If you build it they will come. That was certainly the case at Amplify last week, the product conference put on by Amplitude — a Y Combinator graduate product analytics company that raised $30M in its Series C round in 2017.
In fact, they came in droves. More than 1,000 product managers, data scientists, growth specialists, analysts and marketers descended on SVN West, San Francisco’s legendary rock-and-roll venue turned event space to hear from the best in the product space: Andrew Chen (former growth lead at Uber), Tatyana Mamut (former GM and Product Executive at AWS, Salesforce and IDEO), Merci Victoria Grace (former Director of Product, Growth at Slack), and Gibson ‘Gibb’ Biddle (below), the engaging and entertaining former VP Product at Netflix, to name a few.
The focus of Gibb’s talk in particular was customer obsession, or how to delight customers in margin-enhancing, hard-to-copy ways. Naturally, he used Netflix as an example of how PMs need to use consumer science to inform product iterations. You can see his talk here.
But not everyone is aligned on what customer obsession really means. From Gibb’s perspective, it’s not simply listening to the customer and focussing on building a better product than your competitor, but rather a healthy preoccupation with customers’ unanticipated, future needs. “Put the customer in the center of everything you do,” Gibb advised, “so that you begin to see the product through their eyes.”
In his work, Gibb finds that, “consumer science — the scientific method of forming hypotheses, then testing them — is the best way to build a culture of customer obsession and to discover what delights customers in hard-to-copy, margin-enhancing ways.”
There is plenty of evidence to back the need for this approach. A 2017 paper from customer experience consultants Walker predicted that by 2020 customer experience will overtake price and product as the main differentiator. Several studies also reveal the positive effects of customer obsession. For example, a 5% increase in customer retention can increase profits by 25% to 95% (HBR).
Having built hundreds of B2C and B2B software products at TWG, we’ve learned that data is not enough to really understand the needs of your customers. To develop products that address real buyer pain points, you need to infuse the voice of the customer at every step of the agile product development process.
Take, for example, our work with the customer-obsessed automated investment service, Wealthsimple. In developing Wealthsimple for Work, we spent considerable time gaining insights on how HR teams wanted to maximize matching RRSP contributions as a powerful employee retention benefit, and how employees could more easily understand the value of a product they would rarely interact with. The result of this deep dive steered us away from certain features and towards others, guiding us to develop a substantially improved platform for HR teams to manage group retirement plans. Payroll integration and a clean, modern UI make setting up investment plans both simple and low-cost, aligning with Gibb’s perspective on building product that delights customers in margin-enhancing, hard-to-copy ways.
Watch: TWG Managing Partner Chris Eben in conversation with Wealthsimple General Manager Jason Goldlist at Toronto’s Elevate conference, Sept. 26, 2018
For companies to survive, cultivating a customer relationship mindset must become an integral part of strategic planning and operational reality. Customer obsession is not a one-off approach tucked away in the corner of a strategic office, executed in fits and starts. It has to serve as the foundation of your entire company and drive decisions ranging from your go-to-market strategy, product development, customer support and post-sale project delivery.
Customer-obsessed companies share a number of attributes:
1) They are customer-led
Customer-led companies use customers as their North Star, the guiding principle that underpins every business process and activity. They understand not only what the customer is doing, but why. They then use these insights to create experiences that foster stronger customer relationships and better products. Most important, a customer-led culture will do the right thing for its customers. Establishing a customer-led culture isn’t just a competitive advantage, it is table stakes for survival.
2) They are insight driven
“The three most important tools in your relationship strategy are data, data and more data,” according to Forrester. However, “only 29 percent of businesses say they are good at translating the result of data and analytics into measurable business outcomes.” Collecting data isn’t enough. Data must capture decision-relevant information — in other words, customer data needs customer context. You need to understand the customer motivations that resulted in the data generation. You must analyze it, share it, derive insights from it collaboratively across organizations, but ultimately, data must be understood in context to develop true customer insights that drive better business and product decisions.
3) They anticipate customer needs
Whether this comes in the form of product recommendations or personalized discounts, customer-obsessed companies know how to surface opportunities to delight their customers. Because they know the “why” behind customer behavior, they know how to focus on what matters to these customers.
Customers are more likely to try new things than ever before. However, hyper-adoption is a double-edged sword. Customers are just as likely to hyper-abandon experiences — and brands — at the drop of a hat. Understanding the “why,” making better decisions as a result of this customer data, and actually delivering benefits to your customers by anticipating their needs is the formula for building better products.
And in the words of Gibson Biddle, there’s one other really important thing to remember:
“Patience. Most companies suck at the beginning and becoming a great company takes about twenty years.”
Oct 10 • 5 min read