By Bill Albert, PhD, SVP of Global Customer Experience

I have spent the last 25 years of my career thinking about how to deliver a better customer experience. Unfortunately, I have seen far too many products fail over the years. I see many teams, with all the best intentions and proper training, launch products that the market simply doesn’t care about. It is so frustrating when customers respond with a “meh” or “this isn’t really very useful to me.” Do they have any idea of how much time, money, and emotion went into creating this product?

Obviously, customers don’t really care. Nor should they.

Customers only care about whether the new product or service is valuable to them. So, why do so many products fail due to a lack of product-market fit? And how do you avoid common pitfalls?

There are many reasons why products fail. Including poor performance, targeting the wrong market, not having the right business model, regulatory constraints, a delay in entering the market, a hyper competitive landscape, not having the right team in place, or a poorly executed marketing plan. But the most common reason that products fail, is simply the lack of demand.

Essentially, the customer just doesn’t want the product or service you are offering. The product just isn’t that useful or fails to deliver value. Or another way to think about it is that the product is not solving a pain or problem that a customer is experiencing. Why does this happen so often? What are so many organizations missing when it comes to validating product-market fit prior to launching a new product?

Quibi, launched in 2020, was a streaming platform that aimed to revolutionize how people consume video content by offering short-form videos primarily designed for mobile viewing. Despite heavy investment and an impressive lineup of content, Quibi failed to understand its target audience's viewing habits deeply. The platform did not resonate with users, partly because it underestimated the importance of flexible viewing options (such as the ability to watch on larger screens and share content on social media), especially crucial during the COVID-19 pandemic when people were spending more time at home. Quibi shut down just six months after its launch.

At a fundamental level, the lack of product-market fit is due to a lack of understanding of customers’ motivations, needs, desires, and pains.

If an organization does not have a deep understanding of the customer, how can they expect to design and build a product that people care about? Deep customer insight is the foundation of any successful product. One well known example is Google Glass, the AR headset that was launched in 2013. Ultimately, it was a product that was designed in search of a problem. It was cool technology at the time, but no one knew what to do with it. It simply failed to resonate with a broad set of customers, because it did not solve any pressing problems.

Without knowing the customer, you cannot deliver value to them. Value can take many forms. But, from a customer perspective, value can be in the form of solving a pain, producing delight, or just making the customer feel better about themselves. Value is really anything that they care about. It is expressed in the form of a value proposition. If the value proposition is not strong or clear enough to justify the cost or switch from existing solutions, products are likely to fail. For example, Juicero offered an expensive juice press that was not significantly better than manual alternatives, leading to its failure. When designing a new product or service, an organization needs to not only know the value they are delivering, but how that value compares to the competitors. Without a clear advantage on the value proposition, an organization will need to compete in other ways. That’s risky.

Another way of thinking about value, is how disappointed someone feels if that product were no longer available. Sean Ellis established the 40% Test method. It’s a survey designed to measure the proportion of customers who would be ‘very disappointed’ if the product ceases to exist. According to Ellis, startups who scored less than 40% for this response, had issues with establishing and growing market share.

Many folks stop at “Do more work to understand your customer”. I want to peel back the onion a little more and explore WHY organizations fail to understand their customer.

First and foremost, many organizations simply don’t listen to their customers in any serious way. They often think they are, though. Perhaps by talking to a few of their friends or family members, or by overly indexing on a few anecdotes from years ago.

Or they just feel that they already know the customer because they have been working in the industry for years, and are able to glean exactly what they want, without ever actually sitting down and speaking with them.

Or perhaps they feel like they “know” the customer through their market research or analytics. Regardless, failure to listen to customers means that the product can easily miss the mark and fail to deliver any real value.

For example, Google+, launched in 2011, was an attempt to enter the social networking space. Despite the initial hype and its rapid gaining of users, Google+ struggled to understand and meet the needs of its potential user base effectively. Issues included a complicated user interface and lack of clear differentiation from competitors like Facebook.

Other organizations mean well – they listen, or at least try to listen to their customers, but they often fall short. Sometimes they just don’t ask the right questions. They might ask questions that are biased, or don’t often have a point of comparison, or allow the customer to easily question or criticize a product idea. Other times an organization will start listening to their customers when it is too late in the process, once the product has been mostly developed. Or, it might not just be about the questions, but the failure to understand the broader context (that is why it is so important to get out in the field and observe customer behaviors in the wild).

Lastly, organizations sometimes listen to the wrong people.

For example, they often fail to talk to actual buyers or decision makers, or just focus on customers in a single market, focus only on early adopters, or those customers with a similar set of traits. Diversity and a healthy sample size are key.

As you can see, there are many ways that an organization might be misled about product-market fit. But alas, I will provide some best practices on how to ask the right questions, to the right customers, at the right time, in the right context. Being able to effectively listen to customers and collect the right data is hinged on creating the right organizational culture. To make this all work there must be a culture of “customer first.”

You’ve heard this before – but what does “Customer First” really mean?

• Collective focus on creating products that deliver value;
• Questioning assumptions, particularly those held by senior leadership;
• Building an experienced CX or UX team, with decision-making authority;
• Providing adequate budget to carry out the right research, at the right time;
• Pushing back on product decisions that undermine customer value.

Senior leadership must embody a customer-first mentality, and lead by example. This might be delaying or even killing a product launch that is not resonating with customers. Or, it may be providing the CX team with an adequate budget to rigorously evaluate the value of a new product concept, prior to design or development. Lastly, senior leadership should be demanding that those closest to the product, speak their truth about it.

So, what should an organization do, to mitigate the risk for a lack of product-market fit? Here are my seven ways to ensure your customers actually want the product or service you are bringing into market:

1. Spend a lot of time listening to your customers, through the product ideation and development process. Never assume you already know, because you don’t. Be quiet, and listen to what your customers say. Devote at least 20 hours (and ideally closer to 50 hours) to talking to your customers.
2. Focus on customer pain, and design solutions to solve that pain. There is no better way to deliver value than solving for customer pain. Listen and measure the most significant pain – based on the frequency, severity, and prevalence across your stakeholders.
3. Validate your product ideas by leveraging large, diverse, and representative customers in research. Forget your friends and family – spend the time to find the right stakeholders, including buyers, decision makers, and users.
4. Test your ideas against the competition. Having several points of comparison will provide a more reliable measure of interest. A forced-choice comparison, between your product and your competitors, will often tell you everything you need to know about what your customers really think about your idea.
5. Bring the value proposition to life through storyboards, concept cards, and simple prototypes. Customers will need to instantly understand the value of the proposed product or service, so spend whatever time you need to think through the value proposition at each stage of the process.
6. Test many, many concepts. There is more than one way to skin a cat, as the saying goes. Even though we know the customer's pain, the solution to relieve that pain can take many different forms. Therefore, listen to what your customers think about all solutions.
7. Behavior means a lot more than words. Explore ways to measure customer behaviors, as a proxy for interest or desire for the product or service. For example, providing an email address to be notified when the product becomes available, signing up for a demo, or signing a letter of intent are all signals around various levels of product desirability.