The Importance of Listening to Your Customers

The Importance
of Listening to
Your Customers
David Cancel
#MTPCON London

About David Cancel
• 5x Founder / 2x CEO
• CEO/Co-Founder, Drift
• Chief Product Officer, HubSpot
IPO: HUBS
• CEO/Co-Founder, Performable
acquired by HubSpot
• Owner/Founder, Ghostery
acquired by Evidon
• CTO/Co-Founder, Compete
acquired by WPP
• Investor/Advisor/Director to Various
Companies and VC Funds

Why do we need
to listen to our
customers?

EMV cards were rolled out in the US
to solve one problem (security), but
ultimately they created an entirely
new problem …

The US’s transition to chip cards has
been an utter disaster. They’re
confusing to use, painstakingly slow,
less secure than the alternatives,
and aren’t even the best solution for
consumers. (Quartz)
“

The businesses involved — banks,
credit card companies, retailers, etc.
— weren’t listening to their customers.

… nearly four times as many
consumers are more worried about
speedy processing times rather
than chip card security. (CNN)
“

If they had been listening, they
would’ve realized that a 10-second
processing time was a deal-breaker.

Their “solution” was decided upon
behind closed doors, without any
customer input.

But … what about
that Henry Ford
quote?

If I had asked people what they
wanted, they would have said
faster horses.
-Henry Ford
“

Consider this: In 1921, the Ford
Motor Company sold more than
60% of all the cars it manufactured.

By 1927, that figure had dropped to 15%.

Here’s what happened: Ford was
laser-focused on creating a single,
inexpensive, mass-produced car
(the Model T).

And while that car was initially a
huge success, Ford failed to listen
to the changing needs and tastes of
his customers.

That opened the door for competitors
who were listening to customers, like
GM.

In the 1920s, GM recognized that
people were looking for something
new, something that fit their lifestyle
They didn’t want a one-size-fits-all car.

So GM focused on manufacturing
cars “for every purse and purpose,”
and soon began stealing customers
away from Ford.

In response to his company’s
dwindling market share, Ford finally
retired the Model T in 1927.

It had been in production since 1908.

So the next time you see this quote …

It was clear what people wanted,
and it wasn’t faster horses. It was
better cars, with better financing
options.
-Patrick Vlaskovits (via HBR)
“

If Ford had been listening to his
customers, the company likely could
have avoided that massive loss of
market share in the 1920s.

LEGO had a similar
experience in the
2000s …

In 2003, LEGO lost $300 million. Their
prediction for the following year?

Unlike Ford, who failed to innovate
when customer expectations
shifted, LEGO had the opposite
problem …

In the ‘80s and ‘90s, LEGO replaced
many of its veteran designers with
recent graduates from top design
schools.

These new designers took LEGO in
a new direction — away from the
simple bricks that made the
company famous.

The number of unique LEGO parts
soon skyrocketed from around
6,000 to more than 12,000, and the
designs got way more complex.

The LEGO execs were confused:
These designs were cutting edge,
way more advanced than the older
ones. Why weren’t they selling?

Finally, LEGO asked its customers:
“What do you want?”

And LEGO’s customers answered …

LEGO’s new direction had shifted
the focus away from building and
creativity, which is what people had
loved about LEGO in the first place.

So when Jorgen Vig Knudstorp
stepped in as LEGO’s new CEO in
2004, he acted on this feedback
and made a radical decision:

Customers would have a say in all
new LEGO designs moving forward.
(And in 2006, LEGO held its first
design workshop to start making
this idea a reality.)

Knudstorp led a charge to put
creative control into the hands of
hardcore fans of the brand rather
than in those of top designers who
had skills but lacked a real
understanding of Lego's history.
(Business Insider)
“

In 2010, LEGO reported annual
sales of $2.3 billion.

In 2015, annual sales reached
$5.2 billion.

This is why we
need to listen to
our customers.

And today, there is no excuse not to
be listening.

Why build a product in an internet-
connected world and not lean into
the advantages of that ecosystem?

With the rise of messaging
software, customers can
now easily give you 1:1
feedback in real-time.

One issue that does arise, however,
is knowing what to do with customer
feedback once you get it.

With so many suggestions to sort
through, it can be hard to prioritize
feedback and make it actionable.

I like to think about customer feedback
as falling into three buckets:

• How do I …
• What happens when …
• I tried to …

• Can you/I …
• How do you compare to …
• How are you different than …
• Why should I use you for/to …

• I’m probably not your target
customer …
• I’m sure I’m wrong but I
thought …

Spotlight Framework Cheat Sheet
Product Marketing PositioningUser Experience
What happens when …
How do I …
I tried to …
Can you/I …
How do you compare to …
How are you different than …
Why should I use you for/to …
I’m probably not your
target customer …
I’m sure I’m wrong
but I thought …

The Spotlight Framework addresses
a key problem I’ve noticed:

People tend to focus on the wrong
part of customer feedback.

They focus on the subject of the
feedback instead of the root cause.

So when they hear customers asking,
“How do I do X?” they become
fixated on the “X” and assume their X
feature needs a major overhaul.

Using the framework, however, you
can quickly identity that the most
important part of that feedback isn’t
“X,” but the phrase “How do I …”

“How do I do X?”
Focus on this. Not this.

The best thing about this framework:
it’s simple to implement.

You can use a Google Sheet or an
Excel doc to write things down as
you're hearing them and put them
into the right categories.

Then, every week/month you can
identify the top user experience,
product marketing, and positioning
issues that you’ve categorized.

By separating customer feedback
into these buckets, you can ensure
you’re crafting solutions that address
the root causes of the issues at hand.

Without a framework, it can be easy
to get lost in weeks and weeks of
conversations and lose sight of
what’s important.

For example, people often make the
mistake of only focusing on feedback
that relates to features and major
improvements.

But that approach can lead to big,
sweeping product changes that end
up driving existing customers away.

While innovation is important, the
key to showing customers you’re
listening isn’t making big, sweeping
changes every so often …

It’s making little updates and fixes
all the time in response to what
customers are saying.

I’ve found that customers appreciate
this type of incremental approach.

It shows customers that you’re not
just listening, but also taking action
based on what you hear.

From updating a broken link that
someone noticed, to changing a
design element that people found
confusing, every little action counts.

And all of these little actions and
customer conversations add up to
produce the overall experience
people have with your company.

By using an incremental approach,
you’re not just making your product
better, you’re also strengthening
your brand.

In today’s world, helping is the new
selling and customer experience is
the new marketing.

Companies that fail to adapt—and
that fail to listen to & communicate
with their customers—will inevitably
lose out.

So don’t be like Ford in the 1920s,
or LEGO in the 1990s …

Need help
becoming a
better listener?

Check out what I’m up to at Drift.com

The Importance of Listening to Your Customers

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