It is clearly important to have the customer at the center of your product development and thinking. As we know testing and then tailoring the product can be crucial to the development of successful new products. However, this can be problematic as well. First, if we craft a product to meet the needs of the customer today, what does that say about tomorrow (let alone when we actually get the product to market in 12-18 months)? Customer needs and demands change. If we put too much focus on exactly meeting their needs today, we have the potential to make only products that have a very short life.
The second issue is probably even more important. One technique often used to determine the customers’ needs, demands, preferences, etc. is the tried and true focus group. In a focus group the company gathers together a group of current customers or potential customers matching a certain profile. While there are many techniques used to conduct a focus group, the primary point is that the group gives vital information to the company about their preferences, buying patterns, feedback, etc. The marketing departments or product development departments then use this information. One common way a focus group is used is to have the members discuss their needs. This seems like a very appropriate use of the focus group, but it still is not working very well given that 80% or so of new products fail.
Harvard marketing Professor Jerry Zaltman, who has been studying customer behavior for years, has said that companies and marketers who use focus groups have made a fatal assumption error. They assume that customer knows what they doing or more precisely know why they behave (purchase). However, they could not be farther from the truth. Zaltman said, “Ninety-five percent of thought, emotion, and learning occur in the unconscious mind – that is, without our awareness,” and that includes the 95% of the thoughts, emotions, and learning that drive customers buying decisions. Furthermore, if the focus group participants can describe their needs with relative ease and speed, this is a danger sign. It is usually an indication that there is most likely already a product on the market that can meet that need. If that is true and you are just finding out about the need now, it is (probably) too late, because, there is already a market leader. We could debate on whether or not it would still be worth it to enter that market and compete for market share. Though, while successful organizations are adept at competing and fighting, they would rather enter markets where it has the possibility to gain share and profits more quickly and more easily.