What can the Chevy Malibu’s flop teach us about designing for customers?

June 07, 2013

We’ve certainly come a long way since Henry Ford famously stated his customers could have any color they wanted so long as it was black. Some of you may have noticed that GM recently announced it was retooling the Chevy Malibu only a year after its introduction — due to a poor reception in the market and disappointing sales. Oops. That’s going to leave a mark.

With the cost of a redesign running into the hundreds of millions — if not billions — of dollars, such a move would have previously been unthinkable. Today, it’s an indication of just how competitive the car market is and the degree to which companies are willing to go to meet the mercurial demands of a customer base with access to many alternatives.

So what lessons are we to take from this phenomenon? With escalating expectations for the perfect customer experience, it seems that companies are splitting between one of two strategies: fast and flexible versus deep immersion with the customer during the development process.

For some companies, the focus is being fast, flexible and nimble in their ability to create, deploy, adapt and refine. In his book “The Lean Startup” Eric Ries argues for the Minimum Viable Product — entering the marketplace quickly and using real-time customer feedback and rapid refinements to optimize. While this approach has obvious appeal for software, we have also seen companies making hardware and other durable goods beginning to explore this strategy. Rapid Prototoyping, 3-D printing, CAD-to-CAM strategies and seamless global supply networks have smoothed and accelerated the ability for firms to rapidly respond to customer feedback and input. Accordingly, the Internet and social media outlets have created the ability for more nimble sales and marketing efforts. With this approach companies assume they aren’t going to get it right out of the box and will use their customers to help co-create their way to a successful product.

With escalating expectations for the perfect experience, it seemscompanies are splitting between two strategies: fast and flexible versus deep immersion.

On the other end of the spectrum, companies that feel the need to “get it right” the first time are ratcheting up their efforts and methods for capturing the voice of the customer and ensuring it’s reflected in their products and services at the time they are launched. Certain products and services are still too difficult or costly to iterate in the marketplace — particularly those with large tooling or capital expenses or those with significant regulatory requirements (such as health care). Whereas some of these industries were previously R&D driven, success has often boiled down to nuanced aspects of the customer experience. Gone are the days of the perfunctory focus group before product launch. We’ve seen these companies go through more dramatic and extensive efforts to study their customers — using ethnography, observational research, formative and summative human factors studies.

Of course, neither strategy is perfect as GM’s recent debacle with the Malibu or Netflix’s failed effort to deploy Qwikster demonstrates. But in today’s hypercompetitive, consumer-driven world, one thing is for sure: Customers simply aren’t going to bother to wait around for products or services that aren’t exactly what they want. Someone else is going to give them the perfect alternative.