This is the third in the ongoing series, “Product Innovation” co-authored by Andrew Brown and Simon Brightman.
In the first article of this series on Product Innovation, we identified the three things that businesses need in order to create and sustain innovative products: 1) clarity of purpose - i.e. knowing what’s really important for the company to thrive; 2) clarity about the processes used for executing on what’s really important; and 3) clarity about how resources should be deployed for achieving what’s really important.
In this article, we focus on clarity of process – a key element critical to developing innovative products that are well received, timely and profitable. We draw upon the insights from leading product innovators Aeroplan, Starbucks, Microsoft Canada and ING DIRECT, all of which have successfully tackled a challenge that is fundamental to creating innovative products: introducing effective processes for integrating customer input. We also provide a proven framework that is built on the experience of successfully bringing innovative products to market.
Creating new products requires an efficient process for effectively integrating customer input. But companies continue to be frustrated about how to best leverage customer input. What makes this surprising is that over the last three years, businesses have enthusiastically invested in social media tools. Part of the rationale for that investment has been to have the means to solicit, customers’ thoughts about their products, brands, competitors and purchase intentions.
Barriers to Using Customer Input
According to Jeff Hendler, from the think tank, the Product Accelerators, “Barriers that commonly hinder companies from harnessing the power of customer input in developing new products or product enhancements include concerns over the following:
- That customer feedback will distract rather than hone product/service offerings;
- The expense involved in gathering customer data;
- How to deal appropriately with negative feedback;
- The disparate nature of customer feedback;
- Maintaining customer privacy; and
- Disclosing product information that is a competitive advantage”
At the core of these issues are three critical questions that all companies need to address:
- When should customer input be collected for developing the best products?
- What customer input should be collected for developing the best products?
- How should customer input be used in developing the best products?
In order to answer these questions, companies need to integrate easy-to-develop processes into their product innovation cycle.
Guidelines for Integrating Customer Input
Those responsible for owning product development can develop processes to address these core issues by: following three key customer-product feedback principles and applying a straight-forward framework for leveraging customer input.
Customer-Product Feedback Principles
Principle #1: Customer feedback is not a one-off initiative. Developing a product that is embraced by customers is on-going and requires continuously revisiting and verifying assumptions about the product and the core need it fills.
Aeroplan’s VP, Marketing David Klein knows the power of gathering and integrating customer input. The loyalty leader recently launched a “last minute travel tool” that allows members to book flights with as few as 14 days notice. According to Klein, “One of the primary reasons that the tool has been so enthusiastically embraced across Canada is because we established mechanisms to truly listen to customers.” For a start, that meant reviewing the data which revealed that its members booked almost 25% of their flights within two weeks of travelling. But Aeroplan has gone several steps further. For example, Klein reveals that Aeroplan “maintains and nurtures a growing group of committed customers who regularly provide insight into the reasons behind their thinking, feeling and purchase decisions.” For Aeroplan, the benefit has been tangible: a 15% increase in purchases attributable to the new customer-focused product following its launch.
Principle #2: Build life-long champions. Collecting customer input into the development of a new product provides every company with a powerful opportunity to build enthusiasts and advocates. At the same time, gathering product-related customer input is not meant to replace market research but rather focuses it on something that is tangible and something that customers can easily relate to.
Few companies are more committed to building long-term customer relationships by leveraging feedback than Starbucks. The Seattle-based coffee chain recently launched its new loyalty program, My Starbucks Rewards. According to Matthew Guiste, Director, Global Brand Loyalty, its roots were largely based in customer input, “For over two years, we had been collecting customer data on how and when over one million members make purchase choices through a previously rolled-out loyalty program. The newly launched My Starbucks Rewards program was made possible because we continuously engage with customers to gather their input.” At the same time, Starbucks gathers and evaluates product ideas put forth by enthusiastic fans and shared via the Starbucks site as well as on users’ own blogs and Facebook pages.
Another leader in its approach to integrating customer input is the financial innovator ING DIRECT. With a core mandate of “helping Canadians to live their day-to-day lives better”, the company has leaped ahead of its competitors by actually making it mandatory for executives to regularly listen to, and converse with, customers. According to CEO Peter Aceto and Head of Digital and Interactive, Mark Nicholson, that means “the most senior professionals at ING DIRECT spend time reviewing actual comments taken from the company’s call-centers” — and participating in customer support.
Principle #3: Be transparent about your motives. Gathering useful customer input means that you must be authentic to customers/would-be-customers about what information you are collecting and how it will be used.
Few brand names carry the weight worldwide of Microsoft. In bringing to market its new enterprise product “Office 365″, the company openly solicited customer input, making it clear that the purpose was to develop something that would be in sync with the latest technology and fulfill key needs of its target market. According to Eric Gales, President of Microsoft Canada, “This powerful product was configured by listening carefully to customers’ needs for robust security, every-day reliability and user productivity.” In other words, “rather than getting swept up in a battle of features in a very competitive market, we took the high-road: focusing on our market and what was important to them”. Gales continue, “the only way that we could ensure that we had an accurate reading of what customers wanted was to be completely straightforward about why were collecting their input.”
These principles, when coupled with the following proven “3 W’s Framework” allow all companies to establish processes to help them effectively leverage customer input for developing innovative products that are timely, profitable and valued.
The “3-Ws” Framework for Leveraging Customer InputTM
|What customer input to collect||Identify the core customer need that must be filled||Verify that customers’ needs have been translated into features that make sense to them||Confirm that the product messages and channels used create a positive association and compelling reason||Review usage patterns of the product as well as the reasons why customers did or did not choose your product|
|How to weighcustomer input||The degree to which the customer input propels you to innovate||The degree to which the customer input keeps you focused on solving the core need||The degree to which the customer input provides insight into their actual behaviours||The degree to which the customer input answers how and why they purchase/use your product|
|Whereto cost-effectively collect customer input||Identify representatives of the most desired segments and engage in personal discussion||Use small groups or crowd-sourcing||Use social media tools at key online/offline venues and post-purchase questionnaires||Use data collected throughout the process to define or further refine key segments|
The Product Accelerator “3-W’s Framework for Leveraging Customer InputTM“ (2012)
Next in the Product Innovation Series: Piloting
In the next article in this Product Innovation series, we identify how some of North America’s leading companies ensure the right products are brought to market by implementing another key process: piloting products. We gather insights from Michael Wexler, VP at Radialpoint, Chris Perretta, CIO at State Street, and Mark Wilson, COO at Envision.
For over 15 years, Andrew Brown has developed successful online/offline marketing strategies to help companies across industries increase revenues and enhance their reputations. He has brought to market over 150 products in over a dozen industries and implemented effective client referral programs. He is also author of the popular social media series, The LinkedIn Diaries.
Simon Brightman is a senior product executive with experience leading multiple innovative e-commerce teams and bringing products to market over for over 10 years. He serves as the Director, Product Management (Loyalty Currencies) at Points International, overseeing the firm’s $150M (B2B and B2C) loyalty-marketing product line.