Should you listen to your customers who take the time to write to you asking for specific products or features? The common sense answer seems yes, but should you always listen?
The WSJ has a story of loyal fans of British version of Cadbury’s refusing to accept the version sold in the US markets. The latter is manufactured by Hershey’s under its licensing agreement with Cadbury’s with a recipe tailored to the US market. Should Cadbury’s or Hershey’s listen to these most loyal fans and change their recipe? The article in WSJ describes these fans as someone who,
wants nothing to do with the stuff made in the U.S. “Oh, it’s so yuck,” she says. “You might as well eat a Hershey bar.”
With such loyal fans does it not make sense to a marketer to listen to them? The answer is not straightforward and need to be analyzed from at least three angles
- What is the customer saying and what do they really want?
- Is the customer insight actionable and profitable?
- What is the share of profit from these customers?
The first point is the most repeated story that if Ford had listened to its customers it would have developed faster buggies. In the book Game Changer, P&G’a retired CEO, Mr. A.G.Lafley calls this “customer driven and not customer led”. It is important you listen to your most loyal customers but everything you hear are not the customer insights – not to mention the biases in what we choose to hear and how we interpret it.
The second point is about relevance of customer insights to your business. In the Cadbury’s story the insight you may find is that the customers are really holding on to their memories of living abroad and are trying to relive by reminding themselves of the chocolate they ate there. This would be a valid information but it is insight only if you can act on it, the action required fits your business strategy, and you can generate profits from it through product innovations.
The third point is about the share of profits you generate from these customers. What is this segment’s willingness to pay for such product variation? What are your costs to produce, distribute and get it to the target segment? It is not just how big this segment is or how much revenue you generate – the segment has to generate enough profit to justify new action.
Next time you see a flood of tweets, blog posts, and other social media expressions of customer likes and dislikes, ask the three questions before you rush to implement change.