Gaining Customer Insights – the Creative Way

Finding out what customers want is a fundamental aspect of innovation. However, it’s one of those things that is easier said than done. Customer surveys and focus groups have proven ineffective in most cases and bad data can be worse than no data.

Gerald Zaltman in his book, How Customers Think states, “The correlation between stated intent and actual behavior is usually low and often negative.” He tells a chilling tale of a household appliance manufacturer whose market research showed that 60% of customers were likely to purchase the new appliance. A year later the actual results were that 12% had actually purchased and the customers were unable to explain their reasons for not buying. Imagine gearing up sales, marketing, manufacturing, distribution and service for a new product and being off by a factor of 5!

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So how do you gain true customer insights? We thought this would be an interesting question to explore to see what you’ve done and seen done. One example we’ve seen recently is Staples’ InnovationQuest. The nationwide quest for simple new office products was launched in 2003 and prospective inventors had until November to submit their ideas. To enhance participation, Staples offered a $25,000 prize to the top winner and $5,000 for the other eleven finalists. Additionally, the winner would receive royalties if the product was produced and sold by Staples.

The very process of launching the InnovationQuest created positives… in addition to engaging people (and most likely, customers) with Staples, the inventions submitted would highlight perceived problems. This week Staples announced the twelve finalists out of 8,000 entries and invited the world to judge them. The voting process invites other customers into the mix and their votes are another way to get feedback. I’m not sure that the inventions include any blockbusters such as the Post-It Note, but the value is in the customer feedback rather than the actual new products ideas submitted.

So, tell us what you’ve seen in the way of gaining customer insights. Please add your experiences and insights to the comments section.

Comments

[Tim Ogilvie]

I have used focus groups, surveys, direct observation, but by far the most valuable customer insights I received were from fielding a handful of prototypes. These were truly homely creations that were barely functional (I won’t bore you with the specifics). The engineering team had to be cajoled into making them, and they were immediately disowned. Except by the handful of pilot customers, some of whom were family members. Of course what happened is that some pilot customers even surprised themselves with the ways they did and didn’t use it. Dramatically affected the innovation process. Since then, I have sought – and sometimes found – ways to prototype even purely conceptual innovations that have functioned as “concept cars” to elicit tryout and feedback.

[Christopher D. Coppola]

I've been lurking silently in this community for a couple of years now & this is my first contribution back. Thanks for all you do.

I'm president of the r-smart group, a technology services company company serving higher education. In the recent past I would have described us as a software company. In fact our chairman started the commercial software business for major systems in colleges and universities in 1968. It is the shift from being a software company to a services company that describes our shift in gaining customer insights. We have embraced open source software as a core part of our business strategy. Our offerings have shifted from software (intellectual property) that we own and sell to support and packaged solutions around software that our customers are already building. So rather than finding ways to collect information about what our customers need and then trying to build something as a result, we're doing that with them as a part of one team. Taking the ownership issues out of the equation creates a safe and open environment to share ideas (and code). The model so far is to get involved and help them build it, it (the software and source code) becomes freely availalbe, and by working hand in hand with the customers we gain deep insight into what we need to offer to help other schools take advantage of it.

We're still exploring, but this new model has significantly changed our relationship with our customers and potential customers.