Everyone is talking about customer first strategies and why they are important. However walking the talk is a different matter!
An interesting article on NewMR by Ray Poynter prompted this post. He spoke about the differences between customer focus and customer centricity and the often times confusion between the two terms. That is why I tend to speak about customer first rather than customer centricity these days.
In its simplest form a customer first strategy is about thinking customer first in everything you do. Yes I know it sounds easy, but it really isn’t. And it doesn’t come naturally, at least to start with. I believe that’s because it involves a culture change to move the organisation in this direction. But I can assure you it’s worth it; its value is now well proven.
If you would like to see some exciting statistics about the value of making your customers the heart of your business, then CMO.com has a great article. It’s called “15 Mind-Blowing Stats About Customer Centricity” and many of the research results reported are still valid today, so it’s definitely worth a read.
What Are Not Customer First Strategies
I have seen a customer first strategy defined as
“a strategy by which businesses create their products, content, and marketing campaigns so that they serve their customers first, and their organization second.”
I don’t agree! If you don’t think about your organisation then it will likely fail! That said, I am also a little sensitive to the comments of Sir Richard Branson, who says
“Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.”
This may be true for an airline, where the client is primarily basing their opinion on the service on board and the “niceness” of the crew. After all, every airline will get you from A to B.
However for many industries, customers are enjoying (or not!) your product or service without your employees being present. They will remain loyal (or not!) to your brand, based upon their own personal experiences, at least in most cases.
A customer first strategy is therefore not about only thinking about the customer. It is about understanding how best to serve them in such a way as to delight them, while keeping your employees and shareholders happy. This is relatively easy to do because when the business is going well, all stakeholders are happy.
What Customer First Strategies Are
Econsultancy asked what effective leadership in the digital age is. Several key leadership qualities were found, including being ruthlessly customer-centric, data-driven, innovative, collaborative and agile. I am thrilled to see customer centricity coming first by a long margin.
So the leaders have got the message, but what are they doing about it? Not a lot in many cases. And why? From my experience it is because they just don’t know where to start or what to do. (If that’s your situation, try our Customer Centricity Mini C3C Evaluator™ – for free! It will immediately show you your biggest opportunities.)
Executing a customer first strategy doesn’t happen without a clear understanding of what needs to change. This is why I decided to take the four other qualities mentioned and see how they influence the adoption of such a culture within an organisation.
Being Data Driven
We are all aware that when we visit a website, buy something online, or post on social media, we are being tracked. Information is being gathered about us and our actions which can then be used to follow our behaviours, show relevant advertisements or even communicate directly with us.
But automated data gathering doesn't only happen online. Many organisations store our information when we contact their customer service center, enter a promotion, sign up for a club or gift card, or apply for free samples.
While the GDPR in Europe has increased the security of this data and our permission for companies to use it, data driven marketing is not all bad news.
OK, so I'm not talking about the 2002 Minority Report. I'm not speaking about how the hero is bombarded with advertising messages in the street and in the shopping mall, as the clip below shows.
No. While it is unlikely that we would appreciate such invasive messaging, people rarely complain about the suggestions proposed of further articles to purchase when they visit Amazon and similar online stores. This is because they provide a real service and we therefore happily give our details to these websites.
Data driven marketing and communications will need to carefully balance the support they provide to customers, with respect for their desire for privacy at certain times. The companies that succeed will be those that understand this and connect at the right times. Those that don't, risk being banned from all future contact.
But good as the above list is, it needs a fourth resolution in my opinion; that of using the collected data for the benefit of the customer. As the data comes from them I believe all organisations have a duty to use it to return our customers' trust in us when they shared it. Do you agree? Let me know in the comments below.
The post includes the ten reasons your innovations are failing:
Meeting company quotas
Lack of customer understanding
Lack of category understanding
Not living up to your promises
Not being sufficiently differentiated
Being too different
Pricing yourself out of the market
Being too far ahead of the customer:
If you think that any of these reasons applies to your own organisation, then you must read this post. It contains answers to solve each of the issues. Invaluable!
Despite moves to flat organisational structures, open-offices and social areas in work today, silos seem to be as strong as ever! And yet silos cost businesses a fortune in wasted effort and investments. Suppliers are unlikely to tell you when you have already bought a report. I found this was the case for one of my clients, that had bought the same report an amazing 26 times! They wasted millions just because their organisation was siloed.
Departments hold onto information they have gathered like treasure and consider it to be for their personal advantage only. This results in multiple projects being run on the same topic, sometimes even in parallel! I found three similar projects being run by an FMCG client, that the department that hired me was unaware of. By working collaboratively, they were able to have more resources, both in terms of budget and personnel! You can imagine what that did to the completion of all the projects. They were finished in record time and well under budget! One more happy customer!
If you're not sure your information resources are being used effectively and efficiently, then we should talk.
Collaboration is the only way to decrease this waste and hopefully marketing automation and open data storage will help resolve at least a large part of it. However I have found in working with clients that it is the culture change that makes the biggest impact. After all, what is an employee's benefit in working with and helping other departments? The executive board must encourage collaboration and be seen to walk their talk, for the whole company to follow.
Have you ever heard the phrase "it's not in my objectives" when asking for support? If so, then why not suggest that collaboration be included in everyone's objectives? Change will happen - fast!
Following on from the need for innovation, today's businesses must be agile and flexible. With technology changing the way we live our lives, companies must be both ready for change and prepared to benefit when there is something relevant happening.
Some of the best examples of Agile Marketing:
Being agile can take many forms. The examples below show that it can be online, offline, or outdoor. Brands that are agile are where their customers are; that's what matters.
Tweets when the lights went out at the SuperBowl in 2013:
Unofficial ads during the 2012 London Olympics:
The ongoing struggles between major brands:
Audi vs BMW
Coke vs Pepsi
(Thanks to CAVE House for this great video collection)
Of course these examples could only be developed because the brand owners were ready to take advantage of what was happening in their customers' lives. They therefore had to know them deeply in order for their communications to be relevant and resonate with them.
