Over the past twenty-seven years I have helped more than 250 organizations with their marketing efforts, from Fortune 10 companies to pre-seed startups in almost every product and service category. Over those years, I have discovered one critical error that some organizations make. They start with the product or service, not with the customer and his or her needs.
Whether it is a variation on an existing product in the marketplace or an entirely new product or even a new product in a new category, one must always identify the target customer and usually also the most promising market segment within the broader customer group. Then, one must conduct customer research to better understand the customer's functional, emotional, experiential and self-expressive needs and desires as they relate to the intended new product or service. This includes understanding what product/service functions and features or brand positioning can create a unique enough value proposition that some customers will choose the intended product or service over current offerings in the category. Further, the marketer needs to discover how much value the new function, feature or brand positioning adds to the product or service in question. Is the enhancement compelling enough to cause product or brand switching? Is it compelling enough to charge a price that will result in an acceptable profit?
While most organizations do this required upfront research, some rely on enhancements identified by product designers or engineers. And this is often informed by personal preferences or intuition. Sometimes a person's intuition can be spot-on, but at other times, the market segment that would appreciate the new product or product enhancement is just not big enough. At other times, it is valued but not enough to result in product or brand switching or not enough to cover the additional cost associated with the new product or product enhancement.
Further, assuming the new product or product enhancement is sufficiently valued by the target customers, then one must determine the pricing, distribution, communication and other marketing strategies that will give the new product or product enhancement the best chance of success. This too requires market research.
In summary, marketing must always start with the customer. Companies that start with the product are quite likely to underperform those that start with the customer. Having said that, some of the more successful companies can ideate product functions and features that the customer could not imagine or articulate. Smart phone features are a good example of that. However, even Apple and Samsung conduct rigorous customer research, even if just to confirm customer acceptance and adoption of those new functions and features and certainly to test and optimize user interfaces.
A boss of mine at Hallmark (sales VP) used to say this to all of his direct reports: "You only have a job and are receiving a paycheck because of our customers. Without them, Hallmark would not exist. Never forget that."
