Data shows that customer-centered businesses outperform their competition.
According to a survey from California Review Management, companies who said their customer focus was “very mature” experienced 2.5X the revenue growth of companies with a “very immature” focus.
And it can touch every aspect of the organization: Engaged employees are a key part of operating a successful customer-centric business, which, when done well, drives a feedback loop that can power talent recruitment and retention.
But too often, another story emerges: Tech companies lose sight of their customers as the business grows and internal complexity creeps in. The needs of the customer take a back seat to internal “emergencies” and horse-trading across teams as everyone hustles to meet increasingly ambitious business goals.
It becomes a slippery slope for both leaders and operators as customers become an afterthought.
Over time, conversations focus increasingly on colleagues, not customers. And strategic thinking becomes process management, instead of thinking about how to innovate to better address customer needs.
Most companies don’t make it past the ten-year mark. And all too often, it comes down to one thing: They’ve lost sight of the customer.
There’s lots of advice out there about customer-centricity and why it’s important — but few resources that talk about how to get there.
Especially after your company has veered off-track.
In this post, we’ll break down:
What happens when we lose sight of customers
How customer-centricity builds a competitive moat
How to know if you’ve left your customers behind
How to get back on track
Common mistakes to avoid
About the Authors:
Tom is an Executive in Residence at Reforge and was previously Opendoor’s Chief Product Officer. He oversaw the company’s product and design teams to launch new products, acquire companies, and led teams of over 150 Product Managers, Designers, Engineers, and operators. Prior to Opendoor, he was Chief Product Officer at Coursera, where he helped to scale the company from $1 million to $100 million in revenue. He also led product teams at Netflix as VP of Product, where he helped to expand the company’s subscribership from 8 million U.S.-only users to over 40 million globally.
Before joining Reforge as an Operator in Residence, Kevin led brand and product marketing teams at high-growth startups like Upwork and Workrise. He began his career in nonprofit education, first as a classroom teacher and then with charter school networks, scaling marketing and operations to fuel growth.
What Happens When We Lose Sight of Customers
All startups grow — they’re dead if they don’t. We can all agree on that point.
As the business grows, the team does, too. The small founding team evolves into cohorts of experts focused on designing and fine-tuning their respective parts of the business. The mandate is clear, take a great product and scale it to reach more customers.
With more experts comes more opinions on how things should be done to meet increasingly demanding growth goals. In reaction to growing complexity, product leaders start to build roadmaps that unintentionally prioritize internal alignment and resourcing constraints over customer problems.
Even worse, leaders across the company are running from meeting to meeting – only able to develop a surface-level understanding of the problems they’re solving.
This is a dangerous mindset. A surface-level understanding of customers feels like customer-centricity, but it isn’t enough. Only understanding the surface of a problem leads to incremental solutions. And incremental solutions aren’t going to differentiate you from the competition.
In reality, product innovation that truly moves the needle requires a deep understanding of your customers.
Customer-Centricity Builds a Competitive Moat
When customer-centricity is working, it looks something like this:
Tom Willerer shares this example from his time at Opendoor, a digital platform focused on reinventing the way people buy and sell real estate.
“One of the main challenges for our business was to get buyers to switch to our service instead of using a real estate agent.
We did hundreds of user interviews to uncover and deeply understand the problems our target customers faced. We then categorized them as over-served (meaning solutions already existed in the market) and under-served problems.
From this customer discovery, we uncovered a significantly under-served problem was actually winning a home after putting together an offer.
Based on this insight, we developed a program where we turned buyer offers into all-cash offers creating more attractive offers for sellers and helping our customers win the home.”
Focusing on this under-served problem was an innovation that helped Opendoor delight customers, created loyalty, and ultimately become a billion-dollar run-rate product.
Customer-centricity creates the space for teams to build and maintain empathy and inspiration in their daily work. From this empathy and inspiration comes non-obvious customer insights. These insights are made from frequent, intentional interactions across customer segments.
A team that’s distracted by process management and internal problem-solving doesn’t have time to truly get to know its customers.
Non-obvious insights are the aha moments that take a product from merely liked to loved. Obvious insights are already being addressed by your competition but product development based on extraordinary, non-obvious insights creates a competitive moat in three ways: brand love, retention, and continued innovation.
