Last week I asked whether it is employees or customers who are more important to an organisation. If you missed it read “Customers Care About a Product’s Value, Not How the Company Treats Employees” now and catch up.
I knew it would be a provocative question but I still didn’t expect quite so many comments! So this week I decided to be just as provocative and talk about the issues that challenge many businesses. And where the answer to whatever problem they have is actually quite simple. For me, customers are the answer! They can either answer or help you overcome any challenge or issue you may have. Read on and then let me know if you agree.
How can I innovate more successfully?
According to an excellent article by Harvard Professor Dr Srini Pillay “Humans have anatural aversionto innovation because it involves a healthy dose of uncertainty and risk.”
Unfortunately, we try to reduce this risk by referencing past events to help us to predict the probability of our future success. Dr Pillay concludes that possibilities rather than probabilities are more likely to lead to better results.
I would concur with this statement, as the world is changing too fast to rely on past events as a predictor of anything in the future. This is why I say that customers are the answer!
It is only by getting closer to our customers and being constantly curious, that we have any chance of increasing our success in satisfying them.
It therefore makes sense that we involve our customers in helping us innovate. Not as a judge of concepts, which is what many businesses do. This is wrong because we know that consumers don’t know what they want, at least not until they see it.
However, they do know what their pains are; what is wrong with a product or service and what they would rather have. Co-creation and in fact ongoing conversations with our customers is the only way to stay ahead of the game.
They conclude that it takes many skills and cultural changes for most organisations to become more innovative. These include:
Audacity and grit: The determination to continue despite failure. And I would add the acceptance of failure and the license for employees to fail too.
Strong leadership and true collaboration:An inspiring vision and the tenacity to make it happen – together.
Give employees autonomy. We all need meaningful work. The chance of helping an organisation grow is what motivates top employees. That and the freedom to make decisions based on clear goals but without directive processes on how to meet these objectives.
Build platforms, not products. This may be the hardest for many organisations to grasp. Giving your customers the opportunity to decide what and how they use what you produce, and how it should be changed is the route to success. Networks and co-creation are the future that is already here. And customers are the answer!
Think like engineers and customers.Everyone in an organisation should be encouraged to look at problems from the customer’s perspective. It always amazes me how we seem to “take off our consumer hat” when we arrive at our place of work!
Know that money only gets you so far. Innovation has a much shorter shelf-life than it used to. In fact, best-in-class organisations have a continuous process ingrained in their culture.
Get acquisitions right. Many companies are looking for acquisitions for a way to quick-start their innovation. But it is difficult to get the timing right. The current value is good but potential growth is better.
The article concludes with an interesting comment that it is “leadership in business model innovation that offers the deepest and most transformational insights.” I would add it’s our customers too!
You’re measuring your sales and hopefully the trend is upwards. You’re following your distribution and hopefully it’s expanding. You’re calculating your profits and hopefully those are also rising. What else are you doing to follow your brand?
You would be amazed at just how many brand managers stop there! Even those in major CPG companies! It’s not enough. You know nothing about your customers! Your forecasts are based on outdated information from the past. (and if you didn’t skip to this point but read the previous one, you know why that’s insufficient)
The health of your brand and a good estimate of at least its short-term future comes from your work with customers. From brand image and equity, to co-creation and observation, your customers are the answer.
There is an additional bonus in following your brand image and that is that it acts as an early-warning signal. This is because it almost always starts to decline before your sales do!
The reason for this is that we are creatures of habit, retailers included. Change is difficult as a decision has to be made. So we tend to continue with the same products and services until something important happens. Important in the eye of the customer that is.
It may be a new brand introduction, a price promotion, bad publicity or negative comments on social media. If these are important enough to customers then they may decide to change brands. And if this impacts a lot of customers, the sales decline can be fast and significant.
Better therefore to follow your image as well as comments on social media.
