Why customer needs don’t always matter

by Saeed Khan

There’s a great presentation by Brainmates entitled What is Product Management? In it, they say the following:

Product Managers spend time understanding what customers need and want…then develop solutions that solve these problems and satisfy needs and want.

There is nothing wrong with that description, and as a general statement, it is correct. That is where many Product Managers spend their time.  But the fact is, Product Management is not about satisfying customer needs and wants. And that’s a big distinction that needs to be understood.

I’ll say it again.

Product Management is not about satisfying customer needs and wants. Product Management is about ensuring business goals are met and business success delivered.

Now don’t get me wrong. I certainly believe in addressing market needs and driving customer satisfaction. That is definitely a great way to achieve business goals. But keep in mind that addressing customer needs etc. are a MEANS of achieving an END, not an END unto themselves.

This is something that gets lost in a lot of the discussion that happens about Product Management.

Strategy, Investment and Objectives

When it comes to building new products, it’s nice to think that every product is supposed to be a winner and market leader. But of course that cannot always be the case. Some products will never be market leaders, despite people’s best intentions, and some products are never even intended to be market leaders.

Consider all the tablet manufacturers who are releasing products to chase the iPad. And there are a lot of them!

What strategies do they have to gain market share? Do all (or any) of them think they can overtake Apple anytime soon? Given the lack of differentiation amongst them, are they really thinking about customers needs first, or are they looking at the overall market and their own business objectives?

Portfolio Management

Look at any company with a portfolio of products and you’ll see a few products that drive the vast majority of revenue and the remainder which are significantly smaller or are also-rans.

And if you could see into the decision making process of those companies, you’d see that the issue isn’t necessarily inability to address customer needs for those also-rans, it’s business objectives and investment. It’s portfolio management at work.

The questions come down to where to invest — i.e. which customers problems to address, which to ignore or postpone (and how to handle the fallout) — to best achieve the business goals of the company.

As Product Managers, as people responsible for “product success”, that’s ultimately where we have to focus.

It’s something I remind myself of regularly.


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19 thoughts on “Why customer needs don’t always matter”

  1. Saeed
    I like the tablet discussion. If you’re entering the market today, what are you thinking – how do I knock Apple out? Well, some are likely thinking this but most just acknowledge the market exists and are going after a piece of the action. The smart ones also have a checklist to work from: What segments are not served well by iPad and why not? What uses or applications are not optimized and why not? How would a tablet complement my other products? What happens to my product line and brand if I don’t launch a tablet?

    In all of these, there’s a circular analysis that has to happen: 1) who is the customer and what needs are underserved, 2) what solution creates value for these customers, and 3) can we provide this aligned to company assets and objectives?

    Unfortunately, it seems that many don’t really go through this analysis, but rather they just tweak a few product specs ( such as a smaller screen size or add Windows 7), or differentiate just to be different because they can (such as adding dual displays). What we don’t know is what business objectives they are targeting and what is their measure of success.

    At the end of the day, you need all three components of the analysis, but your success in product management will be measured by how well you achieved the last one – business results. So I agree with your discussion, but maybe a slight spin on the topic would be stronger: Why Customer Needs Don’t ONLY Matter.

    Thanks for the thought-provoking post.

    1. Don,

      Thanks for the comment. I’m sure some of the smaller tablet players (Archos for example) will make money in the tablet space, without much differentiation. i.e. put out a 7 or 8 inch Android tablet, find a couple of good resale or distribution channels, compete on price or bundle in some freebees, and you may have a $25 or $50 million dollar business. Nothing wrong with that.

      On the other hand, someone like RIM, who absolutely CANNOT deliver a “me-too” product, really needs to have a clear product strategy in place with clear positioning and messaging. Sadly, looking at what they have done so far, neither of those are true, and they are getting punished for it in the media and on the stock market.

      I have no opinion of companies like Archos, but I do feel strongly for RIM and want to see them do well. So far though, it’s not looking good, BUT, RIM has been through tough times before and came out well, so I’m not counting them out.

  2. But also remember, employees don’t work 60, 70, 80 hours a week for business objectives. They don’t put in overtime so the boss can get a bonus or the president can buy a new boat. People work crazy hours to change the world. Sure, we want to make the right product that benefits both vendor and customer but MAKING A DIFFERENCE isn’t about dollars and cents.

    1. Steve

      Not all people want to change the world, and not all people work crazy hours. My point though was not about the hours people work or their motivations, but the raison d’etre for product management. i.e. business success based on the company strategy and objectives.


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