Is Your Product Strategy Inside-out? A Common Pitfall For Tech Companies Is Losing Sight Of What Customers Actually Desire
When tech firms build products ahead of market and customer insight, lightning seldom strikes. Here are 3 ways companies can pivot and the role marketing plays
Written by Jeremy Korst, President, GBK Collective
Success in business starts with making a strategic choice of who your target customers are – that is, who do you serve? And the answer isn’t “everyone.”
Then, it’s critical to solicit feedback and listen to your target customers when defining your brand and product strategy from the outside-in. When companies build products and experiences without a discrete set of target customers in mind – trying to be everything to everyone – they are far less likely to navigate the market successfully or set up their brand for long term growth.
And yet despite this, thousands of businesses launch new products and services every year with very little external market or customer insight. Nowhere is this type of inside-out thinking more common than in the technology world. While many tech companies claim to be “customer-centric,” in reality, they largely ignore the basic building blocks such as customer and competitive insights when developing new products. Making matters worse, capable marketers are often underutilized or play a limited, supporting role.
To explore this trend in more depth, including the role marketing plays at tech companies (vs. CPG or retail firms), I recently co-authored an article in Harvard Business Review with Kim Whitler, professor of marketing at the University of Virginia’s Darden School of Business. The article describes the pivot Microsoft made to become more customer-centric following the failure of Windows 8, and how marketing played a strategic and critical role in this evolution.
In this post, I’ll share some of the key themes from the HBR article, common challenges that CMOs and marketers face navigating the culture in tech companies (including my own experience), along with key steps companies can take to pivot and redefine their brand strategy from the outside-in, based on target customer insights.
Product-led vs. customer-led
“Too often, developers build what they can, not what they should.”
Tech companies have always taken pride in having high-performing, engineering-led cultures that are largely focused on building “the best” products and services. Under constant pressure to innovate and expand their addressable market, there’s a constant and intense focus on developing the next feature, service or “killer app”. And yet, too often, developers build what they can, not what they should.
A classic example of this type of ‘inside-out’ approach was the launch of Windows 8 in 2012. The platform was developed in extreme secrecy, with limited engagement outside the Windows engineering team, let alone any customer input, feedback or perspective. Despite Microsoft having invested millions of dollars into R&D and creating hundreds of innovative features, the platform failed to gain traction. Less than two weeks after launch, Inc. openly questioned if Windows 8 was the “epic fail of the decade”.
Evidence of Microsoft’s engineering-led approach is captured in a detailed 11,000 word blog post explaining the context around each of Windows 8’s features. Clearly Microsoft wanted Windows 8 to be different. The problem was the new features they developed were often based on their own internal beliefs, rather customer insight.
Learning from its earlier missteps, Microsoft pivoted with the launch of Windows 10 to redefine its brand and product strategy from the outside-in. In a complete departure from the Windows 8 development approach, newly appointed engineering chief Terry Myerson invited marketing and other key business leaders to his team’s early strategy discussions. From start to finish, marketing played a central role in the design of Windows 10, with direct feedback and insights from target customers shaping exactly what features to prioritize or improve.
The result was Windows 10, which went on to become the fastest and most widely adopted version of Windows ever, and a great example of the company’s shift toward a more customer-centric approach under CEO Satya Nadella.
Not an uncommon story
“Tech companies have a tendency to put the product on a pedestal.”
Taking an inside-out approach to new product development is not an uncommon story in the tech world. Under pressure to innovate and expand their total market, tech companies are notorious for developing new products and features ahead of customer demand.
Another prime example of this approach is the launch of Google Glass. Google developed a great set of innovative technologies, but failed to ground the products they developed around customer insights, adoption barriers or real world needs. Following the initial uptake by early adopters, sales quickly stalled.
As Lindsay Pedersen, brand strategist and author of Forging an Ironclad Brand: A Leader’s Guide shares “tech companies have a tendency to put the product on a pedestal, with little consideration given to the target customer needs”.
Marketing also tends to be underutilized or play more of a support role in tech companies – focusing on branding, sales support, demand generation and marketing communications, rather than shaping product strategy. Essentially one of the 4 Ps of Marketing – Product – is missing!
This is a sharp contrast from the role of marketing plays at CPG and other consumer-oriented companies, where marketing is directly responsible for providing customer insights and data to inform future product strategy.
How customer-centric is your company?
“Ultimately your brand strategy should act as the north star.”
There are a number of factors that influence the role marketing plays in an organization and how customer-led the company is when it comes to new product development.
Key questions to ask:
Do you have a discrete set of target customers identified? Do these target customers guide your company’s priorities and resource investments?
Does your firm conduct upfront and ongoing customer research to guide product strategy, or is early adopter feedback usually only sought out after the product or service is developed?
Does marketing have an established and ongoing role in future product roadmap and innovation discussions? Or, is marketing looked at as only a “go to market” function?
Are “Minimum Viable Product” (MVP) criteria based on the minimum market success requirements in the eyes of your target customers, or defined by internal thresholds, opinions and resource constraints?
By asking these questions and others, CMOs and marketing leaders can quickly identify the gaps or cultural roadblocks that may impede marketing’s effectiveness when it comes to shaping the broader brand and product strategy.
Ultimately your brand strategy should act as the north star – not just for the marketing organization, but for the entire company. It defines every aspect of your company from the products you develop to the marketing and experiences you deliver.
With that overview in mind, here are several key areas CMO and marketing leaders should focus to pivot and redefine their brand strategy from the outside-in:
1. Put your target customers on a pedestal, not your products
While continual innovation is vital to any tech company, you need to have a clear vision of what your target customers need before building and scaling your products, layering on more functionality and cost. Too often, we see tech companies that do the opposite.
To successfully pivot, companies need to identify and hyper-focus on their most valuable customers (versus all potential customers), and put their needs at the center, or bullseye, of their brand strategy, product development and marketing efforts.
2. Invest in better data and insights to understand the customer journey
What does a day in the life of your target customer look like? What are their current and future needs? What are their pain points, and how can you help make their lives easier or better?
Clearly defining who your target customers are also forces the organization to make important choices and prioritizations across the business, from your overall brand strategy to product development, marketing, pricing and customer support.
3. Uplevel and redefine marketing’s role in future product strategy
Many tech CEOs or leaders fundamentally believe that marketing’s main role is to generate new customers, or that marketing should only support sales or align with other outbound sales efforts.
To successfully overcome these misconceptions, CMOs and marketing leaders need to make sure they’re defining and advocating for a holistic brand strategy across the organization. Making the leap also requires reinventing how marketing, product development and other cross-functional leaders partner to craft innovation roadmaps that are grounded in current and future customer needs.
Over time, by investing in external insights, better data and experimentation, you can begin to uplevel and reframe the conversation internally around the importance of developing a consistent brand strategy and the role marketing plays in shaping product strategy.