Social media platforms can provide a wealth of information about your brand. Of course, different people adopt different platforms for different uses. Pew Research ran a useful analysis in their Social Media Update 2016 of the demographic similarities and differences of channels in the US. It is definitely worth a read to understand these differences, as well as to identify the best platforms for your own brands.
The sort of information that can be gathered from social media includes:
Natural vocabulary used by your customers.
Issues customers have with products and services, often in real time.
Trending topics of interest; use trend alerts rather than the keyword tool from Google, which is slower to update.
Regional or country differences from topic frequencies.
Observation and listening in person can provide extra benefits that social media can’t. The two information sources are thus complementary. In fact, I would consider them to be the best way to identify brand issues, long before running any market research surveys. For more on best practices in customer closeness sessions, check out “Five Rules of Observation and Why it’s Hard to Do Effectively.”
As you know there are basically only three ways to grow your business:
Get more customers to buy.
Get customers to buy more.
Get customers to buy more frequently
You will see that all three ways involve the customer; of course, they do! As you know, one of my favourite quotes says “There may be customers without brands, but there are no brands without customers.” If you still haven’t understood the message, your customers are the answer to everything!
Just think about that for a moment, please. A simple but profound statement, don’t you think? Therefore, your customer is the solution to your business growth and profitability.
Speaking of which, sometimes a business is growing but has done so by slashing prices and being on constant promotion. This doesn’t grow your brand, it demolishes it! Both its value and reputation! Read more about this and head the warning in “Are you on the Way to Brand Heaven or Hell?”
A far better way to grow more profitably is to understand the value that you offer to your customers. This is done through a PSM (price sensitivity measurement), a price trade-off study (BPTO) or similar survey. These will provide you with the information you need to understand your customers’ perception of your value. Whether your price is too high or too low, you’re leaving money on the table and could be more profitable.
Why is market research not enough to understand my customers?
There are so many reasons why running market research is insufficient to really know and understand your customers and your business. I don’t know where to start, but here are a few reasons I’ve come up with (please add your own in the comments box below):
Projects are sample based.
They are at best snapshots of current opinions and behaviours.
The information can quickly become outdated.
They ask questions.
They have limited focus.
People don’t tell the truth.
People don’t know why they do what they do.
Results are extrapolated.
Results are open to interpretation.
I could go on and on with this list – and again feel free to add further ideas in the comments below – but you get the idea.
Now don’t get me wrong; I’m a big fan of market research. BUT done by experts. Unfortunately, with the ease of connecting with people online and the simple survey platforms offered for free, it is easy for anyone to run a research project today.
It’s great that people see the benefit of surveys, but as this subtitle mentions, it’s not enough for truly knowing and understanding your customers. Also, if the reasons I gave above are not enough, there’s something else!
The biggest issue from my perspective is that understanding takes far more information than any single market research project can provide. Yes, it may deliver certain answers to a finite number of questions, but to understand your customer you need to get intimate.
There are many organisations that understand the importance of the customer and yet still hesitate to start walking the talk of customer centricity. If you’re one of them, then here are a few statistics that should convince you – and your bosses – of their importance:
Customer centric organisations are 60% more profitable. (Source)
The average revenue growth of Customer Experience Leaders is 14% points higher than that of the laggards. (Source)
64% of people think that customer experience is more important than price in their choice of brand. (Source)
I don’t think anyone can read those numbers and not be excited by the potential for growth. So what are you waiting for?
As you see, our customers can provide many if not all the answers to almost any question we may have about our businesses. After all, we are in business to make a difference to our customers lives in one way or another. So it is surprising that we still go looking for our answers elsewhere.
If I haven’t highlighted your main business challenge for 2017, then please add a comment below. I’m sure the customer will still be the answer – but prove me wrong!
If you’re ready to adopt a Customer First Strategy, book a free half-hour advisory session with me directly in my calendar, so we can go through your priorities and discuss solutions.
If you prefer to listen to the PODCAST of this post, click HERE. Don’t forget to subscribe on iTunes too!
