On November 3rd GMC Software is hosting a roundtable at the Guidewire Connection conference on the topic of outside-in customer strategy (do have a read of the Schorem barbershop and Apple examples). As I began developing the discussion guide for this topic, I started to think about some success stories for this customer-first approach. After I spent some time on this subject, I realized that perhaps a more interesting approach would be to consider where listening to the customer went wrong.
The first example that came to mind was the launch of “New Coke” in 1985. Prior to launching this new product, Coca Cola conducted some of the most extensive market research in history. Time and again, customers told Coca Cola representatives that they not only liked this new formula, but they liked it more than the old Coke formula in a blind taste test. Naturally, Coca Cola listened, and not only did they put New Coke on the shelves, they stopped producing the original version. Despite some initial market success, the backlash from customers grew until Coca Cola was finally forced to relaunch “Coca Cola Classic”. So how did this example of listening to the customer go wrong? The story of New Coke is a staple of the “marketing gone wrong” genre. It’s a big enough story that Coca Cola has an entire page dedicated to telling the company’s side of the story.
I believe that the story of New Coke is not a story of marketing gone wrong, but rather a story of communication gone wrong. Coca Cola thought their marketing research was asking customers if they liked New Coke more than the original formula. What the company’s representatives were really asking was if these particular customers liked drinking a small sample of a sugary drink while being asked questions. If those surveys had instead asked “do you like this new taste enough to never drink original Coca Cola again”, the marketing survey would have had a very different answer. The lesson here is not “don’t ask your customers what they want”, the lesson is “make sure that you’re asking the right questions”. Effective customer communications must be thoughtful. Effective customer communications means saying the right thing, and not only asking the right questions, but making sure that customers are answering the question that you think you’re asking.
For a fuller treatment of this idea, I recommend the book “The Upside of Down” by Megan McArdle.
Schorem picture credit: Daniel Martorell
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