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Which Customer’s Voice Matters Most?

August 9, 2011

A brewing discussion about Starbucks’ new coffee flavor highlights a challenge facing innovation-seeking incumbents: Which customers should we listen to?

As part of a broader effort to reinvigorate the company, Starbucks recently rolled out a mild-tasting coffee called “Pike Place Roast.” It has quietly moved away from offering bolder-tasting coffees, such as its Sumatra brand, particularly in the afternoon.

Starbucks brought Pike Place Roast to market in response to complaints from Consumer Reports and others that its coffee tasted bitter or burnt. A small group commercialized the brew in six months–an astonishingly short period of time in the food industry.

While Consumer Reports and the mass-market has cheered, a vocal group of core Starbucks loyalists panned the coffee–one reviewer on a Starbucks Web site designed to solicit customer feedback called it a “fundamental, grievous error”–as watered down and away from what makes Starbucks distinct.

Incumbents seeking to create new growth often face a version of this dilemma. Should we listen to our best, most loyal customers, or should we turn our ears towards customers we’re not serving well, or even to customers we are not serving at all?

Like many things in innovation, our belief is that wise companies turn this “or” question into an “and” statement. Companies have to have the ability to listen to and serve their best customers while simultaneously finding out how to listen to and serve dissatisfied customers and customers who don’t consume anything at all.

Think about how Apple has broadened its iPod line since introduction. It didn’t just increase capacity of its core player to appeal to technically sophisticated consumers who wanted to jam every song onto their players. It also made more aesthetically pleasing players (the nano line) to target less-technical consumers and smaller, cheaper players (the shuffle line) to target consumers more concerned with price or portability.

Just listening to your best customers can be dangerous. After all, your most satisfied customers have little incentive to tell you to do things fundamentally differently in the face of disruptive trends in your market. Alienating those customers is the wrong move too, because loyal customers are the profit engines of most companies.

It’s a tough trick, for sure, particularly when your company, like Starbucks, essentially follows a single business model.

One thing Starbucks could consider doing is allowing individual store formats to organize in different ways depending on the local customer mix, or even creating sub-brands. The Gap, for example, has its Old Navy, Banana Republic, and Piperlime brands to connect with different customers.

While bean counters might argue that this approach would involve duplicative overhead, it could also allow Starbucks to better connect with different groups of customers, helping to power the growth it so sorely needs.

Scott Anthony

Scott leads Innosight’s Asian operations. His fourth book on innovation, The Little Black Book of Innovation, will be released in early 2012. Follow him on Twitter at @ScottDAnthony.

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From → Customers, Innovation

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