Reasons Companies Fail their Customer First Strategy Adoption
6. Everyone in the organisation is not clear about their role in satisfying and delighting the customer.
7. They think it costs too much
Which of these seven reasons is (are) the main reason(s) for your slow move to a customer-first strategy adoption? Is it something different? Let me know in the comments; I'm sure every reader would love to exchange their own experiences with you.
If you would like to know which area of a customer first strategy offers you the most opportunities for improvement, why not complete our mini C3C Evaluator™ tool? It's FREE! And in just 12 questions you will get a clear indication of what to prioritise. Then let's talk.
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Whether you believe that 60% of new product launches fail, or the number is 80% or 95%+, the truth is that successful innovation is rare. Why is this? Read on for my own ideas of the reasons and propositions for some simple solutions.
This time, I want to examine the role of the customer in successful innovation. And why they should actually have a prominent position throughout the process.
Start with the Category rather than (just) the Customer
Every customer-centric organisation should start their processes with a review of the customers they are looking to please. But to do this, the first step to both insight development and successful innovation is to identify the category in which you are, or want to compete. Especially when looking to innovate, it is vital to identify what business you are in.
Now you probably can immediately answer that question but would you be right?
A recent client of mine was looking to launch a juice flavoured soft drink. They naturally (?) thought they would be in competition to juices. When we dug deeper, using our “Home or Away™” decision tool, we found they were actually competing with energy drinks for athletes!
Another practice I use is to zoom in or out when looking at a category, in order to identify new opportunities. Today’s technological world is forcing many organisations to take another look at their complete business models – whether they like it or not!
Telecoms have become geolocalization data providers to other industries.
Pharmaceuticals are being forced (?) to move from treating illness to maintaining wellness.
Food companies are moving into nutraceuticals, concentrating the health benefits of certain foods. (have they really only recently understood that our health comes primarily from the food we eat?!)
Tobacco companies are reinventing personal pleasure systems with e-cigarettes and other tobacco replacement products. In fact, André Calantzopoulos, Philip Morris International’s CEO recently predicted a “phase-out period” for cigarettes.
Alcohol providers are turning more and more to lower and non-alcoholic drinks trying to keep up with the interest in wellness. They have understood that whereas drinking is a social behaviour, most people no longer include getting drunk with that sociability.
From these examples, it is clear that most companies could benefit from a re-evaluation of their assumed category, to see whether it has or will change in the near or longer-term future.
Once the category is defined, it becomes much easier to identify the correct customer segment to target. Of course, you still need to get to know them through customer connection sessions. And then complete both a customer persona and journey map for them. (You do have these don’t you?)
For more ideas about developing a customer-first strategy so as to be better prepared to develop successful innovations, join the FREE Customer Centricity Champions Webinar? It shares many tips, tools and templates to catalyse your business and improve your customer understanding immediately.
Your business is or will change - fast - so don't depend on your skills alone
One of the problems I see when I first start working with a new client is that they start their innovation process from their strengths, their technical and product skills. While this may deliver quicker introductions, it is more likely to produce renovations and certainly not ground-breaking innovations.
This is such a standard "no-brainer" way of innovating that many companies find themselves out of business as a result.
Kodak thought it was in the photo business and not in the memory and souvenir business. They consequently lost out to digital, despite having the technology
Borders thought they were in the print book business rather than the storytelling business. As a result, they lost out to Kindle, despite a late reaction with the launch of Kobo. For now, Barnes & Nobles have managed to join the race with their Nook, but for how long? It will be interesting to see whether Amazon's quiet expansion of its physical bookstores will support or sound the death knell for other outlets.
Blockbuster video rental lost their dominance of the home entertainment industry to streaming options like RedBox and Netflix.
These are a few examples of businesses that have changed, leaving the category leaders high and dry with no-one to blame but themselves for their lack of scenario planning. (This won't happen to you, will it?)
And what about AI and VR and their impact on TV, gaming, music today?
Speaking of which, look at the graph on the right which shows the incredibly fast change from offline to online music. In less than ten years online passed offline and all but annihilated it!
This is how fast and well prepared all businesses need to be today.
Many industries have been cloned into totally new businesses as a result of technology and new customer priorities.
As already mentioned, Telecom companies now make more money selling geolocalization data than they do selling phones and lines.
So what about some other industries that are being impacted by changes in customer behaviour and preferences?
As just one example of this, Food companies must now adapt to delivering family time, not just ready-made meals. There has therefore been an explosion in meal kits because families want to eat better and even prepare together.
The future of the future
But enough about the past and present, how can you prepare for the future and have successful innovations? What new areas are some of the larger online companies buying into today and why?
Google has gone from Internet-related products and services to hardware such as Pixel smartphones and GoogleHome, an AmazonEcho-like device. It has also expanded into a multitude of other industries, through partnerships and investments. These include energy, AR (augmented reality), VR (virtual reality) and eye-tracking. It's clear that they intend to stay up-to-date if not ahead of fast-moving trends and be ready to take advantage of them. Read more on Wikipedia.
Perhaps in preparation, in the last year or so Google has reorganised its various interests into a conglomerate called Alphabet. Google remains the umbrella company for Alphabet's Internet interests, but this restructuring no doubt announces more to come.
Virgin has gone from airlines, media and entertainment, to travel, health and aerospace. You can read about all their industries and investments on Wikipedia.
Amazon has gone from an online bookstore to the general retail of a vast selection of products. Today it is testing bricks and mortar stores for both books and general groceries. You can again read more about this on Wikipedia.
Facebook started as a social media and networking service. One year ago, its CEO Mark Zuckerberg revealed his ten-year vision, centred around artificial intelligence, global connectivity, VR and AR. Read more on Wikipedia.
Tesla started in the automotive industry but has since moved into energy storage and residential solar panels. Today it is advancing into underground high-speed transport and space travel.
All these examples show the importance of being ready to adapt to fast changes impacting many industries at lightning speed. We no longer have the luxury of time to wait, watch and learn as we once did. Future scenario planning is the only way to be ready for all eventualities and to be able to quickly jump into any new opportunities before our competitors do.
