How Ignoring Customers’ Needs Almost Crashed Coca-Cola, Google, and Harley Davidson

  • Darshan Mehta
  • October 4, 2017

Do you “get” your customers? It isn’t just teenagers who feel misunderstood.

A recent study by global digital agency Wunderman discovered that 79 percent of U.S. consumers are partial to brands that show they understand and care about their customers, and 56 percent of them are more loyal to brands that display a deep understanding of customers’ priorities and preferences.

 

Unfortunately, while 80 percent of brands surveyed by IBM claimed to have a well-rounded view of their audience, Econsultancy reported that less than 40 percent of consumers felt that their favorite brand understood them. Just 22 percent believe that about the average retailer.

 

Customers are clamoring to be heard. Brands might feel like they’re listening, but most consumers beg to disagree. To drive loyalty and product innovation, brands can’t just react to customers’ feedback. Brands have to be proactive, gathering audience insights before, during, and after developing any new product or service.

 

Your Customers Know Better

 

Without listening to what your various target audiences want, business decisions can become dangerously dependent upon guessing.

 

3M proved this in the ‘90s when it essentially outsourced innovation to the top users in its medical-surgical market rather than trying to come up with breakthroughs itself. Audience-led ideas resulted in average revenue of $146 million dollars over five years, compared to only $18 million generated by internal innovations in the same amount of time. 3M’s customers came up with more winning ideas because they knew what they wanted — far better than the company did.

 

Here are four common mistakes businesses make when they push new products or services without listening to the wisdom coming from their audience:

 

1. Failing to “get” customers’ needs


Test your vision, but don’t be blinded by it to the point of ignoring honest input from actual customers. Even those of us with the thickest skin can still be averse to receiving criticism. Nonetheless, you must listen to the honest feedback your audience provides, no matter how critical it may be. Enter into the conversation with an open mind and don’t assume you know what people want, or your new product could flop as badly as “New Coke” did back in 1985.

 

Only 13 percent of people who drank soda liked Coke’s new recipe. Although the product had performed well in blind taste tests, Coca-Cola underestimated the role that emotional attachment plays in product preferences. In its quest to deliver something new and exciting, Coca-Cola forgot about the deep emotional connection people felt to its product. Never underestimate the power of familiarity.

 

2. Trying to fix something that isn’t broken


When things are going well, brands can overreach and try to fix things that should be left alone. Fixing a problem is not the same as having a sizable market that’s willing to pay for your solution. Product-market fit is critical to its success — and without people willing to pay for your solution, you have none.

 

Next Step Living was once a thriving business, employing more than 800 people and generating $100 million in yearly revenue performing energy audits. But when the company moved into a new realm of energy services by offering solar panel and insulation installation in an effort to further boost revenue, it only succeeded in blowing through cash in a space without sufficient margins to ensure a return on those investments.

 

3. Chasing the wrong customers


If you think you have undying loyalty from your audience, think again. Don’t try to take advantage of your brand’s fandom with half-baked product offerings. Guessing or stabbing in the dark can be crippling, if not fatal.

 

It truly is cheaper to pay attention. When Harley Davidson started offering perfume, aftershave, and wine coolers in the 1990s, even its most loyal of fans didn’t bite. These products didn’t match the brand’s tough image. The intense criticism from its die-hard customers taught the motorcycle manufacturer an important lesson: Extra offerings don’t equal extra revenue if they’re off-brand.

 

4. Inaccurate or inadequate price-testing


Pricing is one of the most important factors involved in finding success. Not only does it impact your profit margin, sales volume, positioning, and market share, but it also represents the value of your product as perceived by your customers. Are they willing to pay what you’re asking for your product or service? Getting it right can raise the trajectory of your whole business.

 

Even if a product is the peak of innovation, you can’t always just slap a high price tag on it. Consider Google, which can seemingly do no wrong — but back in 2012, that wasn’t the case.

 

Before its launch, Google Glass appeared to be on the right track, generating tons of buzz from the right influencers. In the end, though, the gadget’s hefty $1,500 price tag was too much of a stretch even for fans of Google. In addition to privacy concerns, that exorbitant sales price rendered the headset stale by 2015, with only a handful of professionals still using it.

 

Developing ideas in a vacuum is a surefire path to failure. If you want to find sustainable success, open your ears and listen to what people want. Asking for their opinions is key, but you can’t stop there. You have to act upon that feedback, even if that means pivoting before a long-awaited launch.

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