As you know, I am a global customer centricity champion. My passion is helping organisations to grow faster by putting customers at the heart of their business. One of the most frequent requests I get is to help in improving ideation and innovation.
This is by far the most common area that my clients struggle with. Is it a challenge for you too?
Many companies create great new products and services – from their perspective – but they fail! They then ask if I can help them to identify to whom they should be selling. Of course, I do help them, but I also suggest that next time it would be better if they called me before they started innovating! In a failure situation, it is almost always due to an outdated innovation process in which the customer has not been involved.
I know it can be difficult to innovate in this new age of technology, but it remains vital for growth. This is why I was recently invited to run two workshops on improving ideation and innovation, as well as to speak about it at three different universities in Beijing and Shanghai.
China is an Innovation Hot-House
China joined the top 25 most innovative countries in the WIPO global innovation index for the first time this year. This is because they no longer rely on cost-effective manufacturing alone. They also applied for more patents than the next two countries, the United States and Japan, combined! This clearly shows that China is improving ideation as well as their innovation. But they know they must do even more. To become a truly competitive nation, they have to better understand their customers, especially their growing middle and higher-income residents, who continue to prefer primarily imported Western brands.
Let me share with you a few of the ideas that I spoke about during my visit. They may just save you too from more costly failures.
Innovation is Essential
Switzerland continues to lead the world in innovation according to the latest WIPO GII study. It was, therefore, a privilege for me to by invited to help China corporations and academics by proposing a new way to innovate.
Most companies innovate from a technical and skills-based foundation. It doesn’t usually work very well, if at all. In fact, according to Nielsen, IRI, Fortune and many others, it is estimated that between 85% and 95% of new consumer products in the US fail. In Europe, it’s just as bad, with only 25% of new consumer products still on the shelf just twelve months after launch! And less than half that number by the end of the second year.
With such disastrous results, you might wonder why companies continue to innovate. Well there are three main reasons why they do:
It keeps brands fresh. Brands which innovate have something new to share with current and potential clients. We have come to expect it. What excites today, is normal tomorrow and then just boring after that. We have gotten accustomed to regular updates and constant new choices.
It encourages switching. If brands and options remain the same, people would only switch if they became dissatisfied and the cost of switching was low. Since product performances are so similar in many categories today, new variants and offers suggest differentiation. The brand appears more vibrant and people like that.
It revives brands through excitement and buzz. In today’s connected world, this is vital. People learn about brands as much from friends and family as through advertising. And they trust the former more than the latter, even if some of these “friends” are virtual ones they’ve never met. According to Nielsen’s report ” Global Trust in Advertising” more than eight-in-10 global respondents (83%) say they trust the recommendations of friends and family, and two-thirds (66%) others’ opinions posted online.
Renovate your Innovation Process
It still surprises me that companies continue to use their same innovation process when their failure rate is so high. It often looks something like the diagram on the right. Is that what yours looks like? In fact, is your process a funnel? If so, then you are facing at least two problems:
1. That it is a funnel. This process is linear, with a beginning and an end. It assumes that there is only one “winner” from all the ideation and brainstorming. And it also supposes that only one concept developed from that “winning” idea will succeed.
But what if all your ideas are great? You would be throwing away all but one of them! Or suppose that they are all “losers” and you launch the least “awful” amongst them? There must be a better way, no?
Even IDEO’s iterative process still assumes “winners”, because they quickly move from brainstorming to prototyping and testing with customers. At least they do suggest co-creating with customers which is a positive element of their process and it is great fun to do – from my own experiences.
2. That it doesn’t include the customer. How can you have any chance of innovating for your customers if you don’t include them? You are relying on your own perspective to make choices. Are you the typical consumer for whom you are innovating? Probably not. In which case, why are you taking decisions based on your opinion? It’s pretty irrelevant!
The second diagram on the right is the type of NPD process that I encourage my clients to use. It is, of course, adapted to their specific needs, based upon their current process. By doing this, it makes adoption of the new process much easier, by quickly getting everyone to support the needed changes.