Product development rooted in non-obvious insights allows you to:
Delight your customers and build brand love. When you truly know your customers and the problems they face, you have a unique opportunity to show – not just tell – your customers “we get you.” From splashy marketing campaigns to more low-fi product interactions (like Asana’s Celebration Creatures), you’ll build a personal relationship with your customers. Consistently delivering delight builds brand love. It’s both hard to copy by your competitors and irresistible for your customers to share with their networks. It’s a one-two punch to generate awareness for your product and build a stronger relationship with customers at the same time.
Create reasons for customers to stay. When you’re solving meaningful problems for your customers, they have less motivation to look for alternatives. And with customers at the center of your product development process, new features and new products will drive even stronger retention. A sticky product fits seamlessly into its customers’ lives. Why would your customer take on the extra work to find and adopt a new product when yours checks all the boxes?
Drive innovation. True innovation is rooted in solving an under-served, non-obvious customer problem. When your product continually evolves to better meet existing problems and even address new ones, you’re powering the flywheel that drives even more of the customer delight and retention we covered above.
When you deeply understand your customers, you may end up making business decisions that seem counterintuitive on the surface.
But taking risks like delaying immediate returns can help develop a powerful long-term relationship with your customers.
Jeff Bezos once shared an example of how this plays out at Amazon.
“We've done price elasticity studies, and the answer is always that we should raise prices. We don't do that, because we believe — and we have to take this as an article of faith -- that by keeping our prices very, very low, we earn trust with customers over time, and that that actually does maximize free cash flow over the long term."
Have You Left Your Customers Behind?
The secret to success for companies that have avoided these pitfalls is twofold: systems and culture.
Both components work together to keep teams focused on how their company fits into the lives of their customers.
As a leader, your role in building customer centricity is to:
Establish systems for the business that keep customers at the center of decision-making
Act as a culture-bearer by setting an example for your teams to follow
Here are a few questions to ask yourself when you’re unsure if your company is customer-centered.
If you’re not answering each of these questions with a strong “yes!” then you have room to improve.
Systems
How often are product managers talking to customers?
How often are product managers engaging with raw customer data? What about engineers and designers?
Are your sales and marketing teams having conversations with customers outside of sales motions?
How many hours per week is your CEO talking to customers?
How often is your CEO looking through raw customer data? What about your CPO, CTO, and CMO?
Culture
How are customer insights shared and referenced during interactions with coworkers?
Are there any customer champions outside of the research team?
When does your exec team talk about customers and customer problems?
Can leaders cite specific problems, or even better, specific examples of customers, that drive the business strategy?
Now, we’re not prescribing “the right answer” to any of these questions.
But they can guide your thinking and help identify small steps to reorient your business around customer problems.
Of course, we all should be striving for as often as possible but only you know what’s realistic for your business and teams.
If your answer to most of these questions is “not as often as I’d like,” don’t worry, it happens to most business leaders at some point as they scale their business.
In fact, we talked with over 20 tech leaders to learn from the best when it comes to re-focusing your business on customer-centricity and staying there.
Let’s take a look at what they had to say.
How To Get Back On Track
Customer-centricity should happen across all roles, levels, and teams. But if you’re looking to build a strong foundation and set an example for the rest of the business, we’d suggest starting with product development.
Your product (or service) is the manifestation of your company’s understanding of your customer. It’s the tangible delivery of your brand promise. Because it’s at the core of your business, your approach to product development is the perfect place to refocus your business on what matters most.
Most product development processes have a few phases, for instance:
Understand: deeply understand the customer problems
Explore: generate a plethora of potential solutions to the core problems
Refine: validate which solutions are worth building
Ship & Learn: build the few solutions you want to ship and learn what works
During each of these phases there are a few things you can do to center them on your customer, which we’ll detail in the sections below. We’ve divided these activities into three types of activities: ones to prioritize, ones to operationalize, and ones to ritualize.
Activities to Prioritize
By prioritizing customer centricity, you’re specifically allocating time that might otherwise be spent on “run the business” activities.