Your next steps to future-proofing your innovation
Some of my clients understand that they are not as well-prepared as they need to be for successful innovation. In my training course I propose many different ideas; here are just a few of them:
#1. Working with new innovation levers
As already mentioned, most organisations start innovating from their past successes and current skills. While this is certainly quick, it is unlikely to lead to successful innovations. Why not challenge yourself to look at your business from a new perspective?
The diagram on the right is a simplified example of the innovation wheel that I use in brainstorming sessions with clients who are tired of thinking within their boxes.
A personally adapted and developed wheel is a powerful tool to get people to think differently about their brand, category or offer. The brand expansion it encourages has seen brands like:
Gerber and Purina move into insurance.
Nespresso move into china and chocolate.
Mars move into ice cream.
Vicks (P&G) move from various cold remedies into a sleep-aid.
What all these examples have in common is a deep understanding of both their customers and their own brand image.
When one or both of these are missing, you get epic failures like the examples below:
Coca-Cola Clothing: while it may work for sponsorships and promotions, clothing didn't work for them - this time around?
Zippo perfume for women: Zippos got it spectacularly wrong with this offer on many fronts. Smoking and especially Zippo lighters have very masculine images. Replacing the wonderfully exotic and luxury glass bottles of perfume by this was never going to work!
Colgate frozen food: The only thing that frozen entrees and toothpaste have in common is that after the first you need the second! From that to expecting consumers to make the jump from minty mouths to chicken was just too much!
#2. Zooming out for brands and categories
When you are successful in one category, it can be tempting to extend into others. However, this needs to be done after careful thought. Go too far from the parent brand, as the above examples did and you'll be doomed to failure. Stay too close and you'll not benefit from anything more than a mere renovation.
Companies which expand successfully are those that build on their strengths, whether image, position or technical know-how. One example I like to share of a successful innovation using this idea comes from Nespresso's owner Nestle.
They expanded from capsules for coffee (Nespresso) into capsules for both hot and cold drinks (Dolce Gusto).
Nestle then expanded their systems into BabyNes, a capsule system for bottle feeding.
I can imagine they will be looking to extend their system even further in the future. Perhaps they will consider adding minerals, vitamins and supplements to food and drinks, or targeting specific groups of consumers such as seniors or athletes. It will be interesting to see what comes next.
#3. Zooming into a category niche
It is possible to innovate by zooming in rather than out of the category in which you are in. There are again many examples of this since, in theory at least, it is simpler to do. You already know the category customers and can segment to appeal more strongly to certain groups of them.
Food manufacturers use this strategy a lot. They often extend into low calorie or low fat, and more recently into gluten-free, OMG-free or lactose-free offerings.
Online marketers depend a lot upon finding the right niche for their product or service offer. They have the advantage over bricks-and-mortar stores of collecting a wealth of personalised information. Together with machine learning, they can quickly develop algorithms to precisely target each person with relevant offers. Offline retail will never catch up, however long they collect data - unless they have an online sales strategy too, of course.
So there you have some ideas on how you can improve the frequency of launching successful innovations. Whether working with scenarios, innovation levers, zooming in or out, the one element every strategy has in common is customer understanding. You wouldn't expect anything less from me, would you? Going forward just remember:
It's important to know and understand your customers intimately today but also how they are likely to change tomorrow.
It's important to understand the category you really are competing in and what customers think about it.
It's important to understand your brand's image and ensure it's aligned with any future innovations you consider.
What new ways are you looking to successfully innovate in this fast-paced, constantly changing and challenging world? Please share your ideas and thoughts about the above ideas or add new ones below. Thanks.
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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.
Things have been pretty hectic for me these past few weeks. As you read this, I am in New York presenting at the CASRO Technology and Innovation Event, 6th to 7th June. If you’re attending the event, please stop me and say “HI”; it would be awesome to meet some of my American readers!
I then head down to Miami where I am guest lecturer of an Executive MBA course at Miami University. The following week I fly back up to Atlanta to speak and chair a session at IIeX-NA from 13th to 15th June.
If you’ve never been to an IIeX Insight Innovation Exchange event, then you’ve missed a really exciting conference. It’s run like a multi-channel TED event, where most of the presentations are just 15 minutes long. You are never bored and can learn and experience things you can’t find elsewhere. And if you want to learn even more, there are also longer workshop-style talks on a multitude of topics.
There’s still time to attend and using my special speaker discount code (SPEAKER20) you’ll get a very generous 20% off the full price! If you do attend, don’t forget to stop me and say “HI”.
I’m Taking a Marketing Course!
As if the preparation for all these events wasn’t enough, I also started a marketing course a couple of months ago. You might wonder why I decided to do that when I spend my life advising others on their marketing. The reason is that we are never experts in every area and as we say in Switzerl and
“The cobbler’s children don’t wear shoes”.
In other words, we never seem to have the time to do what we help others to do. So true don’t you think?
The decision to invest in myself has been one of the best I’ve made in recent years, as it will simplify my day-to-day work. After all, they do say
“You have to spend time to save time”!
The best part of the program is that I now have someone telling me what to do and prioritising the steps in relaunching my website. There will also be some exciting new offers for you, my dear reader, like the webinar series I mentioned a while back.
During the weekly videos of each module of the course, I’m getting exposed to many alternative platforms, systems and tools from the ones I already know. So it’s also making me a better digital marketer from which my clients will then benefit. A true win-win investment.
I now have someone telling me what to do and prioritising next steps. I’m also getting exposed to many alternative platforms, systems and tools from the ones I already know, so it’s also making me a better digital marketer for my clients. A true win-win investment.
Time for You to Learn Something New?
This has been a rather long introduction to say that I believe we should all invest in ourselves, every year. Attending workshops and conferences, hiring a coach, or asking someone to give us training on a topic are all excellent ways to invest wisely in ourselves. However, we can so easily get caught up in our day-to-day work, that we forget to do so, especially as we progress in our careers. I have always said that for me:
“A day without learning is a day without living”
But with so many years’ experience, I tended to limit myself to workshops and conferences. As a result, I never really challenged myself by opening my processes and tools to an external perspective. My marketing course is certainly making me feel very uncomfortable, but I am growing as a result.
