Dr. Russell F. Henke -- Business Consultant
Case #7 -- Listen To Your Customers!
A mature software package vendor with flattening revenues seeks new products and/or services directions to bolster its growth prospects for the future. Youthful internal entrepreneurs step forward with many new ideas as part of a newly-initiated business unit planning process. Many of the new ideas are technically feasible and appear to have attractive market niches, but the new ideas are far too numerous to be funded en masse.
Among other programs initiated to answer this dilemma, the consultant wonders whether the mature software vendor would have the external identity or recognition credibility in the selected market niches to be successful, even if the proposed new products work well and are correctly introduced. The consultant recommends that a Customer Survey be carried out prior to investment in these new ideas and he sub-contracts the survey to a 3rd party associate skilled in this specialty.
The Customer Survey results reveal significant market biases and prospective customer awareness deficits, for virtually every new idea save one.
Accordingly, the software vendor decides against investing in these new areas, saving hundreds of thousands of dollars and future disappointments. Rather, the vendor focuses its product development dollars on immediate vertical segment product enhancements which prove to be far more palatable to its past market penetrations.
The one new idea that looks promising is banked until a better market window opens; it later becomes the successful e-commerce arm of the parent business!
