Innovation has been an obscure business buzzword for yonks; however, a systematic analysis of customer feedback can bring innovation to life. We recommend using a framework which allows you to categorise customer intelligence along three levels of innovation (incremental, substantial and radical) and across different dimensions (as shown in the diagram above).
1. Incremental innovation
No one is better positioned to comment on specific features of a product or service than the customer. This feedback stems directly from “the horse’s mouth”. Of course, such an approach must be used judiciously rather than blindly followed, keeping in mind it is impossible to be everything to everyone.
Example: A major North American telco discovered the importance of reducing customer effort and subsequently reducing churn: by placing further emphasis on their processes they gradually but significantly improved issue resolution and achieved a greater focus on forward solving.
2. Substantial innovation
Feedback that leads to substantial innovation is holistic and focuses on overall usability and performance of a product or service. It provides indirect clues about wider customer expectations leading to substantial actionable insights which may require a revaluation of business strategy. Belief System Analysis, or BSA, is a handy tool which helps you go logically beyond the tip of the iceberg and understand the underlying assumptions behind what your customer is really trying to say.
Example: When the American Banking Sector decided to tap into the Hispanic market they realised they had to reposition their overall strategy which involved completely reinventing their processes and communications systems.
3. Radical Innovation
Customer feedback gathered during the development cycle increases a new products chance of succeeding in a competitive market. This feedback, and the ideas within, lead to products which excel and rise above the competition.
The aim of the feedback is not to determine market interest, although it is a by-product of the process: the main objective is to use customer feedback to shape and define product development.
Example: As Henry Ford said “If I’d listened to customers I’d have given them a faster horse”.
What are your thoughts on companies that are using customer engagement solutions to drive innovation?
Kareena Uttamchandani