Striking a Sustainable Harmony of Innovation Between Customer- and Market-Driven Forces

Every organization is caught between the tug of customer-driven demands and market-driven forces. And the scary truth is that many leaders ignore one half of the equation, in favor of short-term revenue gains — to overall organizational detriment.

It is so prevalent it has become cliché: Companies typically embrace “The customer is always right” and “It costs more to acquire a new customer than to keep an existing customer” sentiments well. Yet, what if a customer does not or will not represent your overall buyer portfolio? What if the customer your organization hones in on here and now is not indicative of where the overall market is headed — or what tomorrow’s buyers will need? Is your product innovation strategy reliant on your customer’s ability to be innovative?

In other words, is it possible to be too customer-focused?

You can probably already guess the answer: Yes. Many organizations today focus solely on the customers they serve and fail to keep up with the market as a whole — and thus fail to realize sustainable revenue performance.

Should you stop listening to your customers? Absolutely not. Rather you need to carefully balance individual customer requests with a broader market point-of-view. Rethink your customer as a subset of your target market — not the inverse. And get all the closer to striking a balance of a customer- and market-driven harmony that will feed ongoing profitable growth.

The Mereo Formula to Achieving Customer- and Market-Driven Harmony

How can an organization achieve any balance, let alone the right harmonic balance, between customer-needs and market-insights?

When product managers and product marketers have been asked what it means to be customer-driven, we have received a range of responses from solving needs and pains, to listening and engaging. They were focused solely on keeping customers happy with solution enhancements. Not a bad goal.

When the same group was asked what it meant to be market-driven, their answers propelled them forward into scaling the business, growing, diversifying and differentiating solutions. These were longer-term and more-sustainable focuses. They were not dependent on a single customer group, putting one’s “eggs in a single basket.”

Customer-Driven Activities Market-Driven Activities


Bespoke Solutioning


Customize vs. Configure

Process Improvement

Customer Satisfaction



Client Point of View

Thought Leadership








Productized Offerings

Configurable vs. Customized

Competitive Intelligence

One-to-Many vs. One-to-One

Resource Optimization





Industry Engagement

Market Research

Trend Integration

Is this all to say that a market-driven strategy is best? No, not at all. Truthfully, companies can find short-term success by focusing on either a customer-driven or market-driven approach. Both approaches are valuable in and of themselves. Both can drive short-term revenues. Yet, when the other side of the equation is long ignored, risk increases and any external threats can topple successes that had been eked out. Worse yet, you can lose your edge, which can cause your products (and growth) to stagnate.

The best and most successful organizations tap into a harmony of customer- and market-driven strategy. What is this balancing act then? While it differs for each organization, the Mereo customer- and market-driven harmony formula can support your leadership in building formal product management processes to ensure both forces are holding equal attention and weight in organizational decisions and actions.

You must understand your customers as an aggregate and you must be monitoring the external forces in the market such as trends, regulations, competitors and even more unforeseen shifts such as the pandemic we are experiencing now. By marrying market, customer and sales insights with competitive intelligence and portfolio analysis, you can align these inputs against your corporate, solution, go-to-market and financial strategies in a market requirements document.  This provides guidance to your product strategy and roadmap, and can be translated further into a statement of direction that can align and direct your outbound go-to-market teams.

customer and market-driven

Applying this formula to your organization will increase the longer-term sustainability of your business and its revenue — and your employees and shareholders will join your customers in their overall satisfaction.

A Disappearing Tale of Customer- and Market-Driven Harmony

For every successful organization that upheld this harmony, there are dozens that failed to pivot and keep up with changing market dynamics: Blockbuster, Circuit City, your local taxi service, RIM (Blackberry) and Nokia.

In my personal career experience, there sits an early organizational example of market-forces gone ignored that I will never forget; it was loved by those of us who had the privilege to work there. Yet, this organization has been forgotten by many others. This is the story of CompuServe.

For those of you who do not remember — before the internet was really a thing, people went “online” through a service called CompuServe Information Service or CIS for short. CIS provided access to online communities and forums, publications, databases and entertainment. There existed no easy Google or Bing search browser. This was prior to being able to create individual online personas and/or branded digital presences. CIS was around in fact before most households had a computer, let alone knew the joys and powers of high-speed internet.

CIS served the traditional business user who was fine to be known by an obscure numbered username that started out as 70,xxx… and who was okay with paying for online access per minute or per hour. Yet, while the market was evolving and PCs were making their way into more households, web browsers like Netscape were taking shape and the growing user profile switched from businessperson to spouse and child. CIS missed this shift as it continued to deliver excellent service to its business users.

On the other side of the market, AOL focused on the future of the market and the new audiences that it would attract by building entertainment content rich in color and graphics, delivering CDs in mass mailings to homes around the world for easy installation and signup, flipping from hourly charges to unlimited monthly plans, and giving people the opportunity to be known as AOL’s pulse on market trends enabled them to rapidly surpass CIS in subscribers and value. And ultimately CIS was sold to AOL in 1997 and was slowly decommissioned over the next 12 years. The story for AOL followed a similar path decades later as the internet we know today took over.

Take the Holistic Revenue Approach

Do not let your organization lose sight of long-term, sustainable revenue performance. Embrace the harmony of a customer-driven and market-driven strategy by following the Mereo formula.


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