Many organisations rely on internal training alone, so they find themselves in exactly the same situation as I was until recently. They never challenge their current thoughts and processes. This can be even worse in large corporations where the vast majority of employees “grew up” in the company, remaining tens of years in exactly the same environment – think P&G or Nestle. While this may indicate a great company, which I’m sure both are, it can result in a self-perpetuating belief that they are the best, in everything.
Get Comfortable with Being Uncomfortable
Therefore, this week I am challenging you to get comfortable with being uncomfortable. (>>Tweet this<<) I want you to expose your ideas and thinking to others, both inside and outside your company. Share your thoughts with people you don’t normally talk to. Ask their opinion about a question that you are finding difficult to answer.
You don’t have to take their advice, but just getting a different perspective can be extremely helpful in making your own mind clearer about what you should do. In the same way as “sleeping on it” often brings a solution in the morning, asking for differing views can help us to be sure about our own perspective.
I have just updated the C³Centricity training offers based upon my recent work with clients all over the world. These are the courses I now offer, all available as one and two-day sessions:
I2A – Insight to Action: Tired of not turning information and knowledge into underst anding and insight? This one-day or two-day course will take you from what is an insight, to how do you uncover them and then how to action them to grow your business.
I2I – Insight with Impact: Often market research and insight specialists are not very good at sharing everything they learn about the market and its customers. This course takes them on a journey to increased impact and visibility, to ensure the business optimally benefits from its information investments.
N³ – Next Generation Insights: Are you concerned that your definition and development process of insights may need updating? This course will take your team through an analysis of your current process. Together, we will then optimise and update those parts that are not state-of-the-art and work on a real case from one of your current challenges.
M³ – More Meaningful Market Research: When was the last time you reviewed your MR toolbox? There are many exciting new technologies and processes which can bring increased learnings about your customers. This course will also help you to identify the best KPIs to follow your business, as well as support you in renegotiating your ongoing contracts with suppliers.
C³ – Consistent, Creative Communications: Advertising campaigns are often developed in the same way and tested with outdated processes and metrics. With more communications moving to digital, a new approach is necessary. This course helps you to identify and prioritise the most relevant channels for your messages, as well as to measure the changes in your br and’s image, rationally, emotionally and culturally.
I³ – Immediately Improved Innovation: Exp and your innovations beyond your current technical skills. Incorporate new levers and prioritise changes in your NPD processes and tools for more successful innovations.
S³ – Strategy and Sensitivity with Scenarios: Open your business to new ways of developing vision and strategy. Become proactive through effective scenario planning and get prepared for all possible future opportunities and risks.
B³ – Boosting Bolder Business: Identify the blockages in making needed changes within your organisation. Develop and successfully implement appropriate strategies and plans to catalyse your transformation.
Don’t these courses sound great? I am so excited to be able to offer them to companies around the world, no matter what the industry in which you may work. Being customer centric means the ideas and tools are relevant no matter what your challenges are and my vast global experience ensures a knowledgeable adaptation to your specific and cultural needs.
And don’t forget, if you would like to get a new perspective on something, I’m always ready to jump on a call to discuss with you. C³Centricity offers short, sharp catalyst sessions of a few hours to a full day or more. Perhaps this is exactly what you or your team need to move forward?
Challenge yourself to be comfortable with getting uncomfortable – it won’t last long before you are once again at ease, but in a bigger, brighter and better environment!
When I get several requests in the same week on exactly the same topic, I know something is happening in the marketplace. This week was one such occasion.
A Pharma company wants a presentation on it; a CPG company asked me to give a half-day workshop about the topic; a conference requested a keynote speech about it; a major US business school wants a guest lecture covering the idea and a consumer goods company wants an article for their newsletter. What’s the topic? The new ways to innovate, that’s what.
So many organisations still have an innovation process that starts with R&D or operations. It’s time to reverse your innovation funnel and start with the customer. (>>Tweet this<<) What are their problems with current products and services; what do they dream of having? How are they compensating or compromising?
“If I had asked people what they wanted, they would have said faster horses” Henry Ford
“People don’t know what they want until you show it to them” Steve Jobs
However, as Henry Ford and Steve Jobs remind us, customers don’t usually know what they want. They are usually very clear about what they don’t like, but they also often know the solution they are looking for – even if they don’t express it as such. It is our job to interpret what they are saying into what they need. Therefore, identify the result they want but not how they want to achieve it, otherwise you will be looking for that “faster horse”!
2. Stage-gate innovation is essential for a successful business
Today’s world is fast paced and customers never stay satisfied for long. What surprises and delights today, is ordinary and normal, if not tomorrow, at best in a couple of weeks or months. That’s why it’s vital to work on new product and service developments even before you launch your latest offering.
Many companies today work with generation pipelines, with three, four or five stages of innovation preparation. This ensures that they are already working on the replacement of each product they launch, whether or not it’s a success.
3. Line extensions can only do so much
According to the McKinsey article “Reinventing Innovation in CPG“, real growth comes from ground-breaking innovations, not simplistic renovations. However, line extensions do provide the time for organisations to prepare their true innovations, while responding to today’s customers incessant desire for novelty.
They are also easier to develop and launch, which means they are less dem anding on resources. Companies which are satisfied with only incremental innovations are unlikely to see significant growth in the long-term. For this reason successful br ands need to do both. (>>Tweet this<<)
4. Launch before you’re finished
Many tech companies use this approach, by involving customers as beta testers. In this way, they get their customers help – for free – to improve and mould the final offer. It also allows them to launch more quickly and gain the positive image associations of being first to market.
If you are concerned about confidentiality or competitive speed to respond, then work with customers through co-creation. (>>Tweet this<<) Involve them at every stage of the development process from ideation to launch preparation. If your management are concerned about the risks of sharing innovative ideas outside the company, involve employees instead, perhaps from other divisions so they are less biassed.
