AFTER $14 MILLION dollars and four years, our customers don't want to buy what we have? What a depressing statement from a VP of Sales. How many times can you afford to have a new product fail in the marketplace? How many customers can you afford to lose because you don't meet their needs?

Shortest time to market no longer cuts it, nor does lowest cost. And excellent customer service is now expected. As the old rules for achieving competitive advantage fade away, what can you do to secure customers and vanquish competitors?

The only true, sustainable competitive advantage is an intimate understanding of customer needs. You can develop such "clear customer insight" in many ways and use it to win profits and the loyalty of "savvy" customers.

Learn About Your Customers

Often, we attempt to understand our customers by employing approximations of customer needs and wants, such as third-party market research, anecdotal evidence from sales or service organizations, competitive activities, website tracking, and, worse, our own opinions. We need to go directly to the source, gathering real, direct customer insight that's accurate, current, and meaningful, and upon which we can bet our businesses.

Not every customer has something to offer. The 80/20 rule applies here: select the most valuable 20 percent of your customers according to an accepted metric such as strategic fit, gross revenue, gross margin, cost to support, or frequency of purchase, and cultivate long-term, two-way relationships with them. Ask them to share with you their candid opinions. Go visit them and observe the use of your product or service in actual environments.

While customers are critical to learn from, prospects may be even more valuable. In many cases, customers keep doing what they've always done, and are poor predictors of new technologies or other marketplace shifts. But prospects are not already infatuated with you or your current products, and will communicate more realistic views of the changing marketplace. So listen to prospects as well as customers.

Information to Gather

What information needs to be gathered to obtain clear customer insight?

*Working environment* Ask, "What is the environment that our customers are working in?" "Who is using the product vs. who is the buyer?" Understanding the environment may provide clues as to how your products are used and how their use could be improved, there by increasing the value to customers. You need to know how customers are or would be using your product or service.

Ideally, you should go directly to your customer site and watch the product or service being used. In this way, you can gather information that may not be evident as someone describes their environment and can't be uncovered using surveys or other impersonal means.

*New opportunities* The greatest value in gathering firsthand customer insight may be the ability to uncover new opportunities, either for new applications of existing products or for new products. During direct customer interviews, you can uncover latent needs that customers may not even know they have. Frequently, your company will be uniquely capable of addressing these needs.

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