The major difference from most current innovation processes is that it is a virtuous circle. It starts and ends with opportunity identification, in other words with the customer and insight. This, of course, means that we must know and understand our customers deeply.
Know your Target Audience Intimately
We all think we know our customers, but this is often not totally true. Not deeply enough anyway. One of the quickest roads to improving ideation and innovation is to know for whom you are innovating. (>>Tweet this<<)
The first thing I ask my clients to complete is the 4W™ Template of the “who”, “what”, where” and “why” of their target audience. Often times they struggle with the last “w”. If you want to try it yourself, check our post “How well do you know your customers?”
Even with the template filled, you still have to go further. Optimal understanding comes from regular connection. Our customers are changing – fast, so we need to keep our finger on the pulse of the market. Yesterday’s information is no use to manage today’s brands or innovate for tomorrow.
During my talk at Shanghai’s ECUST, someone asked how we can be better prepared for the future. I loved the question, as it enabled me to speak about another of my passions, that of scenario planning.
Change happens, and especially rapidly in China. My recommendation to the student was to not rely on trends alone. They are uncompetitive. To gain an advantage over the competition, you need to develop them into plausible future scenarios. If you are interested in learning more, then do check out our post “10 Steps & 5 Success Factors to Ensure your Business is Ready for Anything“.
Knowing why your customers do what they do, buy what they buy and consume what they consume, and then watching and listening to them, will put you in the best possible position for improving ideation and innovation. But there’s still more you can do.
Increase your External Partnerships
As mentioned above, many companies still rely on their own technology and skills to innovate. However, while technologycan certainly help deliver improved benefits, it is unusual to be sufficient. In many areas, companies need to collaborate with others who are more specialised in certain areas.
Joint ventures and partnerships are useful for developing new products and services more quickly. You don’t need to build the needed skills internally and you can rely on the immediate support of external experts. Whether you team up with another corporation or a university is up to you, as long as you recognise the support you need. If you rely totally on your internal knowledge for improving ideation and innovation, you are unlikely to find those breakthrough ideas most companies are searching for.
Procter & Gamble and >Teva Pharmaceutical Industries announced the creation of a joint venture in consumer healthcare in 2011. The newly named PGT Healthcare partnership with president Tom Finn has since negotiated tens of JV’s, partnerships and strategic alliances.
Expand your Business Model
Another external lever from which more and more companies are benefitting today is a change in their business model. Take the food industry. It is moving more into health and wellness and could become a direct competitor to the pharmaceutical industry as it develops more nutraceuticals.
Pharma, on the other hand, is moving from sickness to wellness, from treatments to prevention.
Or how about Google moving into cars, solar panels and most recently travel with its Trips App? Through the analysis of their customers’ searches, Google can identify those of us who are looking to travel, those interested in buying a new car or in using taxi services. Google knows more about us today than we know ourselves. And that is both exciting and frightening.
Work with Emotional Benefits, not just Functional Ones
Companies which succeed at innovation know that it is the emotional benefits of their product or service that matters, often more so than the functional ones. (>>Tweet this<<)
Apple used to be a great innovator. In the past few years, I feel they have been relying too much on their technical expertise. The recent launch of the iPhone 7 and the new Mac Book Pro were both less successful than their previous launches. While neither are true flops, they failed to ignite excitement in their potential customers.
There have been numerous posts on why Apple is failing at innovating today. One article in the HBR by Steve Blank stated that both Steve Jobs and Bill Gates “… suggested execution executives as their successors. They confused world-class execution with the passion for product and customers, and market insight. Yet history has shown us that these two talents are not the same. For long-term survival in markets that change rapidly, one is far more important than the other.”
Another article in Business Insider by Julie Bort concludes by saying “Microsoft is now officially more innovative than Apple” based upon Tweets of the events. But Microsoft too failed when Bill Gates handed the company leadership over to Steve Ballmer. For 14 years Ballmer successfully ran the business from a financial perspective. He tripled sales and doubled profits. But he didn’t set the company up for long-term survival. In early 2014, Satya Nadella took over and made some radical changes which focused the company on mobile and the cloud (Azure). This freed Microsoft to become more innovative again and the result is already showing.
