by: Chris Lawer
Despite the favourable evidence, many managers stay true to their belief that customers are incapable of contributing much of significant value to a firm’s innovation activities (how often have you heard the “but no customer ever invented the Sony Walkman!” retort). They contend that customers cannot envision new products and services because their eyes are permanently trained on the rear-view mirror. In other words, they are only able to define their needs and requirements in terms of what is currently available on the market. Companies who avidly “listen to the customer”, the argument runs, will limit themselves to bland, low-risk and incremental innovation.
Whilst slavishly listening and responding to every dissatisfaction and whim of the customer may indeed limit a firm’s innovation potential, the “Ignore the Customer” school of thought tends to miss the point. To “open your borders” to customer innovation requires seeing past their sometimes short-sighted and superficial inputs. It means asking them different questions, devising new assumptions and finding alternative ways to continuously learn about their problems and unmet needs. As George Day writes in Market-Driven Strategy (highly recommended), these critics often fail to recognise the difference between asking customers to identify problems and expecting them to come up with solutions. It is true that 15 years ago, most customers were not demanding books over the internet, downloadable music or in-car navigation systems. Yet there were ongoing problems and limitations to be solved, as well as deep-seated, latent needs to be uncovered and satisfied – otherwise these innovations would not be as successful as they are.
OK, not all customers are equally blessed with the brains (or even the motivation) in the innovation department. Yet every company will have at least some customers that possess a deep understanding of their products, and maybe even those of their competitors (the trick is to find them through advanced segmentation approaches). And nearly all customers will have some opinion on a recent experience they have had, whether good or bad. In fact, every day, customers (and "prospects" for that matter), are trying to tell businesses how to serve them better. Through the questions they raise and the problems they report, companies are already sitting on a potential goldmine of proprietary, useful, customer intelligence.
But if firms are not tapping into this rich resource, could it be that their CRM systems are holding them back? Perhaps they are not capable of sensing, interpreting and acting upon customer knowledge? Maybe managers do not see any value in investing in their customer interactions to source useful learning about the market? Rather, their emphasis is primarily centred on maximising efficiency and cost-limitation? Then again, maybe IT departments are not actively exploring, developing or deploying technologies that support real-time customer experimentation and innovation, multiple hypothesis generation and testing, open dialogue and advanced customer questioning? Perhaps the customer interface is more akin to a form of border control and is actually limiting the free and open passage of customer ideas and insights into and out of companies? If you're a manager and the answer to all these questions is a resounding “yes”, I suggest that you are probably gazing at that rear-view mirror just a little too much as well….