The product always obscures the customer

Customers form the most important resource of a firm. Without customers, the firm cannot exist. Think about the heading again. The product always obscures the customer. An obsession with products, production processes and routines creates near-sightedness and makes customers invisible. If this indeed is the case, how can firms successfully maintain their customer relationships, and acquire customers in the first place?

A problem with products is that when developing, designing, producing, selling, marketing, delivering, installing, repairing and maintaining products these are so concretely and intensely present. Even more importantly, products occupy the minds of everyone involved. Consequently, so much time and energy by the sellers are devoted to handling products in various ways and capacities that a thorough interest in the customers suffers. Customers truly are at risk to become invisible.

This problem does not concern execution only. Middle management and the firm’s strategic management equally much use their time and energy to strategic and operational issues related to products, and the much-needed focus on customers and their lives and goals are marginalised. At the same time, it is safe to assume that a truly customer-focussed firm probably is more profitable than one that is internally focussed.

Not only manufacturing firms suffer from this near-sightedness. Service firms may also find themselves overly preoccupied with tangible and product-like resources, processes and routines. Especially, when productisation is confused with standardisation and not understood as systematisation of resources and processes, service concepts, delivery routines and standardised means of meeting customers can turn what could have been service into product-like procedures that equally much obscure the customers, both physically and mentally.

Put the product and productised service aside for a moment and focus on the customers first.

How could this problem be handled? The answer is quite simple: put the product and productised service aside for a moment and focus on the customers first. Acquire thorough insight into the customers’ life and activities, be they mundane or unique and seldom occurring. Get solid knowledge of what they want to achieve or could achieve in their lives, and why they are not able to achieve wanted goals or perform wanted activities. Find out what activities they find uncomfortable or difficult to perform. With such insight into the customers’ life, products and services can be designed and developed and the many processes and routines that tie a firm and its customers together can be planned and executed in much more customer-focussed ways that create use value for the customers and stand a fair chance to be more profitable for the firm. It is a matter of turning inside-out management into outside-in management.

The firms need to understand two fundamental things: they must understand their customers’ activities and goals as well as they are familiar with their own products and many processes and routines, and they must understand what their customers consider good quality as well as they understand their own quality standards.

Conventional and standard market research is not enough. Ethnographic methods are required to study for example what goes on in the customers’ life, and how they think about what they are doing, would like to be doing, or are not doing at the moment. Furthermore, the firm must know the customers’ basic values. Such values determine what kind of solutions are accepted and not accepted. Only when all this is understood, that is, when thorough customer insight has been acquired, one can come to conclusions about what is needed. Starting with studies of what customers need often leads astray and makes managers make less accurate and sometimes even dangerous decisions.

Christian Grönroos
Professor Emeritus

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