Mark Chinn, partner at CMG Partners, offers advice on how keeping your customers close will improve your new product development
There is an unprecedented level of customer interaction through the web, social networks and mobile apps. There’s also an increasing amount of dialogue about this customer interaction and its impact on marketing, customer service and billing; but how has customer engagement changed new product development (NPD)?
Our recently released CMO’s Agenda report delves into this topic by interviewing a number of marketing, product and innovation experts about how they carry out NPD by tapping into their customers.
There has been a common model of exploration that product innovators use to examine the market; it involves looking at the customer, competition and internal capabilities. For many companies, the balance has shifted to the customer as a primary source of intelligence and input for NPD. Through our in-depth interviews with practitioners, we found that by maintaining a continual conversation with the customer, companies are transforming their NPD process.
At a high level, there are two basic formats for customer engagement: 1) large forums and customer data capture and 2) targeted, ongoing customer advisory groups. Let’s take a look at casting the widest net first:
Large forums and data capture
Crowdsourcing
Crowdsourcing can be spontaneous or deliberate. With crowd sourcing, companies take advantage of broad interaction with the public, usually over social and digital media. Companies like Lego and Dell are renowned for their specialised websites that elicit votes and comments en masse for product usage and new product ideas. Crowdsourcing can be seen as a version of ‘beta testing’ where companies measure the market to shape their product and its launch.
Social listening
Social listening can be an efficient tool to capture real-time feedback for a new product or service. Patrick Vernon of the University of North Carolina’s Kenan-Flagler Business School described a very agile approach presented to his class: “A visiting CEO once outlined their approach to social listening. After launching a release at 1:00am, they would watch Twitter and people would either complain about it or love it, and based on that input, the company would iterate. By the time the rest of the world woke up, this company would already have something like the fifth iteration of its product.”
Customer interaction data
Chris Jo, general manager and head of global services for Samsung, says his team leverages data and interactions with customers in multiple ways: “We have a unique channel, the Samsung app store, where people can comment on our products and we can actually engage with them through comments. It’s not just one way, we strive for two-way communication so we make sure we really understand what our customers want.”
Targeted advisory groups
An approach with a smaller, more targeted audience can be a better fit for B2B businesses that typically have longer-term relationships with customers. We recommend four rules for customer councils:
1. Make sure you listen to your customers with a very open mind and encourage them to be honest about what they think.
2. Be transparent about what you share, allowing these key customers to really understand the new product.
3. Develop a cadence for customer interactions that maintains engagement but doesn’t become onerous for customers.
4. Whether or not you act on individual or group input, demonstrate respect for customers’ ideas and transparency in your vetting process. Most customers will appreciate having a voice and understanding that they’re a critical component of the process even though every idea won’t be adopted.
Product advisory councils
Product councils can be an effective method of tapping into a firm’s power users and most engaged customers for new product insights. Ravi Shankar, VP of product marketing for Informatica, describes its approach: “Last year we ran about five different product advisory councils. These are key customers who are leveraging our product in a very successful manner.”
Key opinion leaders
Key opinion leaders can be customer experts, industry gurus, or writers and media personalities. Most often their independence is key to their level of influence, so their endorsement must be earned. K2M is a manufacturer of highly specialised spinal correction devices and it works with a set of select surgeons it calls key opinion leaders. K2M works very closely with these customers to gather practical and conceptual feedback on its ideas. K2M feels it develops better products, and fosters influential advocates when it brings a new product to market.
Customer forums
Thomson Reuters Tax & Accounting has recently gone through a transformation in its market approach. The main change is to collaborate more closely across functions, but the company is also becoming more proactive about capturing early customer and industry feedback. CMO Tobias Lee explains: “[Our customer forums are] a hybrid of a controlled release and a show-and-tell. We hosted a series of customer forums to gauge reaction and interest, but also to validate whether we were directionally correct with our approach.” This customer focus has led Thomson Reuters to design products that meet customer needs surfaced through the forums.
Throughout the innovation process, be sure your product marketers are looking at ways to identify and validate product innovation with insight from customers and prospects. By creating and fostering a continual conversation with the customer, marketers will deliver more effectively on customer needs, gain competitive advantage and strengthen key customer relationships.
