Sara Sweat, MA – Founder & CEO, Mindshift Advisors
On June 1, 1999, two friends released a piece of software they’d created to solve a small and boring problem. MP3 files were too hard to find on the internet. This program made it easy. The company was named after a nickname one of its founders had as a kid; Napster.
By February 2001, Napster had 26.4 million verified users – the size of a small nation.
But, the Recording Industry Association of America didn’t like the idea of people downloading music – especially when it was just the songs they liked. At the time, the whole industry was album based.
Their pricing structure, royalty payments, and profit sharing were built on the album based consumption model of music. They created and promoted albums. And, they had developed relationships with the retailers who stocked the latest albums for consumers with every new album release.
The system was not designed for this. Not to mention, all the music being shared on Napster’s site was copyrighted. It was owned by the labels and artists themselves. So, the RIAA sued Napster for copyright infringement and won.
A federal judge ordered Napster to remove the copyrighted material. Napster couldn’t comply, the service went dark, and the company filed for bankruptcy in 2002.
But, the music industry didn’t stop there. Between 2003 and 2008, the RIAA sued roughly 35,000 individual people for sharing songs. Nearly all of them settled, for about $3,500 a head. The legal fees to exact these penalties ran higher than the settlements collected, but the industry called it a victory.
They won every case, every injunction, every headline.
Nobody Filled Out a Survey
Not one of the 26.4 million Napster users ever wrote a letter to Sony or BMG explaining what they wanted. Honestly, if they’d been asked, they probably couldn’t have articulated it.
But their behavior painted a very clear picture of demand.
Consumers wanted one song, not fourteen. They wanted it now, not on Saturday at the mall. They wanted a searchable catalog bigger than any store could stock and they wanted to carry it with them.
They were willing to accept terrible audio quality, mislabeled tracks, and a forty-minute download time to get those things.
On April 28, 2003, Apple opened the iTunes Music Store. Two hundred thousand songs, ninety-nine cents each, any single you wanted, no album required. A million songs sold the first week. Ten million in four months.
Apple wasn’t even a music company. They were tech. But, while the music industry was busy turning their customer base into defendants, Apple read their behavior as a request – as consumer demand.
And the rest, as they say, is history.
Watch The Feet
In my work with startups, I see similar dynamics play out all the time. We see a market need, observe, investigate, test, & design. We build a big, beautiful thing that solves a real problem, and let consumers know about it. Then, we pat ourselves on the back for the value we’ve created.
At least, until utilization dips below our expectations. By then, we’re really attached to what we’ve built.
So, we try creative ways of “driving customer adoption”. We train them, we offer more incentives, we position and reposition the value of what we’ve created in an attempt to convince our customers to use it the way it was designed.
We survey our clients to understand the barriers to adoption and utilization. We may even host forums where they can share their complaints and desires. We shift engagement strategies or revisit our product roadmap to address the handful of questions we thought to ask.
But, it never works. Not long term, anyway.
Because we’re approaching the whole problem from a legacy view that’s tied to how we’ve done it before. We’re asking questions that assume our value is constant & customer behavior is what needs to change.
We need a new lens through which we interpret market demand. We need to eradicate the noise and look at the whole problem differently.
What your customer says is data. What your customer does is signal.
So, instead, watch the feet.
Your Customers Are Using It Wrong
There are real psychological barriers to doing this. When we know what we’ve built and why, customer utilization that operates outside our expectations, registers as a misunderstanding to be corrected.
We’re trying to do the right thing. To bring our poor, confused, little customer back into the fold. To help them understand why what they’re doing operates against their interests. And, it’s entirely possible it does. But, that’s not the point.
When we see the same behavior repeating, at scale, in a pattern, week after week, it’s not telling us what our customers don’t understand. It’s telling us where what they value – actually is.
You already have your own little Napster hiding right there inside your product or go to market strategy.
Maybe your customers export your data into a spreadsheet the minute they log out of your system and rebuild their own dashboard by hand. Maybe they keep getting a question your reporting doesn’t answer & feel stupid in every meeting where it gets brought up.
Maybe they skip your onboarding, ignore the feature you spent two quarters building, and keep using same old solution in a way you never designed. Perhaps they bought the enterprise version of your software and only use eleven percent of it every week.
You know this behavior is a risk. You know those clients don’t renew. But, if you’re anything like most companies, your response follows the same predictable pattern as a record label in 1999.
You write a policy. You build a guardrail. You gate the workaround & try to stop the unwanted customer behavior. You offer a free training on your new feature that’s supposed to fix all of this. You sit in rooms with very smart people who say “we need to educate the market” while everyone nods.
You think it’s all a sign that your customer is using your solution wrong. But, it’s not. It’s a signal you’re not creating enough value to earn authentic customer demand.
Interpreting Is The Whole Job
Customer behavior tells you where something is off. It doesn’t tell you what it is or what to do about it. It’s evidence – evidence you need to interpret and understand.
So, how do we decipher the behavior we’re seeing in a way that helps get us closer to what our customers actually want?
- Notice without judgment. Keep a running list of the things your customers do that you wish they wouldn’t. Quantify them. You can’t chase all the aberrance but you’re looking for the patterns. The repeating modifications or underutilizations that replicate with predictability.
- Identify the incentive. For each item on that list ask one question. What are my customers getting out of this? What is their behavior showing me they need? What are they willing to do, even when it’s painful & what do they get when they do it?
- Examine the evidence. You need a regular cadence with your leadership team – focused not on altering the customer behavior, but understanding it. Treat it like a weekly customer survey built on observation rather than reports.
- Design for outcomes, not compliance. Instead of trying to adjust the customer, assume radical responsibility for the only thing you really have control over anyway – yourself. Focus on value creation of the behavior based demands you see – and you won’t have to “drive adoption” ever again.
This simple process is the cheapest strategic advantage you could possibly have. To value your customer so much that you continuously review the value they’re getting from your partnership? That’s rare. And, it breeds the kind of customer loyalty that people line up around the street for.
Customer Loyalty
The companies who get this right are the ones you can’t imagine your life without. The ones so embedded into what creates value for you, that you’ve shifted your own life around them.
Imagine a Saturday morning without a Costco run, a weekly commute without your Starbucks, or a world where an illuminated hot sign at a Krispy Kreme doesn’t mean you pull off the interstate for a tasty treat.
Twitter didn’t invent the @ reply, the retweet, or the hashtag and then tell customers how to use them. They watched what customers were doing on their own, endorsed it, and made it easier to do.
Customer loyalty doesn’t come from being told what you should want. It’s created when what we didn’t even realize we needed is delivered on a silver platter to our feet.
So, the next time you hear someone talking about building customer demand – stop talking. And, listen.
Let your customer’s behavior be your guide. You might just stumble upon your best idea yet…without ever spending a dime.
Mindshift Advisors is consulting for the psychology of business. We help founders read what their customers and their teams are actually telling them, and build the culture and process to act on it.
If your customers are doing something you keep trying to stop, let’s figure out what they might be asking for instead. Book a free consultation at mindshiftadvisors.com.
