When Customers Want the Wrong Thing

If you work in any business related field, you are probably familiar with the concept of “customer centricity” and “product market fit.” Nowadays, it almost becomes a necessity for business schools to teach and encourage future leaders the importance of customer centric approach (i.e. sell customers what they want and need) and its closely related concept “product-market fit” (i.e. a product that meets the market needs). However, although “giving people what they want” seems to be a clever win-win business strategy, it is not always so. In some occasions, giving customers what they want is not the right thing to do; instead, not meeting their needs is better for them, according to the spirit of true customer centricity.

When Customers Want the Wrong Thing

Yes, giving what customers want indeed pleases customers, but it doesn’t mean that we should go ahead and please them all the time. People are by nature double standard and self-contradicting in some way, so their needs sometimes can be unethical, vulgar, or contradictory. When this is the case, we may have to step back and refuse to meet this market need for monetary gains. Below are some examples.

Both slavery and child labor are considered unethical and are forbidden today, but they were created by businessmen to meet a market need: cheap labor. There was a “product-market fit” – the product being slaves and child labor, and the market being the people who demanded cheap labor for factor production. Nevertheless, although these practices were successful business models in the past, we would obviously not implement those in modern society for ethical reasons.

Let’s looks at education. It’s obvious that many students do not like homework, exams, and even schools, but facing this popular desire, no schools are established to offer education without examination and homework. Why? The reason is that appropriate amount of work and examination is indeed beneficial for students’ academic performance, so even though we are aware of the market need for “easy schools,” we won’t satisfy it for the people’s intellectual well-being. Actually, the latter approach embodies the true spirit of “customer centricity” – we are not doing it to help them; otherwise, although we give them what they want, it’s hurting them in a long run.

Other potential debatable and controversial “product-market fit” examples include but not limited to: genetic editing, abortion, trading of customer information (for marketing) v.s. privacy, risky financial transactions (e.g. unregulated lending of funds that caused 2008 subprime mortgage crisis), etc. There are many. You get the idea.

Unhealthy Market Need: Chinese Entertainment Industry

Both Chinese entertainment and news/media industries are often criticized for the serious problem of “unhealthily meeting the market need.” In China, film and tv-show producers are obsessed in producing low-cost, vulgarly humored comedy content. These productions are overloaded with jokes for the sake of making people laugh, lacking any literary or artistic value. As a result, the younger generation grows up watching these cheap-comedies, and this lack of high-quality content thus contributes to millennials’ mental and literary/artistic immaturity. This deteriorated taste of entertainment encourages new film producers to produce and feed people more of these cheap contents, creating a dead infinite cycle. Similarly, Chinese news medias often seek monetary gains by either reporting false news to meet the government’s propaganda purpose, or selectively reporting news that are misleading in order to create social chaos/debates (so people buy their news to get involved and know more). As we can see, when product-market fit strategy is taken unsupervised, unhealthy markets are created.

Unintended Consequences

Inappropriate “product-market fit” can both discourage real economic growth and bring many social problems. Harvard Business Professor Clayton Christensen discussed this problem in the capital market by studying the finance industry. He argues that the need for “quick, low-risk, and high-cash-flow-return” investment in the capital market discourages real growth from disruptive innovations, because investors consider these startups highly risky and time-demanding for convincing results. As a result, this dilemma constrains both the diversity and quantity of business activities and jobs. You can read more about it in his book “the Innovator’s Dilemma.” The misuse of “product-market fit” also raises moral questions for policy/regulation making; for example, the moral challenge between business-backed election funding and certain businesses’ preferred policies. Michael Sandel’s book “What Money Can't Buy: The Moral Limits of Markets” talks about similar interesting questions such as “should we pay children to read books or to get good grades? Should we put a price on human life to decide how much pollution to allow?” To learn more, I recommend reading both of these books.

By writing this post, I want to encourage more debates and discussions. What kind of products we should or should not produce, even in the presence of a market need? What should our constraints and limits be? Besides meeting a market need, how should we encourage more businesses to create a good market need, which improves people’s lives? Feel free to like this post and comment below.

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Gan Tu writes as a millennial voice on entrepreneurship, strategic business plan, artificial intelligence, digital design, lifestyle, education, millennials, thought leadership, and academia. Gan is a student at UC Berkeley with a double major in Business Administration and Computer Science.

Enjoy the piece? Follow Gan on Twitter, LinkedIn, GitHub, and personal website. Like what you read? Share, like, and comment. All opinions expressed are my own and they do not reflect the opinions of any of my current organizations. Have a question? Email me at [email protected]

This post is part of the @MillennialIdeas series from the Marketing Thought Leadership course at UC Berkeley taught by Forbes 30 Under 30 and LinkedIn Top Voice, Tai Tran.

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