Building a Downstream Focus
When asked about the level of market research that went into the development of the iPad, Steve Jobs famously answered, “None. It’s not the consumers’ job to know what they want.” Think about it. If asked two decades ago, “What new development would be most beneficial for your personal life or for your business?”, would you have identified the Internet, email, the iPhone, or even automated production technologies? The answer is no. None of us even dreamed we wanted or needed those innovations. However, today, we would be hard pressed to keep in touch with family and friends or be successful in business without them.
Steve Jobs did not ask us if we needed the high tech products he invented. He developed the products, showed us why we needed them, and then convinced us of the perceived value in using them. The point is that the most sacred of business tenets, “listen to your customers’ needs,” is not as sacred as we once believed. Today’s reality is that some of the most successful businesses are finding success not by being responsive to customers’ stated preferences but by defining what customers are looking for, creating a vehicle that meets that criteria, and then shaping the customers’ reasons for buying. There are myriad examples of businesses that have successfully shaped the buying experience. Let’s take a look at Starbucks. Who would have dreamed that in 1980 consumers wanted, needed, or would even pay for a $4.00+ cup of coffee when a cup of coffee in a local restaurant or coffee house cost less than a dollar? Or that in 2013 we would stand in long lines craving to part with that amount and more for a “Venti Iced Skinny Hazelnut Macchiato, Sugar-Free Syrup, Extra Shot, Light Ice, No Whip”? Perhaps it’s the allure of the individualized order, or the convenience of location, or the comfort of the sameness of the ambiance and experience regardless of location that has built such an unbreakable bond of customer loyalty.
The lesson is that what customers say they want versus what they really want, will value, and will pay for is most often very different. For many in this industry business is driven by production and success is measured in the numbers of units shipped. Organizations are committed and focused on honing and maximizing production throughput and efficiency. These are upstream activities that are important to any business. However, none of these activities are differentiators in the competitive space because everyone else is focused on accomplishing the same. Upstream refinements do not address the downstream needs or desires of customers. The real objective and challenge for building a true competitive advantage in the market is by shifting the focus downstream to the customer. Creating and nurturing the customer perception and relationship builds a bond that is impervious to the allure of competitors offering an equivalent product or value. Now sit back with your new iPad Air and enjoy your downstream purchase experience with that Starbucks Grande Mocha Latte.