Product-centric or Product-led?
It's not the same
I’ve long advocated for customer-centric marketing — not the fluffy “customer is always right” flavor, but the discipline of customer centricity evangelized by Wharton marketing professor Peter Fader and others in recent years. In his book, Customer Centricity: Focus on the Right Customers for Strategic Advantage, Fader writes,
“Customer centricity is a strategy that aligns a company’s development and delivery of its products and services with the current and future needs of a select set of customers in order to maximize their long-term financial value to the firm.”
While more companies are joining the customer-centric marketing movement, product centricity is often vilified as the downfall of organizations that have failed to modernize their operating philosophy.
Being product-led is not the same as being product-centric.
First things first. Product leadership is not the embodiment of product centricity, and customer centricity does not advocate the abandonment of product leadership. Product versus customer centricity is about the way a firm recognizes and measures value, whereas being product-led versus sales-led (or service-led or engineering-led) is about the way a firm makes decisions with that information. The best product-led organizations are customer-centric.
Product versus customer centricity is about the way a firm recognizes and measures value, whereas being product-led versus sales-led (or service-led or engineering-led) is about the way a firm makes decisions with that information.
Customer centricity takes an inherently long-term view, measuring customer lifetime value as its core metric. Similarly, the best product-led organizations are more long-term oriented than sales or marketing-led organizations, which tend to be more reactive in nature.
Customer centricity takes an inherently long-term view, measuring customer lifetime value as its core metric.
Having a keen product eye out beyond the horizon is strategically critical. While customers’ core problems (or “jobs-to-be-done”) may be slow to change, customers’ propensity to employ different solutions over time is likely to shift, especially given the pace of modern technology and contextual changes. A high-value bookworm for Amazon’s Kindle may “hire” a different product to fulfill her desire to consume content at another point in her life. Perhaps her daily routine adds a long commute, turning her on to audio-books instead. [Smart move to have both Kindle and Audible in the same product portfolio!] Over a lifetime, customers are non-stationary in their needs, and it is the customer-centric, product-led organization that is best equipped to sustain a relationship rooted in customer value.
Now, more than ever, customer value comes from a relationship that is monetized over a lifetime, a time horizon in which the customer does not stand still. Customer centricity is not an attack on product management, but a call to action being embraced by marketers that presents a transformational opportunity for product managers.
If you’re interested in learning more about customer centric marketing, you may also be interested to check out Pete Fader’s other book on the topic, The Customer Centricity Playbook, written with Sarah Toms. If you’re interested in exploring more about customer centric product management, follow me. There’s more to come.