Let’s take video rentals for example. Blockbuster was very poor at understanding their customers. When DVD came in, they were slow to switch from VHS. When downloading came in Blockbuster didn’t have an offering, but Netflix, who was renting DVDs via mail, saw the opportunity to evaluate their customer’s behavior given new variables. As bandwidth improved, suddenly it became feasible to stream video entertainment real-time over the internet. Brilliant! Netflix went after it, and now they are the leader. But how did they know to do this? They knew their customer.
There are many ways of getting to know your customer, but one way is to watch what techies do. If techies like streaming video and have a great experience in 2005, then perhaps if a company made this easy to use and offered it in 2007, it might take off. Did Blockbuster think of this? They had a me-too offering to complete with Netflix, but it didn’t go anywhere because they were late to market.
Furthermore, Blockbuster was plagued with operational problems that any customer satisfaction survey could have caught. For example, if a customer hadn’t rented a movie for a few months, they needed to fill out a whole new application before they could rent movies again. A lot of customers revolted and walked out.
Finally, knowing your customer involves seeking them out and interacting with them. For example, the Wall Street Journal today said that P&G has seen poor results in China. The CEO, David Taylor, said that the company hasn’t kept pace with the market there. “He said he spent time at the home of a 33-year-old mother who doesn’t buy P&G products which she considered old and outdated and not high-end enough.” Therefore, more than brilliance it takes energy to reach out to your audience.
Mobile is now changing the world faster than any other revolution. How is your target market using mobile? How is mobile changing their environment? It’s closing old doors and creating new opportunities. Do you know how your world will change in the next year? Best to put forward some energy and find out.