Why Overshooting Customers’ Needs Turns Your Competitive Edge into a Commodity

A well-known electronics maker spends millions refining every feature on its flagship smartphone. Year after year, engineers add power, storage, and tricky new tools. Initially, customers are impressed and sales skyrocket. But now, salespeople return from the field groaning that buyers glare at new releases, asking, “Why should I care? My last phone still works perfectly.” Revenue stalls, and margins shrink as competitors introduce barebones, 'good enough' alternatives at lower prices and with faster delivery.

The head of product realizes that more features won’t bring back growth. When they visit stores, they overhear teens and parents alike explaining that it’s now all about quick delivery and the ability to swap accessories. The frenzy to be 'the absolute best' had led the company to overshoot what average users needed. Their edge—their performance obsession—becomes their downfall, as the market quietly redefines value.

The rival’s modular, no-frills models enable quick customizations and suit each buyer’s tastes. While they may not win on pure specs, they speed up production, deliver new colorways every month, and scoop up market share. The once-dominant firm sees its competitive edge melt into commodity status, a pattern that’s been repeated across industries where product performance outpaced customer demand.

Behaviorally, this is a classic case of diminishing marginal utility and the latent switch in the 'basis of competition.' Market leaders who miss that shift become ripe for disruption by new entrants who sell the right kind of 'better.'

Take the time to talk to your customers, really listen, and ask which product features matter versus which they ignore or find overwhelming. Watch your numbers—if you notice shrinking margins and growing pushback on why anyone should upgrade, pause before adding another shiny enhancement. Instead, explore how you can make your offerings easier to use, faster to get, or more personalized in the ways that truly count. Don’t wait until others have captured that value—start planning your pivot from 'better' to 'more convenient' while you’re still ahead.