Home Thinking Aloud Evolving Customer Needs – Not Technology – Drives Disruption And Innovation

Evolving Customer Needs – Not Technology – Drives Disruption And Innovation


by Suman Sarkar, author of “Customer-Driven Disruption: Five Strategies to Stay Ahead of the Curve

The rise of the smartphone, fast fashion, and ride-sharing. The decline of industry stalwarts like GE, IBM, and Coca-Cola. Conventional wisdom says that technology is propelling the disruption that is roiling the markets. But this belief is dead wrong. Disruption is, in fact, driven by changing customer needs – and that only those companies that truly understand their customers can succeed.

If you’re not focused on your customers, they will leave as soon as they find a viable alternative, and their departure is only a matter of time. Too many executives concentrate on short-term performance. This often means mergers and acquisitions, incremental innovation, marketing, and global expansion – which, over the long-term, only widen the gulf between the company and its customers.

These ill-fated approaches are built on an outdated understanding of the market – a time when baby boomers were swayed by advertising, when developing nations wanted whatever was “American,” and when consumerism was the rule of the day. In my book “Customer-Driven Disruption” I discussed the very different ways in which millennials and Generation Z approach the world and the marketplace – influenced by peer reviews, driven by the desire for personalized products and service, and unwilling to delay gratification.

Illustrated with examples from companies such as Amazon, WalMart, Under Armour, Tesla, Sephora, Zara, and Qatar Airways, as well as from my own clients in such industries as wireless, medical devices, banking, and retail, I detailed five strategies that any company can adapt in their own push to connect with, and capitalize on, customer needs.

Here’s a look:

1. Win With Current Customers Before Chasing After New Ones.

New customers are expensive to acquire, and typically produce less revenue than would current, satisfied customers. Yet, when faced with declining revenues, most companies focus on finding new customers. Indeed I advised against loyalty and customer retention programs, but encourage existing customers to buy more. It comes down to identifying customers by segments (not the way most companies currently do); determining what services are valued by each segment; creating a range of services based on these differing needs; and pricing the new service appropriately.

2. Personalization Is Not A Luxury.

Mass-produced products aren’t on anyone’s wish list anymore. Today, customers want personalized products and services at reasonable prices. To make personalization affordable, leaders must think completely differently about offerings, create flexible operations – like distributed manufacturing and separate supply chains – and reduce waste. Whoever masters the art of producing affordable, personalized products will enjoy a significant competitive advantage in the future.

3. Customers Won’t Wait.

Most companies spend an inordinate amount of time designing products or services. Indeed, the whole cycle can take so long that by the time the product launches, customer needs have changed or more nimble competitors have captured the market. Firms in all industries can learn to quickly develop products or solutions that address customers’ changing needs, speed up the supply chain, reduce sales promotion, and produce what their customers really want to buy.

4. Good Enough Is No Longer Good Enough.

Now that the public judges products based on reviews and peer recommendations, quality is more critical than ever before. This means offering a level of performance customers can’t resist and the competition can’t beat. Quality can be achieved without prohibitive cost by thinking outside the box, and quality control shouldn’t happen at the end of the manufacturing process, but all along the route – including across the supply chain.

Disregard Strategies 1 Through 4.

What makes you great today won’t necessarily keep you great tomorrow, unless you and your strategies evolve with your customers. That applies even to these first four strategies. Successful companies constantly reinvent and reimagine using 360 triangulation and partner workshops, empowering employee teams, and encouraging attention to detail. Just look at continuous reinvention success stories as Disney and Haier, the Chinese manufacturer.

Disruption can be a death sentence to a business, but it doesn’t have to be. You can use the threat to focus on what’s important — your customers.



Author of “Customer-Driven Disruption: Five Strategies to Stay Ahead of the Curve” Suman Sarkar is a partner with Three S Consulting, located in San Francisco. He has worked with clients internationally in financial services, pharmaceuticals, technology, consumer goods, retail, outsourcing, and government. Before launching his consulting practice, he was a management consultant at A.T. Kearney and worked at Procter & Gamble. He is also the author of “The Supply Chain Revolution: Innovative Sourcing and Logistics for a Fiercely Competitive World“.