5. Review the category in which you’re playing
Are you sure that your customers see your br and in the same light as you do? Many times I have heard a customer correct an interviewer in a research project, when asked about br ands in a category. “That br and isn’t in that segment, category A” they say; “It’s not a competitor of X, but of Y and Z, the main br ands in category B”. Some examples include dried soups which today compete with sauce mixes, carbonated soft drinks with fruit juices and body gels with shampoos.
Another advantage of underst anding the category in which your customers place your br and is that this can provide you with new ideas for expansion.
Many confectionary br ands have moved into ice cream and desserts. They have understood that they are being seen as more of a “treat” than merely “just” a chocolate bar. When your customers choose between products from several different categories when deciding what to eat or buy, it is a clear indication that you are not (only) competing in the category you first thought you were. (>>Tweet this<<)
In conclusion, there are many reasons why innovations fail:
A short-term mindset where success is dem anded in weeks or months rather than years.
Top management instils a fear of failure, so no-one will defend ideas that are unpopular.
The innovation process itself is biassed towards current knowledge and skills.
A lack of deep customer underst anding.
These five ideas will help you to reinvent your innovation and also make it more customer-centric. After all isn’t that what all best practices should do today, involve the customer? If you have other – better? – ideas, then why not share them below?
This post includes concepts and images from Denyse’s book Winning Customer Centricity. You can buy it in Hardback, Paperback or EBook format in the members area, where you will also find downloadable templates and usually a discount code too.
The book is also available on Amazon, Barnes and Noble, iBook and in all good bookstores. If you prefer an Audiobook version, or even integrated with Kindle using Amazon’s new Whispersync service, you’ll have to be patient just a little longer – but it’s coming soon!
I was recently on a trip to the US; a transatlantic flight on a Boeing 747, my favourite airplane – apart from the Seneca II that I used to own. Anyway, the reason I love long-distance flights is because they cut us off from everyday life, although unfortunately no longer the phone nor web these days.
They therefore provide us with a very rare commodity; some precious thinking time. How do we ever get that otherwise? Speaking personally, my brain seems to be constantly under pressure from the challenges of work, family, friends – in a word, living – so I love it when I need to get on a flight, the longer the better.
I watched Transcendence on this flight; it’s about the moment when the human brain and technology become one. I love science fiction (SciFi), because it frees the mind to dream and to be far more creative than the “normal” working environment ever allows.
After the film and lunch were over, my mind turned – of course – to business and how I could set my past, current and future clients free too; how to make them more creative as well as more customer centric. So this is what I came up with, far above the clouds and worries of my everyday world.
The future is in our h ands
We are all wise after the event, but how do we become wise before it? In my opinion, by setting free our thoughts about the future and our creativity. Many companies have an innovation group, but rarely do they set them free, to think big, to think out of the box.
In fact in many cases, they are literally put in their own boxes, separated from the business for which they are supposed to be innovating. Whilst the intention of this separation may be laudable – it is claimed that it provides increased freedom – it generally doesn’t work, because the group’s creativity is not grounded.
Despite their incredible creativity, even science fiction writers are grounded; their stories are based on facts, a progression from current actualities to future possibilities. I am not suggesting that innovation be limited to the mere renovation of today’s products and services,but rather that they be based upon a realistic progression of today’s realities, rather than pure hypothesis. In particular, they should be developed out of current sociatal trends, behaviors and needs.
Trend following isn’t creative
Are you following trends? Are you happy with the information you are getting from your supplier? We all love to look at new inventions and products from around the world, but just think about what useful and actionable information you are really getting.
I’m sorry to break the news to you, but you are almost certainly getting exactly the same suggestions as the tens, if not hundreds of other clients your supplier has. Reports aren’t generally personalized, or only minimally, so whatever ideas their reports might spark, are likely to be sparking in every one of your competitors minds too!
So if trend following won’t help your innovation, what will? My answer would be many things; isn’t that good to know?
Develop your trends into future scenarios
Trends do not provide you with a competitive advantage, especially for innovation, so you need to first turn them into future scenarios. There are (at least) two ways to do this.
Firstly you can combine the trends and form what are often referred to as axes of uncertainty. When crossed, these form four (or more) new worlds for you to then define, describe and develop. Your possible actions in each of these scenarios can then be identified, so your business is prepared for all major possible risks and opportunities.
“We must never be afraid to go too far, for truth lies beyond” Marcel Proust (>>Tweet this<<)
The second way is by identifying the major trends that may impact your business and then letting a Science Fiction writer describe the world that could develop. It is not so much a matter of being right as being provocative, the more the better. That’s why SciFi writers are amongst the best people to stretch our thinking. They have the creativity to go far beyond what most of us would think about, even when stretching our thinking. After all, the point of future scenarios is to prepare business for the future, not to predict it(>>Tweet this<<)
Visualise the future
Once you have developed your scenario – or two – you should visualise them to increases buy-in and sharing. This can be through a simple presentation, descriptive profiles or more exciting animations and videos.
Lowe’s has been one of the companies at the forefront of such visual development, using virtual reality to develop TheHoloroom to show what SciFutures‘ science-fiction writers had developed. The room puts consumers into a new world where they can see their own new world, at least of their home after their planned renovation.
Other industries that are quickly developing new virtual worlds for customers include car and plane manufacturers showing future travel options. Car purchasers can also experience their new cars before actually buying them and can help in the development of cars that more perfectly meet their desires and needs.
Innovating outside the box
In too many cases innovation is built upon reality and a company’s current offers, in other words are renovations not innovations, just a step change from what we have today. New products developed using scenario planning tend to be faster, clearer, more efficient, longer-lasting and overall more attractive.
Technology makes what was even unthinkable just a few months or years ago, a reality today or in the very near future. Everything is moving faster and faster, so businesses must do the same. As this is rarely possible, they must already think the unthinkable today, so that they are prepared when it actually happens tomorrow. (>>Tweet this<<)
Are you ready for the brave new world that is estimated to be just ten, twenty or at most just thirty years from now? That’s when the point of singularity is estimated to arrive.
If you would like help in improving your own innovation process, or in developing a future scenario for your organisation, please let us know; we would be excited to inspire you.
C3Centricity used an image from Dreamstime in this post.
