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The User-Demand Fallacy
Many companies take great pride in declaring they are customer-driven, always listening to customers’ concerns and demands, and striving to improve their offering to meet such needs.
While, in many cases, this stance is motivated by a commendable effort to fulfill the needs of their customer base, it rests on the idea that every customer — including prospective ones — will ever express every need, in other words, that the feedback loop is optimal.
Suppose a competing product or service readily has a feature or trait that your current offering lacks. In that case, users interested in that particular aspect may turn to your competition without ever making a demand to you. You may wrongly conclude there is no demand for the feature and concentrate on other things while unknowingly bleeding customers to your competitors.
Short of performing extensive market research, there is no way to tell if the lack of demand means there is genuinely little general interest for the feature or if most interested customers wrote your offering off and went somewhere else already.
In many cases, the feedback you get comes from the remaining customers — those who don’t need the feature — reinforcing the idea there is little demand for it.
This is an instance of the survivor bias, where decisions are taken based on strongly biased information only coming from a small, self-selecting subset of the potential user base, far from representing the entire landscape.
Together with doing competitive analysis based on feature gaps and prioritize actions based on whatever user feedback is at your disposal, it might also be worth asking why your competitors even exist. At all?
From there, make a sober assessment of what they do that you don’t, then consider what you can do to bridge the gap without relying too much on feedback data that may not be relevant due to its inherently biased nature!
Let me know in the responses below if you experienced this, either as a customer who simply looked somewhere else, or as a company or service provider who experienced — and hopefully survived — that situation.