Understand: Sit in on research; don’t just outsource to the research team
Explore: Review actual research artifacts, not just the summaries
Refine: Ask for customer stories/anecdotes to support research syntheses (real stories to add color to research findings)
Ship & Learn: Join customer research calls to understand how they’re using specific features in their day to day.
Activities to Operationalize
As a leader, you can operationalize customer centricity by embedding activities into existing systems and processes along the product development process.
Understand: Block off time on your calendar weekly to asynchronously consume research artifacts.
Explore: Ask the Research team to create “movie trailers” of customer research projects to give a representative sample.
Refine: Begin team meetings or sprint planning meetings with 1–2 customer service calls.
Ship & Learn: Invite customers to QBRs (quarterly business reviews) to share their perspectives on how the product is working for them.
Activities to Ritualize
And finally, you can make customer centricity ‘sticky’ for teams across the business by creating experiences to build a shared connection with customers.
Understand: Require product managers and designers to join a majority of customer research or prioritize customer research where a PM has committed to joining/being involved.
Explore: Add a real-world customer story at the beginning of planning templates (i.e. requirement docs, roadmaps, briefs, strategic plans, meeting and event agendas, etc.)
Refine: Normalize asking questions like "what is the customer problem we are trying to solve with this work?" and "have we validated that insight with real customers?"
Ship & Learn: Create a Slack channel to consolidate and share customer feedback from NPS surveys, Sprig surveys, etc.
Not Sure Where To Start?
Getting a quickly growing company back on track and focused on customer-centricity can seem like a daunting challenge. We polled Reforge’s expert network for lessons learned and creative ideas to create empathy and inspiration for your customers across your entire company.
At Ro, Lisa Kolodny would host birthday parties for customer personas as a way to get teams excited and talking about each persona’s traits. In order to give toasts to “Dave,” they’d have to know details about him and deliver stories that were grounded in customer research.
Matt Marenghi shared that during his time at Netflix, the engineers would observe and actively participate in qualitative research sessions led by the consumer insights team. These engineers – who usually didn’t have the opportunity to participate in activities like qualitative research – would then share their experiences and observations with their teams.
A common fallacy Adam Grenier saw at both Uber and Lambda School was that because people spoke with customers so frequently (drivers with Uber and students at Lambda School), people across the company carried an assumption that they understood their problems. But his eyes were opened when he went and lived the experience of his customers. He learned much more by being a driver and being a student than he did through conversations. He now looks for ways to recreate ‘being’ a customer to get an unbiased first-person perspective as frequently as possible.
At Slack, Behzod Sirjani had a company wiki to help democratize access to customer insights. It was simple in format — just text-based Q&A with select charts and citations that linked to research studies, relevant dashboards, etc. It was especially helpful as new people joined the company since they’d be able to ‘download’ the most important things teams already knew about customers, allowing them to avoid digging through hundreds of reports and thousands of slides.
Alissa Reiter suggests creating opportunities for teams to make personal connections with customers on the impact your business has on their lives. At Zillow, the marketing team hosted workshops that placed people into the experience of moving and reflected on what it meant in their lives. Exercises like these pushed team thinking beyond the functional and into the emotional role the business plays in its customer’s lives – all in service of building empathy.
At Opendoor, Tom Willerer hosted a customer week once or twice a year. During this week, his team would host several sessions where employees can learn who the core customers are: what problems they face, their core Jobs to be done, and their emotional needs when using or evaluating your product. These events require some prep but they are well worth it in that the organization gets energized to solve real problems for your customer and you have material that can be used to bring new hires up to speed.
Kevin Bechtel shared that customers joined all-hands meetings at Upwork for a fireside chat with an executive. It was engaging for the entire company to watch a casual interaction between a leader and a customer. The host would always end by asking “if you could improve one thing about our product today, what would it be?” The answers were usually direct and sometimes hard to hear at first, but they always provided great insight and motivation for everyone to get to work as soon as the meeting wrapped.
As you can see, there’s not one right answer – and no right place to start. But keep in mind that any movement is better than no progress. We guarantee your team is craving a connection to their customers.
Try something – you’ll be surprised by the big impact a little change can make. And your customers will reward your efforts.