Product Decisions: Are Customer Requests Overrated?
As product managers, we are trained to focus on the customer. We know that customer satisfaction is of paramount importance and that we must do everything in our power to make customers happy.
But I believe that this – contrary to conventional product wisdom – may be hurting your business.
Don’t get me wrong, I have nothing against customers. We must continue to listen to them, understand their needs, and do what’s necessary to meet those needs. But, we – as product managers – have a higher responsibility, and that is to protect our business interests. It’s an objective that is often lost in small and large organizations.
Key Limitation of Common Techniques
There are many techniques for product prioritization and decision making, such as the Kano Model, cost-benefit analysis, RICE scores, weighted scoring models, and my favorite – what I call the “let’s ask the customer when in doubt” approach. While they are helpful in driving objectivity to the inherently subjective decision-making process, it’s important to understand the critical areas where these methods fall short. They fail to account for business dynamics, customer relationships, and the real-world economics that influence business outcomes. These factors often far outweigh product considerations alone.
Early in my product management career, I was fortunate to be in a prioritization discussion with seasoned leaders. As we were going through the backlog, one of my colleagues was making an impassioned pitch for a product feature that a large customer had requested. He was fully prepared with other customer asks, competitive situation, and a joint execution plan with development teams. Everything was well organized and the decision seemed obvious.
Our product leader, the VP of product management at the time, didn’t seem convinced. He asked a question that turned the conversation on its head. It’s a question we all must ask, not only in prioritization meetings, but every day as we carry out our jobs. What happens if we don’t deliver the feature? This is an important question. Let’s ask that again – what happens if we don’t deliver a feature? Are we going to lose the business? Will the customers defect? If yes, what would be the impact on the business?
Everyone in the room struggled to respond to this question with clarity. Eventually the answer boiled down to this – the customer would not defect and the impact of not implementing the feature would be nearly nothing. In my experience, often the answer ranges across the spectrum from “customer may defect, but no significant business impact” to “no impact”. Rarely do we come across situations with dramatic business impact.
Consider the Forces Driving Your Business
Let’s go back to the primary question of whether customer asks are overrated in product decisions. Businesses are almost always driven by a complex web of interactions across the ecosystem. We can borrow ideas from Porter’s Five Forces Framework to drive clarity around this. At a micro level, business between your organization and your customer is driven by many factors beyond the product itself. A web of complex dynamics involving customer relationship, brand equity, channel relationships, customer switching costs, investments already made (sunk costs), specialized skills, and data stickiness play dramatically important roles. These driving forces are often ignored in our quest to meet customers on their own terms.
I have summarized the different aspects that influence the business outcome in the picture above. These factors are not meant to be exhaustive and they are often dependent on the industry and context. As you can see, and product differentiation (& thus product features) is just one of the factors. Product managers are business leaders who should consider the broader ecosystem for optimal product decisions. A holistic view that considers these aspects may turn your current product decisions around.
Key Learnings to Drive Product Decisions
Hopefully I have established that product decisions must take account of various business factors beyond the product itself. An idea that is implicit in this process is that the key responsibility of product managers is driving business outcomes, and that customer satisfaction is a means towards that end. Considering the impact on your business of not meeting customer asks is as important as considering the impact of meeting customer asks in driving product decisions. I hope you ask this question often and that it helps you drive optimal product decisions.