Listen to Competitors Rather than Customers - Google, IBM, Tribune, Cisco

Leadership

Listen To Competitors--Not Customers

01.06.10, 03:10 PM EST

The accepted wisdom that the customer is king is all wrong.

That's the start to my latest Forbes column (Read here.)  Think about it.  What would Apple be if it had listened to its customers?  An out of business niche PC company by now.  What about Google?  A narrow search engine company - anyone remember Alta Vista or Ask Jeeves or the other early search engine companies?  No customer was telling Apple or Google to get into all the businesses they are in now - and making impressive rates of return while others languish.

But today Google launched Nexus One (read about it on Mobile Marketing Daily here) - a product the company developed by watching its competitors - Apple and Microsoft - rather than asking its customers.  In the last year "smartphones" went to 17% of the market - from only 7% in 2007 according to Forrester Research.  There's nothing any more "natural" about Google - ostensibly a search engine company - making smartphones (or even operating systems for phones like Android) than for GE to get into this business.  But Google did because it's paying attention to competitors, not what customers tell it to do. 

No customers told Google to develop a new browser - or operating system - which is what Chrome is about.  In fact, IT departments wanted Microsoft to develop a better operating system and largely never thought of Google in the space.  And no IT department asked Google to develop Google Wave - a new enterprise application which will connect users to their applications and data across the "cloud" allowing for more capability at a fraction of the cost.  But Google is watching competitors, and letting them tell Google where the market is heading.  Long before customers ask for these products, Google is entering the market with new solutions - the output of White Space that is disrupting existing markets.

Far too many companies spend too much time asking customers what to do.  In an earlier era, IBM almost went bankrupt by listening to customers tell them to abandon PCs and stay in the mainframe business ----- but that's taking the thunder away from the Forbes article.  Give it a read, there's lots of good stuff about how people who listen to customers jam themselves up - and how smarter ones listen to competitors instead.  (Ford, Tribune Corporation, eBay, Cisco, Dell, Salesforce.com, CSC, EDS, PWC, Dell, Sun Microsystems, Silicon Graphics and HP.)

Comments

[Leon Fangnigbe]

I agree that you do need to listen first to COMPETITORS for INNOVATION, then to customers to improve the current products after all a Corporation must be customer friendly.
Leon Fangnigbe
www.TaxMamba.com

[Joseph Joel Sherman]

Adam,
Thank you for this post. I think there is a time to listen to customers and a time to ignore them. As you note, Google could have remained just a great search engine company if it only listened to customers. Do you see any value in listening to customers?

Perhaps listening to customers is a great way to improve current products or services, but not for looking to the future of new business lines.

[Matt Biskup]

Here's some red meat for you Adam "Palm CEO Jon Rubenstein: 'I've never used an iPhone'".

http://digitaldaily.allthingsd.com/20100108/rubinstein/

I can almost hear Adam burst out with laughter. Here's the link to a cool graph Adam found representing the pathetic performance of Palm relative to other innovators (on this site) http://www.thephoenixprinciple.com/blog/2009/12/innovation-budget-2010-businessweek-ge-pg-google-apple.html

Imagine Palm's Marketing team just learning what their CEO said at CES in front of the world. This guy just took 2 years worth of marketing effort and snuffed it out like a cigarette on a city sidewalk. As a CMO, I can only hope Palm's Marketing team works in a one-story building.

I'd like to suggest that there may be a half-step in between "watch competitors" and "interview customers" and that is "interview customers that fired you".

Or maybe better, hire an independent firm to interview your clients for you so you get the unadulterated truth not a red herring because your ex-customers don't want to hurt your feelings, or be confrontational.

Hiring an outside firm to interview ex-customers may be a way to discover those fringe competitors that your organization doesn't yet see as competitors.

And I've always maintained that my customers are my biggest potential competitor. They're constantly trying to find out how to get the service you offer for less, even if it means taking the production of whatever your company sells in-house. So keep your eye on them as well as a type of limited direct competitor.

[adam hartung]

Great comments. Thank you

[cartes memoire]

Hello
You have well written about those companies.I think these companies are only giving competition to each other.I completely agree with your points about those companies.Actually Customers are more important.Thank you for this post.

[refurbished computers]

Perhaps listening to customers is a great way to improve current products or services, but not for looking to the future of new business lines.

[cheap computers]

Google is watching competitors, and letting them tell Google where the market is heading.