You can never go wrong if you start from your customers’ perspective and connect emotionally with them. (>>Tweet this<<)
Develop Insight as a Company; Don’t Leave it to Market Research Alone
Some managersthink that insight is just another word for market research. They’re wrong, but perhaps you too see it in this way?
Market research is a great source of information, but for insight, you have to integrate multiple sources of information. It is rare for a single project to provide a deep insight. This comes from truly understanding the customer and that takes time. It takes data and information, turned into knowledge and then understanding.
Knowing is also insufficient unless you understand what it all means to the customer.
The full development process, such as the example given on the right, takes time and people, ideally with differing perspectives. It takes a detailed understanding of the target audience, their needs and desires so that you can resonate emotionally with them.
Many organisations work with humantruths to help in identifying a concept that will resonate emotionally. These are usually based on basic human needs, which cut across cultures. This makes them particularly useful for regional and global brands.
During my different talks, I gave many examples, but one which my audiences found particularly fascinating was the insight both Unilever’s Omo and Nestle’s Nido are using. The insight is based on the human truth that “All parents want their children to grow up happy and healthy”. The insight they then developed, which is relevant for both washing powder and infant formula is “I want my child to experience everything life has to offer, even if it means getting dirty”. What is particularly interesting in this example is that both companies have been able to use the same human truth and insight but make it relevant for each of their categories.
My recommendation, therefore, if you are struggling to develop insight, is to analyse your competitors or the brands targeting a similar audience. If you can identify on what human truth and insight their message is based, you may be able to use it too.
These are just a few of the many ideas which I shared with enthusiastic audiences wherever I went in China. It is clear that both entrepreneurs and corporate executives in the country are keen to improve their innovation. They are also thirsty for support in further improving their ideation. For this reason, I believe they will continue to top the nations in patent applications for many years to come. Therefore, it is vital that we supposed ” developed” nations support our entrepreneurs and creative executives to stay in the race. Unless we do so, we could see China dominate new products and services as they have dominated manufacturing in the past.
What do you think? I would love to hear your thoughts on the race for innovation.
I recently spent a few days in a condo that I have rented before in Miami Beach. It is a wonderful penthouse suite with panoramic views of the sea to the east and Miami city and port to the west. I rent it because I am always delighted to spend a few days of vacation in such a perfect place.
However, this last time I wasn’t happy. What has changed? Very little really but enough to make me feel disappointed. That made me reflect on how quickly our customers can move from delighted to dissatisfied because of some small detail we might have overlooked or which we ourselves see as irrelevant. Let me explain.
I arrived at the condo building, but the usual doorman with whom I had built a good relationship has been replaced by a new person. Just as efficient but not “my” doorman; he didn’t know me so he came across as less welcoming and friendly. In the business world our customers like to be recognized for their loyalty.
The condo was as perfect as ever, but had obviously been cleaned in a rush in time for my arrival. It smelt wonderful of course, but I didn’t notice the high-sheen tiled floor was this time wet and I went skidding onto my backside as soon as I entered. Customers notice when things are wrong more than when everything is right.
The usual paper products were supplied, but only four sheets of kitchen roll and not many more of toilet paper! No big deal but it meant I had to immediately go out and buy them first thing the following morning instead of lazing at the beach. Customers will sometimes buy a competitive product rather than go searching when yours is out-of-stock.
I went to bed early upon arrival because I was tired from the sixteen hour trip and the six hour time difference. I had never noticed before but neither the blinds nor the (too short) curtains cut out the daylight, so I tossed and turned for hours before sleep finally took over. Small issues with your product or service may go unnoticed – at least until there are many more “small issues.”
I am explaining these details to demonstrate how little things can build upon one another to create dissatisfaction. The same can happen to your customers. So ask yourself, what little changes have you been making that your customers haven’t (yet) noticed?
