Consider more than just customer needs

If you want to be a bad product manager, listen only to your customer needs when defining your product. You want to be customer-focused, right — so why would you take anything else into consideration? The customer is always right, after all. Everyone always says that you should focus on the customer and everything else will follow.

If you want to be a good product manager, make customer needs the central but not the sole voice in product definition. While you need to create a product that meets customer needs, you also do not want to jeopardize the success of the product by ignoring all of the other important stakeholders.

Some potential downfalls of listening only to your customers include:

1. Customers might use your product but not want to pay for it.
2. Your product could cannibalize sales of other products your company produces.
3. Focusing only on current customer needs ignores the larger potential in new customers and new markets.
4. Distributors and retailers may refuse to carry it because of the impact it could have on other products they sell.

An example of the fourth problem: When digital video recorders first were available, there were two main competitors — TiVo and ReplayTV. ReplayTV did a great job understanding the needs of customers and realized that people buying DVRs did not want to watch commercials. They came up with ingenious ways for users to be able to skip commercials. Their earlier models had a button that, when pressed, would automatically skip the show forward 30 seconds. Later models came with software that could automatically detect when a TV show ended and the commercials began and skip through the commercials without any user intervention.

TiVo, meanwhile, stuck with features that allowed customers to fast forward through commercials, but not skip them entirely. Did the TiVo team not understand the desires of customers? Of course not — but they did understand the desires of other stakeholders in this market, like television stations, cable and satellite TV providers, TV networks, and advertisers. While users would be happy skipping commercials entirely, these other important players would not, but their support would be necessary for TiVo to succeed. Meanwhile, ReplayTV drew the ire of many of these constituencies, causing them significant problems despite their customer-focused features.

This one situation alone does not explain the situation that each business finds itself in today. However, TiVo’s ability to work with the other stakeholders and ReplayTV’s reluctance to do so has certainly contributed significantly. ReplayTV still exists, but they have gone through several bankruptcies and have had to change their business model and product offerings many times to attempt to remain competitive. While TiVo is not necessarily thriving, they have prevailed in comparison and are certainly the leader in the DVR market.

Successful product management comes from understanding the market, which includes current customers as well as potential customers, competitors, suppliers, intermediaries, and others who have an interest or stake in the market. Make sure to keep customer needs central to your product strategy while also taking into account all of the other appropriate aspects that contribute to your product definition.