Stop listening to your customers!!

Customers are always right but they won’t always tell you the 'complete' truth...since they don’t know it themselves!!

Consider this live example set earlier this decade, Mr. Gupta used to own a reasonably-sized audio cassettes retail shop at one of Mumbai's western suburbs. Business was good with his shop boasting possession of every new Bollywood release in town. Customers were loyal and the sales folk were efficient. Until one day, Mr. Gupta quarterly sales report started showing a worrying revenue trend. Mr. Gupta checked all processes and control-points; everything looked good, still the numbers refused to look-up.

So, he adopted the age-old method, incidentally also taught at all B-schools (it’s another matter that he never went to one!), he started speaking to his customers...asked them what would they like at the store? There were plenty of responses which, he narrowed to a few categories:

• Add old Bollywood titles to the collection
• Make the collection more varied like including Indian classical titles
• Pro-active sales folk who can suggest good music
• More Promotional offers....bigger discounts

And many more...

Mr. Gupta liked the suggestions and started to work on them immediately. One month post-implementation of the turnaround plan, things were still stagnant...he was able to arrest the revenue slide but normalcy or growth was still not restored!!

So, what do you think went wrong!! Mr. Gupta did 'Exactly' as his customers said....and 'That' was the problem.

How??...let us analyze.

Typically, whenever you ask your customers for feedback, irrespective of the industry / product / services, the responses can be bucketed into pretty standard words....

"We want it better, bigger, cheaper or for longer term"

In my interactions with varied customers, I have seen customers asking for variants of the above few words with few operational improvements / enhancements thrown in.

But if we go solely by what our customers say then, our fate would soon be like Mr. Gupta's venture. Why??

"Because a customer will never tell you about introducing a "Fundamental" change in the way you do business or your product / service offerings"

In other words, a customer will never tell you about the 'shifts' which can challenge your very business model.

In Mr. Gupta's case, the culprit was the slow migration of customers to alternative products like Music CDs / online mp3 et al. Mr. Gupta was slow to realize this market shift....which gets us to the next question....So, how do you look out for the market shifts??

One of the definite ways to recognize potential market shifts is to keep a look-out for your competition products / services. By competition, it’s not just the big guys or folks at your level but even the 'Fringe' players....coz, it’s very often these niche / fringe / periphery players which bring in this market shifts.

You will find ample opportunities of this theory in practice:

• Closure / downsizing of many traditional publishing houses owing to the new media
• Movement from traditional broker houses to the world of online trading
• Technologies such as Cloud computing which has changed the rules of the game especially in the SME sector

Many of these visible examples are from the technology sector but the same holds true for traditional sectors as well.

There will always be players in your sector which, will be working on the next 'wave' of things in your industry...they are the ones to watch out for; observe, learn and try to replicate if needed....or still better, collaborate.

In effect, in the longer term...its pays more to monitor your competition more than ask your customers for feedback...customers may suggest novel operational improvements but rarely will they guide you to the fundamental shifts.

Treat your customer as the 'King' but avoid taking all his words as the royal law :)