Reducing pack content just a little
Reducing the cardboard quality of packaging
Making the flavouring just a little more cheaply
Increasing the price just a few cents
Shipping just a few days later than usual
Call centres being not quite as friendly as they used to be
Response time to queries and requests a little slower than before
These adaptations are unlikely to be noticed by your customers at the time they are implemented, unless they are already unhappy with your product or service. The minor changes you have been making over the past months or years will have gone by without any impact on sales. Therefore you decide to make a few more. Each will save you a little more money, which adds up to big savings for you.
However, one day your customers will notice and question their original choice (>>Tweet this>>). To avoid this slow drain on your customers’ satisfaction and delight, here are a few ways to avoid this situation arising in the first place:
When you run product tests, compare not only to the current product and your major competitors but also to the previous product. (or its ratings if the product is no longer available)
Run a PSM (price sensitivity meter) or similar test to check levels of price perceptions and acceptable ranges.
Measure br and image on a regular basis and review trends not only the current levels.
Check that call centres are judged on customer satisfaction and not (just) on the number of calls answered per hour.
Offer occasional surprise gifts or premium services to thank your customers for buying.
Aim to make continuous improvements in response times both online and in call centres.
Perhaps surprisingly, in many categories, customer satisfaction, loyalty and delight come from the small differences and not the big basics (>>Tweet this<<). For example:
Consumers are delighted by the perfume of a shampoo more than by the fact that it cleans their hair.
Amazon surprises and delights its customers by occasionally offering premium delivery for the price of st andard.
Kids will choose one fastfood restaurant over another because of the “free” gifts offered.
Women love to buy their underwear from Victoria’s Secrets because they walk out with a pretty pink carrier bag overflowing with delicate pink tissue paper.
Men buy their girlfriends, wives and mistresses jewellery from Tiffany because they know that the little aqua box they present to their loved one already says it all, even before it is opened.
A car is judged on its quality and safety by the “clunk” of the door closing, more than its safety rating.
In today’s world of dwindling product / service differentiation and an overload of choice, which I already spoke about in the last post entitled “Do your Shoppers face a purchasing dilemma? How to give the right customer choice every time”, your customers want to be made to feel cared-for, not cheated. Find new ways to surprise and delight them and they will remain loyal, even if you have to increase your prices. As L’Oreal continues to remind its consumers every time they buy one of their products, “They’re worth it”.
If you would like to review your br and building and learn new ways to catalyse your own customers to greater loyalty and delight, then contact us for an informal discussion of your needs. I know we can help.
Last Saturday was the start of Summer in the Northern hemisphere and the weather certainly confirms this, at least for now! Summer is a great time to reflect on the progress we have made to date on our journey to Customer Centricity.
Organisations need to take a step back occasionally and review how their plans are going. What changes do they need to make to ensure they meet their objectives over the remaining six months of the year? So here are my ten ways to tell if you are well on your way to becoming truly customer centric – and what actions you can take to get further along your journey.
#1. Identify the category in which you are competing
This may sound strange to you, but many br ands are not competing in the category in which they first thought they were. Think soup which is now a meal replacement, or laptops which are now entertainment platforms.
Action: Review how your product or service fits into the customers’ daily life and how they compare and decide between options. This will help you identify your real competitors and the actual category in which you are competing.
#2. Underst and your primary target
Knowing precisely who the customer is for each of your br ands is the first essential step to satisfying them. Use the BCG Matrix to help select the best group. Do you already work with this matrix, or do you have a better system? Please share your own best practice below, so I can learn.
Action: Review the target audience for each of your br ands and ensure you have information on their “4Ws”. In other words the Who, What, Where and Why: demographics, purchase, usage, media use, places of purchase, consumption, connections to communications, their values, usage motivations and emotions when doing so. If you would like to learn more about targeting, check out this post.
#3. Watch and listen to your customers
Personal experience of your customers is essential to putting them at the heart of your business.
