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3 minute read
By Gal Ben Dor, Head of Strategy at Entor
In the dynamic world of product management, the debate between prioritizing customer needs versus revenue goals is an ongoing one, even if it’s clear to all involved that the two correlate often. At Entor, we work with many product leaders who are trying to define their one source of truth for the most strategic decisions and set the priorities for their organization. Torn between what they hear from customers, and the pressure to pursue revenue goals and monetize the product, sometimes at all costs - it’s often hard to make a call what trumps what.
While revenue is undoubtedly crucial for any business, a customer-focused approach offers a more sustainable path to long-term success. Putting customers first in your product strategy isn’t just good ethics – it’s smart business.
Increase Trust, Not Just Transactions
A product strategy centered around customer needs leads to products that truly resonate with your target audience. Delivering a feature tagged as a ‘Sales blocker’ by a sales rep might be very appealing - but understanding and solving real customer problems builds a foundation of trust and loyalty, far beyond the next renewal or monetization of a feature. This trust goes beyond any single transaction, fostering long-term customer relationships that are more valuable than immediate revenue.
Sacrifice Short-term Gains, Not Long-term Loyalty
A revenue-first approach may lead to quick wins and dollars added to the company’s top line, but often at the cost of sustainable growth and the customer experience. Products developed with a primary focus on revenue risk neglecting the deeper needs of customers. This can result in less innovation and potentially harm customer trust and brand reputation. In addition, we have to remember that ‘loss aversion’ occurs when a user is getting used to getting what they ask for (which often isn’t even what they really NEED) as part of the renewal process - and suddenly has to deal with longer wait times or other priorities. Getting your customers used to the fact that their renewal is the ‘requests time’ carries a risk of fostering a relationship that is transactional instead of value and loyalty-based. The impact in the long term might be substantial.
Optimize for Innovation, Not Just Earnings
Companies focusing on customers are more likely to innovate in meaningful ways. They dive into the use cases and are more in tune with new emerging types of customers. Engaging with customers provides insights that fuel relevant and impactful product enhancements. This ensures your products evolve with changing customer needs, maintaining competitiveness and relevance; In other words, while looking at your book of business today might tell you what your customers today want you to prioritize – it’s also listening to smaller customers or niche segments that innovate faster and will enable you to create the solution of tomorrow, stay relevant and develop ‘first mover advantage’ into new areas in the market.
Think Marketing, Not Just Sales
There’s a marketing element here, too, and a clear message that when customers are prioritized, revenue follows. Satisfied customers have a higher lifetime value, purchasing more and staying loyal longer. Their endorsements reduce marketing and customer acquisition costs, serving as powerful, organic growth drivers. A happy customer who feels delighted or in love with the product, will join your advisory board, serve as a reference, write a testimonial, share a glowing review, join a webinar - and will also refer friends and colleagues. In a world where every email or LinkedIn message is considered ‘white noise’ - this type of customer-led marketing is pure gold, and the Product team should champion it.
Build a Mutual Vision, Not Just a Revenue Stream
A customer-focused strategy fosters a sense of partnership between your company and your customers. When customers feel that a company is invested in their experience and outcomes, they are more likely to commit to its products and services, creating a shared vision for mutual success.
So now that we agree (well, I hope you do) - where do we start?
Here are some of Entor’s Monday Morning Steps for a Customer-Obsessed Product Organization:
1. Start with Customer Feedback: Implement regular channels for gathering and reviewing customer feedback, ensuring it directly influences product development. Use AI and technology (yes, shameless plug to Entor’s incredible product here) to surface the themes and make sure you address them in the Strategic Planning phase.
2. Empower Your Team to Be Customer Advocates: Encourage every team member, regardless of their role, to understand and prioritize customer needs in their daily work. Surfacing parts of call recordings, holding Customer Advisory Board meetings and sharing the recording with other PMs, or creating a cadence where every PM has to meet a “customer call quota” are all possible steps. Also here you can automate the data collection, for the first time, with Entor.
3. Regularly Review Customer Journey Maps: Continuously update and refer to customer journey maps to understand and enhance the customer experience. Use data to understand adoption and behavior, and make sure the team shares knowledge stemming from these.
4. Foster a Culture of Empathy: Cultivate an organizational culture that values empathy towards customers, encouraging teams to put themselves in the customers' shoes. It might be helpful to set KPIs like response time, to make sure this is met.
5. Make Customer Success a Key Metric: Integrate customer success metrics into your key performance indicators for the product team, ensuring that customer satisfaction is a primary measure of success. Use a platform like Entor (yes, I did again) to measure your team based on Customer and Business outcomes, and initiate a leadership forum of Product and CS that shares a dashboard of key customer metrics with shared accountability.
