The flaw in listening to your best customers

'For a marketer, its the ones who line up for the brand that matter most. May their breed increase, as their support, is what the marketer prays. The ones who stay with the brand do so as a result of positive attitudes built within them. And then there's the enemy camp that consists of people who harbour a negative attitude towards the brand. Its best the marketer leaves them alone as changing attitudes is a difficult proposition.'

That's from my post of yesterday; Note a certain contradiction to what I proposed;

At the core of the research summarized in The Innovator’s Dilemma is the notion that companies intent on listening to their best customers frequently miss opportunities to create new growth businesses. There is tremendous value in listening to demanding customers. Feedback from demanding customers helps to map out a trajectory that allows companies to continue to charge premium prices, earn attractive margins, and beat market competitors. However, established firms’ proclivity for responding to the needs of their best customers makes it difficult to seethe future impact of disruptions on their core businesses.

Companies that focus only on their best customers end up producing products and services that are too good for more mainstream customers. This overshooting creates opportunities for disruptors armed with simple, inexpensive business models. Responding to the disruptor in the lower tiers of the market never looks as attractive as serving higher-end customers, so profit-maximizing companies flee upmarket. In industry after industry, this pattern has resulted in market leaders eventually getting “pinned” to the high end of their industry and missing the growth created by disruption. Furthermore, a singular focus on demanding customers leads companies to miss growth opportunities that originate in the lower rungs of their market or in seemingly fringe markets of “non-consumers.”


Ajay Kalwani said…
Very true Sir,
As seen in the case of Coke. They always listened to their mainstream customer and resisted any change. So they were left dependent on one product, the market for which was not growing. While Pepsi on the other hand concentrated on other categories and went on to become leader in many of them.

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