How to Avoid Market Feedback Traps [Mind the Product]

If you were to ask me whether you, as a product manager, should you always listen to market feedback? My answer would be yes, definitely. Sometimes. Here’s why.

Henry Ford is famously quoted as eschewing market feedback by saying that if he’d listened to his customers, they’d have asked for faster horses.  Interestingly, I learned that Ford’s “faster horse quote” was never actually said.  In fact, between 1921 and 1927, Ford lost half of its market share to GM, who won customers over by listening to them.

Nonetheless, the quote is a favorite go-to argument in roadmap meetings everywhere, used to justify positions that are inconsistent with market feedback or lack data altogether.  At the same time, I’ve seen many teams deceived by even carefully collected feedback who end up building product that doesn’t align with where they want to grow in the market.

So, what’s the right way to go?

The key to avoiding a feedback fake-out is knowing which customers to listen to when, and being explicit about it.  Teams get off track when they don’t have a clear sense of which customers they are actually hearing from versus the ones they really need to hear from based on their competitive strategy.

B2B categories can be especially tricky because you are building product for a professional who’s doing a job you’ve likely never done first-hand.  It’s hard to exercise reliable Ford-like intuition about what the product should do, and if you don’t talk to customers you risk building something that totally misses the mark.  But in the B2B world, the way companies go to market introduces the potential for various feedback biases that every product manager and marketer needs to understand.

Common B2B Feedback Traps

Here are several common feedback traps I’ve seen, especially in B2B companies. The good news is that they are not too hard to fix once you notice them, but will likely require product managers to be more proactive and explicit about sourcing market feedback.

1. Convenience Bias

The feedback that is easiest and fastest to get will tend to be over-represented in decision making. And this tends to be where the company is already having success, which may not be where the most new growth lies. For many product managers who work with sales forces and customer success teams, the easiest feedback comes from being called into sales pitches or meetings with existing customers.  Since product managers are always busy with engineering meetings, launch meetings, and the like, it is understandable that this becomes the default method of collecting customer feedback: they can get plenty of customer exposure without having to go out of their way.  But the consequence is that you will likely end up with an under-representation of feedback relating to growth opportunities.

2. Expert Buyer Bias

A product manager or marketer is often called into meetings by their customer-facing colleagues for the more challenging cases where the customer is asking hard questions about the product.  These customers tend to be experts, and while their feedback and response to messaging can be valuable, they typically are a smaller segment of the market, not the mainstream buyer.

This type of bias can lead to overly complicated products or messaging that is overly nuanced.  It can also become cyclical, because as the product and messaging gets more complex, it becomes harder to train a salesforce, and requires continued involvement from the product experts on staff.  Watch for this pattern in emerging product categories where experts tend to be early adopters, as well as hyper-competitive markets where differentiation is subtle and appreciated only by “category connoisseurs” (as described by YoungMe Moon in her excellent book Different: Escaping the Competitive Herd).

3. Existing Customer Bias

In most SaaS businesses, the right balance between winning new customers and retaining existing customers is critical to sustaining growth.  But in choosing roadmap investments it is often the case that the priorities look very different for each of these groups.  For example, usability enhancements may be critical to retention and expansion of existing customers (“just get the reports to load faster please!”).  But to get new customers to choose you over the competition you need something that is truly marketable, like a shiny new point of differentiation.  Existing customers may not care about that as much as getting faster reports (for example)  and the new customers, not having used the product yet, may not yet know about that annoyance.

Bias in favor of existing customer needs can also result because they have known revenue attached to them, which can be lost.  Loss aversion is wired into our brains – it is the human tendency to prefer avoiding losses than acquiring the equivalent gain (that is, we generally prefer to not lose $100 than to find $100).  Compounding this effect, it is also more convenient to get feedback from existing customers because relationships are stronger and they are readily accessible.

4. Current Segments Bias

In order to keep growing, eventually every successful product will need to expand into new market segments.  Of course the hope is that the product will succeed in the new segment “as is”, but often there is something different that this new segment will need that isn’t obvious right away, even if it’s just different messaging about the benefits or capabilities of the offering.  Meanwhile, the bulk of a sales force is usually focused on new customer acquisition in segments where they’ve had success in the past.  Consequently, as a product manager or marketer, this is where most of your calls will come from to get feedback from the market.  And feedback from the new target segment will be scant.

Avoiding the Feedback Fake-out

• Be explicit about what types of people you need to hear from in order to grow where you want to.  Think in terms of role (including users vs decision makers), company size, company department, company segment (is it a current segment or a new segment for your business?), new vs existing customers, and company adoption profile (such as, early vs mainstream).  Multiple answers are perfectly acceptable here.
• Now that you know who you need to talk to, ask yourself if this is who you’re actually hearing from today for your current initiative.  If it’s not, then you’ll need to go further out of your way and get more creative about how to get to the people you need to talk to.
• Recognize that this is real work, not a side project. Product managers and marketers need to put real effort into getting beyond the easy waters of passive sales-led market interactions.  If you’re being too passive about where you’re getting your feedback, you’ll tend to skew your roadmap to where you are getting the most volume of feedback, which in turn is likely where you are already having success.

Gathering and interpreting market feedback is one of the most challenging aspects of product management, and it is work that is never perfect nor done.  But being aware of these biases and taking proactive steps to counter them will help you avoid misleading feedback and give you more confidence in your decision making.

The post How to Avoid Market Feedback Traps appeared first on Mind the Product.

Source: Mind the Product https://www.mindtheproduct.com/2019/09/how-to-avoid-market-feedback-traps/