here are the most common mistake I’ve seen in this part of profit engineering.

Limiting Responses

Limited responses (like multiple choice surveys) are based on assumptions you make before listening to your clients. Instead, provide open-ended questions about a particular aspect of the experience. For example…

  • Describe your experience the last time you interfaced with our technical support staff.
  • What is the most frustrating aspect of our product?
  • Have you ever considered changing vendors? Why or why not?
  • If we made robust changes to our product, what features would you most want us to keep?

Talking Only to Existing Customers

They are the easiest to talk with, and the most likely to be on board for beta testing or buying your new offerings. But they’re also the happiest people who have interacted with your company. Find ways to get feedback from the people who fell off your on-boarding system. The people who almost bought what you offer can give you some of the most useful feedback possible about how you can improve your business.

Assuming You Understand the Customer Experience

Closely examine all of your business development and sales systems for trends indicated by the data, and then compare your findings with the actual comments of your customers. If possible, go buy what you offer from a competitor and see what it’s like from the consumer side of things. Never act on what you think you know, because you understand your company from an ownership perspective.

Believing All Customers Are Created Equal

The 80/20 rule applies here. Some of your customers will provide the best feedback about how to improve what you offer. Some will be the most likely to buy your new offerings once you create them. Sometimes (rarely) these are the same people. Other customers will be perfect for helping you with new products, but poor for improving existing lines. Think about how to categorize your client base so you can focus appropriately during product development efforts.

Among my beta readers, this chapter was the most surprising. Product development as (a) a kind of customer service, and (b) driven by client requests is an alien concept to many. Not because it’s a bad idea, but simply because it’s not often done.

But in this age of responsive, engaged, and opinionated consumers with a soapbox and megaphone in each pocket…it is one of the most effective ways to build a rabidly loyal following for your brand.

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