Customer Innovation

Delivering a Customer-Led Strategy for Sustainable Growth

Marion Debruyne, Koen Tackx

• Publisher: Kogan Page
• Year: 2019
• ISBN:
  9780749484194
• Edition: 2
• Topic: Negocios y empresa
• Subtopic: Estrategia empresarial

WINNER: CMI Management Book of the Year Awards 2015 - Innovation and Entrepreneurship Category (1st edition)Many organizations approach customer-centic marketing and innovating their business strategy in isolation to one another, missing groundbreaking opportunities for advancement. Customer Innovation, second edition, turns this on its head by starting with the customer, innovating around their needs, then building a customer led business strategy around it. It presents a well-constructed three-by-three formula of connect, convert, collaborate, laying the foundations for innovation and change, to improve the current customer journey and expand into new customer horizons. This enables new product and service development to flow with outstanding efficiency and substantial growth. Customer Innovation, second edition, includes exciting updates around co-creation and the benefits of involving customers, stakeholders and employees from the beginning. It provides guidance on using technology to reinvent traditional business models, with consumer needs at the heart. With a spectacular range of case studies, including Disney, LEGO and Johnson & Johnson, all delivered with active takeaways, this is the ultimate handbook for any leader, business or marketing strategist, ready to pave the way in a new era of customer led strategy.

PART ONE

The zoom lens

Laying the foundation for outside-in strategy

01

Connect using the zoom lens

Five practices to zoom in on your customer

You can observe a lot by just watching.

YOGI BERRA

Figure 1.1

At a country fair in 1906, the British scientist Francis Galton performed an experiment at a weight-judging competition. An ox was displayed and the visitors were invited to estimate the ox’s weight, the best guess would win the competition. A total of 800 participated in the competition, a mix of experts (butchers and farmers) and non-experts. The average estimate was (surprisingly?) almost perfect. Whereas the actual weight of the ox was 1,198 pounds, the estimated average was 1,197 pounds.¹ This story illustrates the wisdom that a large number of people have, as without any tools they are able to address a complex problem with scientific precision.

The zoom lens contains the narrowest but most in-depth view. It is where we zoom into the company’s current customer base with intense focus. The first step of the connect–convert–collaborate process is connecting with customers, geared towards developing rich customer understanding and insights. As important as this process may be, it is still a process that companies struggle with. For example, 63 per cent of chief marketing officers (CMOs) admitted that they needed better capabilities in developing voice-of-the-customer insights.²

In the following sections we present five different practices that can help you to engage better with your customer base to get the maximum insights:

1. Feedback loop from customers. The first practice is about enabling a constant feedback loop from customers into your organization. With this, the company enables a dialogue between customers and the company that allows it to listen to their input on a continuous basis and immediately integrate what is learnt.
2. Immersive customer understanding. This is about getting close to customers within their own environment. The strongest insights often do not come from studying survey reports about customers, but from understanding the real-life situations of customers. It is only when we immerse ourselves in our customers that we uncover rich insights that reflect their context: their business, their processes, their life, their behaviours…
3. Using all the information you have. Companies often have more information about customers than they realize. The key is to discover all current (and potential) sources of information and unlock their potential. Often, this also means creating new platforms and processes to generate new sources of information.
4. Customers as a source of ideas. The best way to make sure that customers have a voice in the company’s strategy and actions is to use their ideas to shape your own. Here, we involve customers in the idea-generating process directly.
5. Customers as developers. Customers often create solutions for their problems or adapt products to better suit their needs. In essence, this means that customers take up the role of developers. Smart companies tap into the opportunity to use these ideas and engage customers as developers.

Below we go deeper into each of these practices, explore what they entail and how companies deploy them.

Establish a feedback loop from customers

Outside-in organizations are customer obsessed in that they are constantly looking for ways to learn about their customers. They develop a constant feedback loop with customers, which encourages them to share their comments and experiences so that the company can build customer feedback into its daily operations and continuous improvement efforts. What a company learns through the constant feedback loop focuses everyone in the organization, on understanding customer needs and improving the customer experience.³ Ultimately, the focus on customers gives direction to the company’s strategy and priorities.

The first step is to open up the channel of communication with customers. This involves soliciting feedback (through surveys, interviews, focus groups, etc) and collecting unsolicited feedback from customers, including monitoring channels you do not own yourself. Customers constantly provide unsolicited and honest feedback through e-mails, chats, service calls, posts on social media, etc. Sometimes they direct that feedback directly to the company, using the channels that the company makes available, but they often do not directly contact the company. They may provide a reference for a colleague, vent their irritation on Twitter, etc.

You need to make sure there is a way for customers to easily pass on their feedback to the company. The goal is to encourage and foster customer feedback rather than trying to minimize it. Lowering the threshold means opening the gates of communication and making it convenient. Outside-in organizations use every channel possible to capture the feedback from customers. They actively solicit feedback and work to remove barriers for spontaneous feedback, instead of trying to limit the extent of engagement. By using multiple channels they create more opportunities for customers to interact with the company. That interaction in and of itself already has immediate benefits for the company. For example, research has uncovered empirical proof that customer engagement and participation in online interaction about a brand successfully drive immediate sales. The mere fact that someone said something about you increases that person’s likelihood of buying from you.⁴

A first opportunity to learn from customers is by exploring the spontaneous feedback they give through the channels that the company provides such as customer service calls, chats, complaint e-mails, etc.

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CASE STUDY Delivering happiness at Zappos⁵

Customer service king Zappos provides a good illustration of how to gain value from fostering direct customer interactions. The online shoe retailer is renowned for its focus on customer service and its legions of loyal fans as a result. Chief executive officer (CEO) Tony Hsieh sees the people manning the call centre as an important tool to open up the conversation with customers. Instead of automated menus, real-life customer loyalty agents answer customer questions – no matter how long they take – 24 hours a day, 365 days a year. Instead of hiding its free phone number somewhere in small font on its webpages, it makes sure it is easy for customers to call by prominently showing it on the front page. Call-centre representatives do not work with standard scripts but are trained to engage in a genuine conversation with customers. Customers are encouraged to call the company, because Tony Hsieh believes it to be a great opportunity to develop a personal connection with the customer. The telephone is seen as a unique communication channel, where you have the undivided attention of the customer: rare in a world of information overload. The online shoe and apparel retailer tracks the record length of its calls. The record set on 11 June 2016 on the longest service call was a conversation that lasted 10 hours and 43 minutes.⁶

This very long call was not a personal initiative or a stand-alone event – the customer focus is embedded in the processes and culture. As the Zappos customer-loyalty team supervisor commented after a previous record-length call: ‘Zappos’s first core value is deliver wow through service, and we feel that allowing our team members the ability to stay on the phone with a customer for as long as they need is a crucial means of fulfilling this value.’⁷ As stories like this are shared across the globe, Zappos’s reputation for being a customer-friendly servi...