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Who would intentionally ignore their customers - who would ignore the ones ensuring you make or exceed your revenue targets?

What Geoffrey More Says - If you are a Geoffrey Moore fan, you probably know that in the course of the “tornado” expansion of a software company, its possible to supply the market without having to dwell on the needs of each individual customer. Moore gives an excellent example of Oracle doing this and based on their stage in the tornado, it being a preferable state.

Here are a few ways you can ignore your customers and their real needs - without any intention of doing so:

Underdelivering on Something Essential. Delivering 99.99% of what you intend to deliver can be worse than delivering only 10% - if that .01% is key to the end result your customer needs to be successful. Lets look at developer tools (though this can apply to any “creation” software). If your customers get into their final implementation (or late beta) and find a critical feature missing - what happens? If it is a feature that impacts their revenue or market strategy, they will turn tail and likely never look back. What can your customers do in this situation? They can…

Try to come up with a workaround. If they can achieve this, is there really a problem? That depends on the cost of implementation and if the result really achieves what they intended to do in the first place.

Revise their Market Strategy. Your customers are starting to hate you at this point. Using a cross-platform development tool, one client found a bug that resulted in them not being able to deliver a Mac OS X version of their product. Since a key differentiator of the product was itself being a cross-platform product, being unable to deliver a Mac OS X version had a huge impact on the marketability of the product.

Re-Engineer With Another Tool. The cost is variable here, however having found critical fault with your product, how likely is it that they will not only stop using it entirely, but also slam your product whenever possible? Not only have you lost a customer, you have gained a perpetual source of negative criticism that may long outlive any fixes you make to your product. To this customer - it is unlikely to matter that you fix the bug later.

Ignoring Customers Because of Thinned Resources and Undifferentiated Product. Your marketing team may come up with a plan to deliver multiple new products based on one core product. This can be attractive because it could mean you can almost magically deliver a product family rather than just a single product. A major problem with this strategy is that you may not have enough core technology to fill out an entire product line. For example, lets say you have a core graphics technology that makes use of fractals to achieve some end. You could come out with a well targeted Adobe Photoshop plugin. But a marketing team member wants to also plug this technology into the consumer market - sell more based on volume and get a few dollars from a target group that otherwise won’t pay a premium price to get the Photoshop plugin (or doesnt have access to a Photoshop plugin compatible software host). That’s two products that your development team will have to maintain and upgrade - and consequently marketing resources are expended to reach this new target customer. Upgrading your entire product line means you either have to expand your development team or decide what not to improve in the next version - so who is your target customer - the Photoshop users or digital camera prosumer types?

Ignoring Old Friends in Favor of New Ones. Early adopters can keep your business going while you prepare for going after a larger, more conservative market. Early adopter customers tend to invest a lot of themselves into a product, and as a result can be a high maintenance group - demanding very specialized upgrade features or special support. Laying your sights on the next big block of customers is one thing - but are you really ready to adequately pursue that next group - and undersatisfy your early adopters - the ones who consistently pay for upgrades?

There is an inverse problem to Ignoring Old Friends - assuming that new customers are exactly the same as your old ones. Early adopters are tapped out quickly. Lets come back to this one later though.

Relying on Numbers You Want to See. First time CEOs can get enamored with estimated sizes of potential markets and make two mistakes in the process…

Assuming Market Size and Achievable Sales are Even Remotely Similar. With some very rare exceptions, it is unusual for one company to entirely own a market space - especially one that is not extremely well financed or staffed by extremely experienced executives and developers.

Assume Accumulated Experience Translates to a New Vertical Market. The computer software market is a funny market because it produces products that support not only itself and the hardware market, but vertical markets that otherwise have nothing to do with software. A close example of this is developing network load balancing software vs actually running an Internet Service Provider. Certainly as a developer, you have come to know the requirements of your target market - ISPs. However, you have no previous experience with the brand new type of customer - the home dial up or broadband user.

Relying on Assumptions About Channels and Customers. In the mid 90’s, unless you were selling business-to-business software, most software was sold in retail or through catalogs (mail in whatever form). Although these are not the exclusive venues for purchasing software any more and a generation of computer users has since come to adulthood buying through electronic resellers or by direct download (of just about any intellectual property!), that does not mean a target customer group will purchase through the venue you would like to sell through. With the release of Microsoft Windows Vista, it is now possible to purchase the entire operating system as an electronic download. Yet customers are highly conditioned to receive CDs or DVDs and so far downloadable Windows has not met with much sucess. Another example are Intuit Corporation’s accounting and tax calculation software - Quicken, Quickbooks and supporting TurboTax products. Clever Intuit effectively forces one customer segment to pay for US state specific software by direct download. Yet Intuit floods the channel with boxes to reach customers who have no desire at all to buy elsewhere. If your customer wants to buy through a venue they are happy with - don’t think you will easily break that habit by only offering your product online - they want it where they want to buy it.

Not Accounting for Timing (with Technology). Chances are, your customers rely on their purchases to maintain or support their competitiveness in their own market space. Your customer may require delivery of a technology by a certain date or time frame or seriously consider moving to the competition. An excellent example of this is the state of the 3D game market. If you develop a 3D game engine, delivering what was state-of-the-art in 2003 but deliver it in 2006, chances are your early adopters have moved on - your engine looks woefully out of date and so will any products based on it.

Not Accounting for Timing (in the Channel). Another way to blow it is to ignore time based buying habits. Computer games and software consumer products that are intended to be purchased as Christmas presents need to be pouring into the distribution channel by late September. For direct sales - barring any consideration of marketing - a difference of one or two weeks in December for availability can turn opportunity into disaster. Your customer has to have it under the tree well before December 25 and no later.