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Why Companies Shouldn't Listen to Customers

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Conventional business wisdom dictates that the customer is always right. But sometimes, companies may be able to grow more explosively by ignoring the people they serve.

True, listening to customers has obvious benefits. Their feedback can help you improve your product or service; automakers continually gather thoughts from existing and potential customers on everything from fuel economy to seat materials. That's how Ford (NYSE: F  ) found out that truck aficionados wanted leather seats in their pickups. Starbucks (Nasdaq: SBUX  ) , hearing from customers that its drink preparation process seemed impersonal and factorylike, has slowed things down.

In the social media era, it's especially valuable to pay attention to what your customers are saying, since negativity can spread quickly. United Airlines (now United Continental Holdings (NYSE: UAL  ) ) learned this when it damaged the guitars of musician Dave Carroll. After futile attempts to get reparation from the airline, he loaded a "United Breaks Guitars" song onto YouTube that has since been viewed more than 9 million times.

For explosive growth ...
However, you won't always gain the greatest success by giving customers exactly what they say they want. Henry Ford reportedly quipped , "If I had asked my customers what they wanted, they would have told me -- a faster horse."

It's nice that Apple (Nasdaq: AAPL  ) is including the much-requested ability to multitask in the upcoming version of the iPad. But its real game-changing, money-stream-inventing innovation was the iPad itself. No one was clamoring for such a device, but Apple made millions of people realize how much they needed it. (The same goes for its iPod.) As Steve Jobs has explained: "We do no market research. We don't hire consultants."

Other companies that have reaped great rewards by developing out-of-the-box products or industries include Sony (NYSE: SNE  ) , with its famous and only recently retired Walkman. Not all new ideas achieve immediate success, though.

Credit cards have been around for many decades, with Bank of America (NYSE: BAC  ) one of their earliest developers. (Visa (NYSE: V  ) traces its history to the BankAmericard.) It took a long time for retailers and others to accept them, but now most consumers really don't leave home without some plastic payment card. No company should grow complacent -- even Bank of America's and Visa's credit card businesses may be threatened if smartphones start being used for payments, cutting credit cards out of the process.

Listen, then do your own thing
The most successful companies take the time to listen to (or at least understand) their customers and potential customers -- but they also look far beyond immediate requests to imagine what else might be possible. Many of the most successful and dominant companies boast great traditions of innovation. 

For more great stock ideas, check out our free report, 5 Stocks the Motley Fool Owns ... and You Should, Too.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Longtime Fool contributor Selena Maranjian owns shares of Apple and Starbucks. Apple, Ford Motor, and Starbucks are Motley Fool Stock Advisor recommendations. The Fool owns shares of Apple and Bank of America. Try any of our investing newsletter services free for 30 days. The Motley Fool is Fools writing for Fools.


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Selena Maranjian
TMFSelena

Selena Maranjian has been writing for the Fool since 1996 and covers basic investing and personal finance topics. She also prepares the Fool's syndicated newspaper column and has written or co-written a number of Fool books. For more financial and non-financial fare (as well as silly things), follow her on Twitter...

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