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
This Monday is Memorial Day in the US, when Americans everywhere think back to those in the US Armed Forces who gave their lives in the line of duty. I too am thinking back, but to all the marketing plans and ideas that have been sacrificed!
The reasons why some plans are accepted and others aren’t are many. Non-alignment with corporate plans is one of the most usual, but lack of clarity, consistency, preparation or budget are also common. And even when accepted, they aren’t always executed as planned. So I thought that it would be useful to take a look back at our own marketing plans that we set earlier this year and review what is and isn’t working. We still have time to make changes and meet our 2014 targets, so which of the following is your current issue?
Declining market share
Firstly, you should be ashamed that you’ve let your br and slide so much that you are actually losing share! Br and equity measures would have given you a clear warning that something was going wrong, months if not years ago! Did you ignore the numbers or were your efforts too small to have the necessary impact? Either way, it’s time to start working out what’s going wrong. Review the 5P’s of marketing for starters and prioritise actions based on what you find.
Stable market share
So your br and’s growth is slowing? This happens in the normal life-cycle of a br and, so no panic, but you do need to take action to renew growth. But don’t think that small tweaks will be enough. Competition is ruthless these days and you will need to create some buzz around your br and. Surprise and delight is the name of the game to win (back) consumers. Start from your strengths and then ramp one or two of them up a couple of levels.
Since most companies have one product manager or group in charge of each br and, this shouldn’t happen and yet it still does. Multiple suppliers with differing interpretations of the br and promise, and annual revamps of simply the previous year’s work, makes for communications that gradually slip from the original positioning and message. Instead of just looking at the latest or planned communications, it is vital to also review the previous five years’ work. It then becomes obvious how messaging has shifted. (>>Tweet this<<)
Inconsistent product performance
As with communications, most product testing compares current to the proposed new product and sometimes also versus the competition. Unfortunately small changes made can be undetectable to consumers even in direct comparison, or are within statistical errors and so are ignored. But over time, consumers are likely to come to realise that the product to which they have been loyal for many, many years, is no longer what it used to be. Therefore it is useful (essential) to compare product ratings to those from previous years, as well as to the current product.
No emotional attachment
This is a dangerous situation to be in, since if consumers have no emotional attachment to your br and, they can switch without too much thought. In fact your br and is no longer a br and, it’s a commodity! It needs to st and for something in the hearts and minds of consumers, so that they will choose you rather than a competitor. Especially in categories where performance differences are minimal, emotional attachment is what keeps consumers loyal. (>>Tweet this<<)Review how your consumers feel about your br and and what you can do to build more emotional attachment. The stimulation of the senses is a great way to do this. (read more here).
Confusing br and hierarchy
Your line extensions are like family members. There should be a well-defined parent br and and each variant should have clear resemblances to it. As mentioned above concerning product and communications consistency, line extensions can drift away from the look and feel of the parent br and, especially in dynamic categories where innovation and renovation are vital. When was the last time you looked at your whole product range – together? Differences in fonts, colours, sub-br and descriptions and design become quickly obvious. Make the changes needed to get the family back in line.
Hopefully this list has given you some food for thought and ideas on which to take action this week. If you are facing a different challenge I’d love to hear about it and possibly offer you some solutions. Just drop me a line here.
C³Centricity used an image from Kozzi in this post.
A couple of months ago I shared what I consider to be the Ten Mistakes even Great Companies Make when innovating. Whilst it is useful to have these “watch out” lists, I believe it is also beneficial to take a look at how other companies get it right.
This post was prompted by a new client who is one of those already doing innovation extremely well and yet is still looking to improve their thinking. That for me is the sign of a truly innovative company. So read on for some ideas on how you too can become great at innovating.
Set Stretch Launch Targets
Let me start by saying there is a huge difference between the quantity and qualityof innovations in almost all companies. In fact I believe there is an inverse relationship between the two. Those that innovate a lot rarely do it well. I think this is because they have the pressure of meeting objectives of numbers of new launches, rather than numbers of successful launches.
What is a successful launch? For me it is meeting or beating carefully thought through and calculated objectives. Not those wishfully high numbers used to get management buy-in for the launch, nor those ridiculously low targets that everyone knows will be met even before the new product is launched. No, I mean objectives that are stretch targets but achievable with the right plan, actions and effort. In other words SMART.
Be Inspired by your Customers
There are a lot of very clever organisations, especially in the technology area, which develop incredibly innovative products. Apple is (was?) obviously one of these and until recently, was admired for its innovations. Now it has been claimed that Steve Jobs didn’t believe in market research. This is untrue. He did believe in market research, but market research done right. He didn’t ask consumers what they wanted, because he said they didn’t know. Instead he asked them what their problems were, what they dreamt about. He then showed them his answers to these and got their reactions. Even when he got his answers, he didn’t immediately start adapting products to meet these stated needs, but rather worked to underst and what consumers meant by what they asked for. As the infamous Ford quote says
“If I’d asked customers what they wanted, they would have told me a faster horse!”
Jobs didn’t build a faster tape player, or a smaller one, or a lighter one. He made “music on the go” more convenient, more accessible and above all, more fun.
Use a Flexible Approach to Idea Generation
Many companies approach innovation as a strict process. They will use something similar to the below funnel, brainstorming for a multitude of ideas that eventually get whittled down to the one or two new launches that are finally chosen.
There are many companies today offering new processes and ways of innovating, but they all come down to a finite number of alternative levers:
Start from your strengths and / or weaknesses
Start from the strengths and / or weaknesses of your competitors
Extend into adjacent categories
Extend into new channels
Extend into new presentations (packs, prices, communications)
They also use one of three models to reduce their number of possible choices in their selection process:
Start large and reduce down (the st andard “funnel” approach shown above)
Start small and exp and before selecting (inverse funnel approach)
Repeated executions of the combination of the above expansion and contraction of ideas (sometimes referred to as the accordion approach)
Whichever you decide to use, you eventually get to a decision of the one, or few, launch choices, at least in most cases. Truly innovative companies are not limited to one process or tool, and are open to idea generation from however and wherever it might come.
