Outside Innovation - Page 4
Case Study #6 – Koko Fitness
2. The five steps of customer-led innovation
Once you realize how inventive your customers naturally are,
you then need to find ways to harness that resource to power
your corporate growth. There are five steps involved in taking
advantage of customer-led innovation:
The five 1 Identify and watch your leading customers
steps of 2 Provide your customers with tools to use
customer-led
3 Build and nurture customer communities
innovation
4 Empower customers to show off their stuff
5 Let customers engage in peer production
5 Steps of Identify and watch
Customer-Led Innovation 1 your leading customers
The fastest and best way to innovate is by harnessing the
creativity and ideas generated by your smartest customers – the
ones who are passionate and knowledgeable about your field. If
you watch these customers using your product or service in their
normal contexts and talk to them about what they’re actually
trying to achieve, some very valuable insights can result.
With a little luck, you may find you can let your best customer’s
inventiveness drive your business forward. Probably the best
way to actually do this will be along these lines:
1. Study how customers are acting “in situ” – that is how they
actually use your product to try and achieve their aims. Watch
what people are doing in real life situations. Instead of asking
“What do you want from us?”, focus instead on the answers
to: “What are you actually trying to achieve here?”
2. Immerse your entire organization in deep knowledge of the
customer – most likely by making everything you know
available through a Web site. Some companies put pictures
of actual customers on the walls of their offices. Others
develop “personas” – profiles of typical customers – and
circulate these to everyone.
3. Work to discover what people care about most passionately
– rather than simply what they like or dislike about your
offerings. Understand what they want to do and where their
emotional connections lie.
4. Look at what you can do to streamline those customer-critical
scenarios – how you can better help them achieve their
goals. Obviously if you know what your customers are
actually trying to do, you can then think creatively about how
you can simplify the way they achieve that using your
products and services. This may involve fundamentally
redesigning your business processes or even your entire
business model. If that’s what’s needed, make it so.
5. Let customers co-design their ideal scenarios and solutions
– and get them involved in designing products they will love.
6. Build your brand around the customer experience you
provide – because from a customer perspective, the
customer experience is your brand. Ideally you want your
brand promise, the customer experience and the customer
scenarios to align and match up. When that happens, you
create a business that can go from strength to strength on the
basis of creating highly satisfied customers.
Koko Fitness is a start-up which introduced its first product in
spring 2006. The company develops integrated software for
exercise equipment. Customers are issued with a key which they
then plug into the fitness equipment when they go to the gym.
The Koko software tracks the person’s fitness program and
automatically configures a personalized training program which
will help them meet their fitness goals. Progress is then tracked
and the person’s training program is modified based on progress
to date.
Case Study #7 – Zopa
Sometimes described as the eBay of banking, Zopa is an online
business (based in the United Kingdom) which allows would-be
borrowers and would-be lenders to find each other. Most of the
borrowers are self-employed businesspeople who don’t meet
the traditional requirements of financial institutions. The lenders
are people who want to lend money to help others meet their
goals while at the same time still getting a reasonable return. As
of April 2006, Zopa has arranged more than 63,000 loans,
garnered loads of positive press attention and secured $15
million in venture capital to launch in the United States.
5 Steps of Provide your customers
Customer-Led Innovation 2 with tools to use
If you can make it easy for customers to design their own
customized solutions based around your products and services,
then you can learn what they really want to achieve. Usually the
best way to achieve this in practice is to provide customers with
design tools they can use for themselves without needing any
input from you.
Providing a toolkit customers can use for themselves has some
tremendous advantages:
n You transfer to your customers what is often the hardest step
in any product development program – specifying exactly
what people want or need.
n You allow customers to create highly tailored and customized
solutions which leverage your know-how and their in-depth
subject knowledge.
n Many customers appreciate a self-service option.
n Your own employees can use these same tools to create
customized solutions for others.
n You end up with something which is customer configurable
and made-to-order – both qualities which add value.
These co-design tools can take many different forms, depending
on your line of business. Some common options include:
1. Configurators – interactive software programs which enable
customers to use successive sets of menus to decide on the
optimal solution for them.
2. Do-it-yourself construction kits – where people can take
parts or components and assemble them in whatever
combination they prefer.
3. Do-it-yourself workshops – where you teach customers how
to make their own things.
4. Co-design tools – where people participate in activities which
end up articulating their vision of a perfect solution.
5. Knowledge-based platforms – which allow customers to
come up with workable products without needing to know a
lot of background information.