Customers Are Terrible Witnesses

There's an often-told story, possibly apocryphal, about an electronics company testing a new portable stereo. A focus group was asked whether they preferred it in yellow or black, and most chose yellow, which they described as fun and modern. As they left, each person was offered a free stereo to take home. Almost all of them took black.

Nobody in that room was lying. People are simply poor witnesses to their own behaviour. They report how they'd like to behave, how they'd like to be seen and what they think the person asking wants to hear. They describe their intentions rather than their habits, and they rarely volunteer the feelings that actually drive their decisions, particularly the uncomfortable ones. I think of the answer as watching the hands. What people do, choose and spend is far better evidence than what they say, and it's where Unobvious Growth tends to show up first.

Small business lending is the clearest example I know. It's a notoriously difficult market, which went from too little competition to a rush of new lenders after government intervention, and over the years I worked with several businesses trying to sell financial products to small firms. They almost all made the same mistake. They ran research with owner-operators and heard, vividly, about the emotional and practical toll that a shortage of cash could take. Some went as far as co-creating the perfect lending product with those same owners. Then, when it launched, adoption didn't come.

The reason was irrational, and it never came up in a research session. Many small business owners were following the herd, fearful of risk and deeply uncomfortable with debt. The rules they'd learned in their personal finances, that borrowing is something to avoid and being in debt is a sign that something has gone wrong, carried straight over into how they ran their businesses. What could have been sensible leverage for growth felt like shame instead. People rarely admit shame to a stranger with a notepad, so the research captured the need and completely missed the feeling that decided whether anyone would act on it.

That's the real danger of taking customers at their word. It isn't that they mislead you. It's that the most important driver of their behaviour is often the one thing they won't or can't articulate, and the better your research sessions go, the more confident you become in the wrong answer.

None of this means you should stop talking to customers. It means changing what you ask and what you trust. Ask about the last time they did something rather than how they usually do it. Ask to see what they actually did rather than hear what they'd do. Look at where people drop out of a journey, not just whether they say they like it. And wherever you can, ask for a commitment rather than an opinion, whether that's a pilot, a pre-order or a signed application. What people will give up is a much better guide to what they value than what they'll say.