Make Innovation Everyone’s Responsibility
Innovation is for the privileged few in (too) many organisations today. Teams are separated off to concentrate on being “more creative” or to “bond” with R&D. However truly innovative companies use open innovation where everyone can have and share ideas about the company’s process, products and customers. In a great article on this (“ Who blocks innovation?”) Jeffrey Phillips ends with a wonderful short story:
“There was an important job to be done and Everybody was sure Somebody would do it.
Anybody could have done it but Nobody did it.
Somebody got angry with that because it was Everybody’s job. Everybody thought Anybody could do it but Nobody realizes that Everybody wouldn’t do it.
It ended that Everybody blamed Somebody then Nobody did what Anybody could have done”
Great companies are often great because they are very innovative. And they are very good at innovating because of three highly effective habits:
They set appropriate stretch targets for every new launch; good is never good enough
They listen to their customers, but don’t do what they say, but rather what they mean
They open idea generation to be inspired by a multitude of different processes, tools and above all people
Would you add another habit? Have I forgotten an important trait? Please let me know what you would add or feel free to react with your comments below.
C³Centricity used images from Dreamstime in this post.
There have been many attempts to dethrone the blond supermodel doll Barbie over her fifty plus years of existence, mostly without much success. The latest endeavour (named Lammilly, after her creator) is different in that Nickolay Lamm is going after co-funding and has already achieved over $350,000 in just a few days according to the website.
This interesting addition to the “Anti-Barbies” story prompted a number of questions in my head:
Is it wise to go after a declining segment?
What was wrong with Barbie’s customer satisfaction?
Who is the target for this new doll? Child, adult, collector?
Why now, after so many previous unsuccessful attempts at dethroning Barbie?
Those questions and various discussions on FaceBook then got me thinking more generally about innovation and how companies have adapted their processes (or not) to today’s connected world. So here are my thoughts on how NOT to innovate:
1. Change the colour, perfume or taste of your current product and then charge more.
This is what Pepsi did when launching Pepsi Crystal: it lasted less than a year. Interestingly this is also what Apple just did with its iPhone 5C, except it charged less. Again it is already being discounted at Walmart because of disappointing sales, which might just be a good thing for Apple in the long run. Sales of the 5S remain buoyant and any damage to the corporate image caused by the cheaper 5C should hopefully be significantly reduced.
2. Organise an innovation team and provide them with a separate office, ideally far away from the current business.
If this is how you are set up internally, get the team back into talking distance with the rest of the business. Rather than stimulating creativity as it has been claimed to do, by being separated from everyday business concerns, it actually alienates everyone else to innovation and decreases overall creativity.
3. Make sure R&D heads up innovation so your new products can make use of your technical know-how and skills.
Whilst this may result in technically improved products, they are all too often not in line with consumer current needs or future desires. Your research people need to connect with your potential customers regularly so they can be tuned into customers’ wants and current frustrations. Wouldn’t you rather have your R&D developing new products that practically sold themselves? As Peter Drucker said “… know and underst and the customer so well the product or service fits him and sells itself” (>>Tweet this<<). If R&D are in constant contact with your customers, they will always have them in mind when planning their product development.
4. Don’t let people from outside the organisation work on innovation; prefer well-established thinkers from within the organisation, preferably with more than ten to twenty years in the company.
This often happens as the result of a naïve manager lacking the required confidence to accept criticism, to challenge the status quo and to get out of their comfort zone. No person, let alone an organisation, can be an expert in every area. Why not take full advantage of external expertise to catalyse innovation? It’s certainly faster than learning and training the required new skills internally. Just think about how many major Fortune 500 companies have joint ventures: they know something about reaping the benefits of collaboration for a win-win to grow their businesses.
5. Only move an innovation concept forward when it is finalised and everyone in the company agrees with its potential.
If you wait for complete agreement on a new concept, you will never launch any new product. Rather than looking for total buy-in from everyone, accept the proof of a well-documented justification; if it looks and feels right you can learn from in-market measurement once launched to make adjustments. This is the approach often used by many successful hi-tech companies including Apple. Become a beta tester but make sure you fail fast and learn fast (>>Tweet this<<).
6. Follow a well-tested established process for concept development. Take time to ensure everything is working perfectly before launching.
Rigid processes and creativity rarely go together (>>Tweet this<<). Rather than working step-by-step through a st andardised process every time, accept that your approach can and should be adapted to the concept as well as market needs.
Some argue that the more ideas you have the better the winning concept. I personally think that massive numbers of ideas merely dilute both thinking and action. I recommend working through a few potential “promising concepts” with some target customers, to refine and develop the winner. I have found this approach to lead more consistently to a winning concept that customers would buy, as well as far more quickly than any st andard funnel process of proliferation and elimination.
7. Never use social media or test amongst consumers who are outside the control of the organisation, so competition doesn’t learn about what you are developing.
As with no. 4 above, this situation often arises from less experienced managers afraid of being found lacking in creativity. In reality, competition often knows far more about an organisation’s innovations than the majority of its employees do. Therefore test and learn, then test and learn some more, whilst of course making reasonable efforts to reduce any confidentiality risks involved.
8. Never share ideas with anyone outside the innovation team to avoid leaks.
As mentioned in no. 2 above, everyone can be creative and have great, innovative ideas. It therefore makes no sense at all to limit accepted creativity to one team alone. Whilst it is important to have an innovation lead team, all employees should feel encouraged to bring their ideas to the attention of the business. After all, we are all consumers.
9. Only innovate products and services similar to those in which you are already an expert.
This is not innovation, this is renovation. As with no. 1 above, it is unlikely to provide significant growth for a business, but it can satisfy consumer dem ands for novelty until such time as your disruptive innovation is ready. Never accept renovations as a replacement for true innovation. (>>Tweet this<<)
10. Don’t think too far ahead; after all, the world is moving so fast that we don’t know what the future will look like.
Whilst it’s true that the world is moving forever faster, this actually makes forward thinking vital not impossible. My recommendation is to develop future scenarios to challenge the organisation to think through a number of “what if” scenarios so that the business is prepared for multiple opportunities and risks.
