Yes, it’s of crucial importance.
Why? Consider Ring.
Home Security companies have been selling alarms for years. For so long, that for most people, one equals the other; securing homes equals alarms. Excellent alarms, with the best functionalities thanks to continuing product innovations. When asked how happy they are with the product, customers are satisfied or even very satisfied. Then comes along a new market player – Ring. Ring establishes $7 million in sales in this market, is now sold in 100 countries and has collected $200 million in investment.
Ring doesn’t sell alarms.
Room for a new competitor
How did Ring make such an entry into this market? Without selling the accepted product that customers were happily buying? The answer is confoundingly simple. Ring had a better understanding of the true customer need; the need to keep burglars out. Alarms function once the burglar has broken in. Ring’s product stops the break-in from happening. It is not hard to see what home owners prefer.
Ring introduced their video doorbell product. This product allows their customers to remotely answer the door, whether they are at home or not. Using their smartphone they can see and talk to the person ringing their bell. So when the burglar rings the bell to check no one is home….
Of course Ring made use of technology developments to create this new product. This makes it tempting to consider this another example of technology disrupting a market. But this view misses the opportunity and creates room for competitors. As Ring’s case illustrates there is an enormous opportunity in having the best understanding of your customer; why he buys your product. It enabled Ring to step in and take a share of this market. The other side of the coin shows the danger. If you do not focus on understanding why, you create room for a competitor to step in and take a share of your market.
Focus on your customer. Ask.
There is a simple, but very effective step you can take. Start asking your customer why. Why he is using your product. Do this every time you interact with your customer at the next networking event, contract renewal, complaint resolution, invoice query. You will build an understanding which you can then use to defend and grow your share of the market.