Innovation is hard. Let your customers help

Contrary to popular mythology, real business innovation isn’t about the new and the novel, but the relevant and the useful. And the best way to be relevant to your customers is to intimately understand them.

Real innovation isn’t about the new. It’s about the relevant and useful.

Unfortunately, while most business leaders like to think they know their customers, many are really just guessing. This newsletter is about finding practical ways to tap into your customers so you can increase your odds of making things they want.

The sources of real innovation

Fortunately, bringing customers into your development and innovation processes is easy, and there are many ways to do it. Some require an investment of time and resources. Others leverage data that you probably already have. Here’s a run-down of commonly-used techniques:

  • Customer interviews – Nothing beats direct customer contact to help you understand the lives and attitudes of customers, where you fit into their lives and where you don’t.
  • Surveys and questionnaires – Surveys and questionnaires are an effective and cost-efficient way to gather opinions and insight from large numbers of customers.
  • Social media monitoring – Blogs. Twitter. Facebook. MySpace. LinkedIn. Community sites. Product review and rating sites. Monitoring the social web is a great way to learn what people are saying about you and your competitors. And the explosion of social media has brought with it an explosion of customer insight for you to mine.
  • Web analytics data – Your web traffic data yields precious insights about what your customers like and don’t like, where they’re struggling with your product or websites, who they are and how they’re finding you. Chances are you already have this information. Are you using it to the hilt?
  • Customer service logs – This is data that most companies already have but don’t utilize. Talk to your customer service manager to find out what customers are saying. Usually, there are five issues that customer service reps hear over and over again. Find out what they are and do something about them.
  • Customer feedback forms – More and more organizations are including a prominent customer feedback form on their websites and products. If you don’t have one, add one and watch for the feedback patterns that develop.
  • Third-party research – Research firms like Forrester, eMarketer and MarketingSherpa produce mountains of great research and customer insight every year. If you can’t do your own research, buying it can be just as valuable.
  • Paper prototyping – Prototyping is a way of quickly visualizing new ideas on paper, and then showing them to customers to get their reaction. Prototyping lets you inexpensively test and refine new ideas early in the design process, prior to investing in costly programming and development.
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    I’ll involve my customers…next time

    While most business leaders recognize the value of customer input, the time and cost implications cause many of them to keep putting if off until “next time.” But the cost of deferring customer involvement can be much higher. Here’s a recent example from our own experience:

    A global financial services firm was developing a software product for financial analysts. Time was of the essence, and they felt they couldn’t slow down long enough to interview prospective customers. Fortunately they changed their minds.

    When the firm spoke with their customers, they learned that for certain tasks most analysts resolutely preferred to use their own Excel spreadsheets over third-party products. This practice was long-standing and not going to change anytime soon. This knowledge allowed us to accommodate the practice into our product experience, rather than supersede it as originally planned.

    We uncovered many more valuable insights from these interviews, but just this one helped us avoid a disastrous rejection of the product and a painful and expensive trip back to the drawing board.

    Let your customers show you the way

    The most important decision you’ll ever make as an e-business leader is not a technology decision or a hiring decision. It’s the decision to open and maintain a dialogue with your customers.

    The difference between innovating with customer input and without it is like the difference between investing soundly for retirement and playing the lottery. While your competition puts off customer input until tomorrow, you can be profiting from it today.