Action: Ensure everyone has regular – ideally monthly – contact with the customer. This can be by listening in at the call centre, watching market research interviews & discussions, or observing customers as they shop and use your product / service.
#4. Know what current trends could mean for your business
Many organisations follow trends, but they don’t provide any competitive advantage. It’s time you started turning them into future scenarios or use future prototyping. (Contact us here to learn more about this)
Action: Identify the most relevant trends for your br and and then project them into the future to develop two axes of uncertainty and four plausible future worlds. These will help prepare the business for future opportunities and challenges. Alternatively, why not try Sci-Fi Future Prototyping? (Contact us here for more information)
#5. Reinvent your innovation
Most organisations innovate based upon their current knowledge or technical skills. This keeps them boxed into a narrow b and of categories.
Action: Take your NPD thinking outside its box, by making use of all relevant innovation levers, including, but not limited to, packaging, channels, sourcing, communications, br anding, services. Check last week’s postfor more details about innovation.
#6. Follow your image
It is amazing how many companies don’t follow their br and images on a regular basis. Image trends are a great way to be alerted to possible sales issues before they appear in the numbers.
Action: Identify the major image attributes of both your own and competitor br ands, and measure them regularly (annually for fast moving categories, every two to three years for slower moving ones).
#7. Turn your information into insight
Whilst information and knowledge are essential to gather, it is only when they are turned into underst anding and insight that they become truly customer centric.
Action: Review your insight development process and ensure decisions about customer satisfaction are based on them and not just on information. Insights ensure your communications resonate with your customers and your product / service delights and sometime surprises them.
#8. Share your information and insights
Companies spend a lot of money gathering data and information about the market and customers. However, in most cases they spend far too much money, because the information that is needed is actually already available somewhere in the company.
Action: Review your organisation’s information needs and negotiate contracts and access company-wide rather than by department. Make your information and insights available to everyone in the company through a library or database with appropriately managed access rights.
Besides br and image, are you following other KPIs to measure your progress on your journey to customer centricity?
Action: Identify the three to five most important areas you want to improve and then measure them consistently. If the numbers aren’t trending up, act – see #10. below. The actual metrics you follow will depend upon your industry, but may include market comparison (shares), availability (distribution or out-of-stock) communications impact, competitivity, value.
#10. Plan for action
Once you have identified the KPIs to follow, you need to take action to improve those that are trending downwards and perhaps also those which are stable.
Action: Since your KPIs are the most important metrics for your business, plan actions as soon as their trend changes and don’t wait for them to start declining. Once they are, it will be much more difficult to reverse.
These ten steps should ensure your organisation remains focussed on the customer and doesn’t get lost in the day-to-day issues of the business. After all, as I have been quoted many times for saying:
“There may be customers without br ands, but there are no br ands without customers” (>>Tweet this<<)
Think about it; do you have the right priorities? How do you know? Have I missed an essential step off of my list above? If so, let me know. Please also share which of your actions towards customer centricity you are struggling with the most. Together we’ll find a solution.
Did you do a double-take when you read this post’s title? I bet you did. R&D is at the heart of innovation for most major manufacturers, so they should be excited by consumer underst anding, shouldn’t they? You would think so, but in reality, their concepts are almost always based on the company’s current technical know-how and skills. If you want to break away from this very predictable process and get them excited so they add some “oomph” to your innovations, then read on.
One of my most loyal CPG clients contacted me recently about the latest problem (opportunity?) he has been asked to address: making R&D more consumer centric. Having faced a similar challenge in one of my previous jobs, I immediately empathised with him. It can really be a daunting task, especially when speaking to people who are usually more interested in numbers than emotions.
I remember speaking about consumer centricity at an annual R&D conference and in the discussion session that followed, the Head of Operations commented “You know Denyse, our R&D group is very consumer centric; we know exactly what consumers need. It’s marketing who don’t know how to explain to consumers why they need what we develop!”