These are my ten mistakes that even the best companies make sometimes in innovation. Are you guilty of any of them? Hopefully these ideas will provide you with food for thought as well as possible solutions.
C³Centricity used images from Dreamstime, PepsiCo and Apple in this post.
Last month I invited readers to share some of the problems and challenges they need to address in 2014. I offered a free consultation to one lucky winner who asked the most interesting question, which could also be of interest for me to answer for other readers.
Well, the winner is Jean-Francois (JF) who has just started working with a start-up in the tech and app areas – I feel that’s more and more of us these days, don’t you? His question was:
“I would like to commercialize a new XXX; what would be the right approach to identify the consumer need and then the market potential, considering that the company has very limited financial resources?”
This is a great question and a reminder that not every organisation has access to large market research or marketing departments and extensive budgets. In fact, in many companies these roles are being h andled by one and the same person with very few resources; is that your case? If so then you will definitely find this post of interest, but even if it isn’t, I’m sure you will still find value from the ideas shared.
As I had promised, I gave Jean-Francois a one-on-one consultancy which ended up lasting several hours, as he had planned well for our session together. He also happens to be really passionate about his innovative idea, as well as in finding solutions to all his challenges.
The product JF and his team want to launch doesn’t exist on the market today, although there are some products which are unsuccessfully trying to address the perceived customer need. The proportion of product launches which fail every year is generally “accepted” to be about 95% – although why companies continue to accept such levels is beyond me! With such odds, I think it is incredibly courageous to start a whole company based around just one new product idea, but that seems to be the norm in many areas today.
Let’s start by taking a look at some of the reasons new products fail and identify ways to reduce if not completely eliminate them for your next launch.
The process itself: Innovation is by definition a creative process, but many organisations use a well-worn, restrictive and uncreative process to develop their new products. They are at best most likely to come up with renovations than true innovations. The solution is to introduce some creativity into the process, and why not include potential customers in the process too?
Meeting company quotas: It is surprising that with such miserable statistics concerning the likely success rate of new products, that so many companies – and which shockingly include many of the largest CPGs around – fix quotas on the number of annual new product launches. How crazy is that?! It just encourages too many new products to be launched too early, and almost guarantees failure! I believe it would be much better to seriously limit the levels of acceptance amongst all new product ideas proposed in any year, then only the best would get through.
Lack of customer underst anding: This is most likely one of, if not the most important reason for new product launch failures. And I don’t mean that you should ask the customer what he wants, he doesn’t know until you make it available to him in many industries. No, I mean starting by looking at a customer’s lifestyle and seeing how you can make it easier and more enjoyable for them. If you already have a new product idea, which was the case for JF, then consider how it would make the customer’s life easier or better. If it doesn’t, then you perhaps need to reassess its market appeal.
Lack of category underst anding: This follows on from customer underst anding, in that you need to identify how the customer is currently working around or compensating for their need today. Don’t assume you are competing in a certain category until you have identified what the customer is currently doing or using. That is the way to identify your true competition.
Not living up to your promises: If you promise a better, cheaper or more enjoyable experience, then customers deserve to be able to confirm this if they buy. Especially in today’s connected world, if you disappoint by not meeting customers’ expectations, your product will fail even more quickly than in the past, since early-adopters will Tweet or leave comments on Facebook, Blogs or other social media platforms for all to see.
Not being sufficiently differentiated: Following on from living up to your promises, customers need a reason to change behaviours, and depending upon the category this can be costly, whether in time, money or effort. Many customers prefer to continue buying an inferior product or service than making the effort to change – think Telecom, Banking, Hotels, Air travel or Insurance as some of the most typical examples of such industries. These businesses are in a constant battle to differentiate themselves and provide a real advantage to attract new customers.
Being too different: Whilst not being sufficiently differentiated can be a certain cause of failure, being too new can also meet with no success. The reason for this is that if customers are totally unfamiliar with the new product or service offering, you will need to spend considerable resources to educate them. If you are unable or not willing to invest the time and money in doing this, then you will undoubtedly fail to attract more than just a few customers who take the time to underst and what you are offering.
Pricing yourself out of the market: Here I’m not just speaking of pricing your product too high; being too low can also negatively impact your likely success. Underst anding how much potential customers value your offer to essential to the success of any product. Getting it wrong can result in lost revenue or worse a promotional spiral leading to br and hell (read more about this in “Are you on the way to br and heaven or hell“)
Inappropriate distribution: This can be the consequence of an incomplete underst anding of your customer and is also linked to differentiation. Whilst you can just follow near competitors into their own distribution channels, why ignore the possibility of being available where and when your customer might buy it most? By reducing the effort necessary to change their habits and buy, you can attract more potential customers to at least try your new product.
Being too far ahead of the customer: There are many examples of great products that were ahead of their time. Gillette brought out 2–in–1 shampoos with conditioners included in the early 70’s, but they were a dramatic flop. Ten years later most personal care manufacturers offered these products, and were met with huge success, even if such products have gone out of fashion somewhat since then. It took Nespresso almost twenty years to become profitable and Philip Morris has needed similar levels of patience for their most infamous of br ands Marlboro, in many markets. If you can’t afford to wait for your customers to catch up with your new product idea, then you should certainly reconsider your launch decision.
These are ten of the most common reasons for new product launch failure. Which do you think is most prevalent in your own company? What are you going to change to increase the success of your own new products? Is it some other reason altogether, that I’ve missed? Let me know and share your thoughts below.
Coming back to JF, most of our time together was spent discussing ways to collect information on many of the above points. As he has little budget for extensive market research, it was important for him to find other ways of gathering the much needed information and not to just bypass that stage; perhaps many people don’t bother to search out the information they need to truly assess the likely success of their new product, which would explain the high failure rate mentioned above.
By the end of my session with JF, he had a clear plan of action and I have since heard that he is progressing incredibly fast, so watch this space for an announcement concerning the launch of his new device.
I will be sharing the tips I gave him in a future blog post, but in the meantime feel free to continue sending me your own questions; I’m always ready to have a short Skype or phone call to assist you with your own marketing and innovation challenges.