If employees are the starting point for connecting businesses to customers, products come in a close second place.  For a company to have value to a customer, products must have value.

There are many ways to determine value.  Some customers value speed, some value low cost, and others value status.  Products must appeal to the targeted market.  Walmart knows it is not Nordstrom’s.

I occasionally run across companies who confuse “revenue at all costs” with “revenue at the right margin.”  What would happen, for example, if Nordstrom’s tried to appeal to a typical Walmart customer?  In order to sell anything, prices would have to come down.  Falling prices would be followed by fewer perks, say less personalized service when buying clothing.  Or perhaps Nordstrom would have to eliminate its well-known return policy.

Another case arises when the target market doesn’t place enough value on the products to support the business.  Blockbuster and Hollywood Video are finding out what happens when the products no longer meet the convenience and cost objectives of customers.  Companies like Netflix must take steps to align their products with their customers.

In short, the products and services we offer must meet a need.  Note that being trendiness is not likely a sustainable business.  Pet rocks and parachute pants had their place once.  They now belong in museums as relics of earlier times.  Sad note for engineers… cool stuff (e.g. products without a market) isn’t the answer either.

The pivot point is that products that meet customers’ needs, sold at a fair price can sustain a business.  Meanwhile, the opposite is not true: businesses cannot be sustained by products that fail to meet customer needs.  The second pillar of aligning businesses to customers is to develop/deliver products that succeed in meeting customer needs.

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Aligning your Business to Customers: Pillar 2 – Products
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