Trying to keep a straight face, I thanked him for his comment and also for having just proven my point. I said that I believed it was time for R&D to become more consumer centric by developing a better underst anding of consumers and their needs. I then went on to suggest some ways they could get closer to current or potential consumers. By the end of my talk I had a queue of volunteers wanting me to organise some of the suggested actions for them. Here’s what I shared:
Observe & Listen to your Consumers
Most people working in a company and certainly those working in R&D, know far more about the category than the average consumer. However, most employees – excluding hopefully the insight team – don’t know what their consumers really think about their products and services.
Observation of consumers as they go about their daily lives, helps us to identify pain points, whilst also stimulating new thinking and concepts. Listening to their complaints and ideas, whether online, through carelines or during a market research project, can provide the consumer perspective and input for new or better solutions.
It’s time for R&D to get out of the factory and into the shops & homes of consumers (>>Tweet this<<)
Involve your Consumers
Last year Ben & Jerry asked residents of five cities in the USA to vote for the names of new ice cream flavors that reflected their locales. The br and’s Scoop Truck toured 11 cities and also served as one of the campaigns’ voting platforms. Once consumers had eaten their free frozen treats, they were asked to use their spoons as “ballots” (they voted by depositing their spoons in one of several recycling boxes marked with various ingredient names). Doesn’t that remind you of another br and which used a similar voting tactic when it was starting out – Innocent?
Great br ands and companies have no problem “stealing with pride” and recognise good ideas when they see them (>>Tweet this<<)
Ben & Jerry’s are by no means the only br and to involve their customers in developing or choosing new products and services. Nespresso have been collaborating with their Club members for years on many aspects of their marketing. Whether choosing the end of their commercials or identifying the next new blend to be launched, Nespresso Club members are made to feel important and privileged.
Involving customers in the development of new product and/or service concepts not only makes them feel valued, it also makes them more loyal and valuable advocates of your br ands too (>>Tweet this<<)
Exp and your Thinking
How do you come up with ideas and concepts for new products and services today? If you are like most companies, they probably come in a majority from your current portfolio of br ands. Whilst this can meet with a certain level of success, as it is what customers expect, or rather dem and, there is another process that can drive even greater success. This is the use of what are often called innovation levers, or what others refer to as “the s and box”. I love the latter term as it suggests light-hearted play, which is an effective way to get people thinking “outside the box”.
Innovation levers enable thinking to “push the envelope” and to exp and outside the box in which R&D and marketing can sometimes find themselves. Rather than thinking about the next flavour or packaging idea, why not consider a new channel or communications strategy?
Last year, Coke used two of these levers, but combined them, when it launched its “sharing can”. Not only can the can be split in two for sharing, it also enables new potential consumers to consider buying a can, such as those with smaller thirsts or those traveling.
Starting from a different innovation lever than the one you usually use can result in more creative NPD concepts (>>Tweet this<<)
Go Beyond Trend Following
Another challenge when looking to make R&D more customer centric, is in moving them from trend following to scenario planning. R&D people often seem to be more comfortable with trends and “poo poo” future scenarios as improbable forecasts. It is therefore important to explain to them that scenario planning is not forecasting. If they can allow themselves to be open to listening to a story, which exposes imaginary but plausible new worlds to them, they can become inspired by the opportunities.
The innovative ideas that are created from scenario planning, have in my experience been amongst the most ground-breaking ever developed. Isn’t that exactly what we would all like to market, rather than the staple diet of predictable renovations?
These are just four ideas that I shared during that conference a few years ago, to stimulate and excite the R&D department. Hopefully they have inspired you too to have a go at convincing your own operations people to get closer to the customer.
Have you other examples of how you got your own R&D people to think outside their technical box? Then I’d love to hear about them, so please share your thoughts and ideas below.
Need help in taking your innovation outside its box, or in connecting with your customers? Let’s discuss how we can help you catalyze your customer centricity; contact us today.
C³Centricity used images from Microsoft, Ben &Jerry’s and Coke in this post.
This post has been adapted from one first published on C³Centricity in June 2013
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