It always amazes me how many companies ignore customers while they develop a product.  If it's a brand new product, they often don't talk to customers until sales fail to appear, and the team is under pressure to figure out what's wrong.  What seem to be brilliant ideas to the development team, often don't solve any real world problems for customers.  Witness some of the current group of refrigerators with a built-in screen and internet browser.  Technology for it's own sake without a clue about solving a problem.  In our industry, look at the number of analog cameras with motion detection but no alarm output.   Nice technology, but no real world use.

If it's an update to an existing product, the development priorities seem to often be driven by the features the sales force reported as the cause of the last lost project.  Worse, the list is often features required by one major customer.  At least they are listening with customers, you say?  Yes, but they are often the wrong customers.  Loss reports are a notorious source of bad information.  The desires of customers with one major project almost always have no value to the rest of the market.

So what's the right answer?  Talking to customers is the cliche answer, but often doesn't directly help.  (Henry Ford was once quoted about building the Model T "If I'd asked my customers what they wanted, they'd have said a faster horse").  The real answer is to understand your customers problems better than they do; that takes effort, time, and focus, but the result is product features that make a difference.  OK, you may not develop the next iPod, but when your competition is doing "me too" development, solving real customer problems is a great way to grow your business.