Customer intimacy is essential for success

Innovative culture promotes a culture of driving customer success & satisfaction - Mike A.

It’s a fact that no one-product can satisfy the needs of customers.  Organizations that focus on customer intimacy try to find a total solution that encompasses a unique range of superior service to maximize the benefit from the product offered.[1]  A company can maintain intimacy with its customers by:

1. Knowing its customers and gaining detailed knowledge about them and their needs and habits
2. Increase solutions offered
3. Enhance share of targeted customer spending
4. Provide customer information and data to employee so they can better engage and serve the customer
5. Promote a culture of driving client success
6. Strive to create long term relationships with clients

A customer-intimate organization should have a strategy to reach different types of customers.  A rigid one-size-fit-all model should be substituted for a dynamic, rich culture to engage all types of customers.

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[1] Paul R. Niven, Balanced Scorecard Step-By-Step: Maximizing Performance and Maintaining Results, John Wiley & Sons, 2006

Quantitative AND Qualitative Research - Two Essentials for Product Development

It is true that “the customer’s ability to guide the development of new products and services is limited by their experience and their ability to imagine and describe possible innovation”[1], however, organizations would stand to lose relevancy if they marginalize the customer’s involvement in product development.[2]. 

Customer’s participation in development process doesn’t have to be a all-or-none approach.  A small cross section of consumers, if given a prototype or a demo of the product can provide as valuable a feedback to the designers as quantitative data from researchers.  This is not to suggest that empathic observation and research should replace other research methods by the organization.  However, empathic research findings are usually reflective of specific users and limited use scenarios.  Adam Silver, a strategist at Frog Design thinks ethnography is, on its own, unable to provide the kind of information needed to validate product and service ideas across wide audiences.[3]   In other words, by itself, empathic research lacks breadth. 

It’s therefore prudent for quantitative and qualitative interpretations not to limit the design development, but to craft a meaningful experience for the user from the tension between the two.

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[1] Leonard, Dorothy, and Jeffrey F. Rayport. 1997. "Spark innovation through empathic design." Harvard Business Review 75, 102. OmniFile Full Text Mega (H.W. Wilson), EBSCOhost (accessed May 27, 2012).

[2] Gary Oster, Divining the Need, Compensatory Behavior of Customers, Regent Global Business Review,  August 2008

[3] Larry Irons, Empathic Research Methods and Design Strategy, Getting Beyond the Quantitative/Qualitative Debate, VatorNews, July 22, 2008, found online at http://vator.tv/news/2008-07-21-empathic-research-methods-and-design-strategy

Importance of Empathic Research in Developing Products

Innovative culture must address unarticulated and undiscovered needs - Mike A.

Empathy means being able to sympathize or relate to others through better understanding their state of mind.[1]  Empathic research helps businesses identify what customers really want rather than developing products that companies choose to offer – it observes how consumers use products in their own settings, rather than in controlled environment.[2] 

Although focused-group research yields good results, its participants usually tend to give researcher what the researcher wants to know or hear rather than the “truth”, whereas, empathic research is valuable in getting to unarticulated and undiscovered needs.[3]

Empathic research is called qualitative to contrast it with the quantitative approach, which refers to measurements.[4]  As such, empathic observational research should still be conducted in a systematic format, utilizing photos, videos or direct observation of consumer’s compensatory behavior.[5]  Developing a close relationship with consumers and making them a part of the product development process should be a priority.  Suri believes there are four classes of methods for understanding what really matters:[6]

1. Learning from data, whether secondary sources of our own analyses
2. Looking at people in context
3. Asking people to participate
4. Trying things ourselves

As effective as it is, empathic observation research should not be the only research method conducted by an organization.

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[1] [5] Gary Oster, Divining the Need, Compensatory Behavior of Customers, Regent Global Business Review,  August 2008

[2] Christine M. Piotrowski, Problem Solving and Critical Thinking for Designers, John Wiley & Sons, 2011

[3] Randy Schueller, Perry Romanowski, Multifunctional Cosmetics, Volume 26 of Cosmetic Science and Technology Series, CRC Press, 2002

[4] David E. McNabb, Research Methods in Public Administration and Nonprofit Management: Quantitative and Qualitative Approaches, M.E. Sharpe, 2008

[6] Jane Fulton Suri, The Experience Evolution: Developments in Design Practice, The Design Journal, Volume 6, Issue 2, 2000

From data to design to product - A consumer-focused approach

What are some the things that go on between the gathering of the data and the introduction of new products and services?

In her article, Design Practice, Jane Fulton addresses the question by providing the following model: [1]

1. Design based on projective and empathic techniques (gathered data)
2. Exploring design ideas and concepts based on models that fit multiple dimensions of people’s experiences.
3. Communicating experiential ideas and looking at people in context to build informed-designs
4.  An interactive functional experience between the design team and the various consumer groups, to promote shared visions and design and invent new tools.

Every new product and service, regardless of design, is in a perpetual beta test. Companies that invest in empathic research can gain much in making their products and services meaningful and relevant. [2]

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[1] Jane Fulton Suri, The Experience Evolution: Developments in Design Practice, The Design Journal, Volume 6, Issue 2, 2000

[2] Gary Oster, Divining the Need, Compensatory Behavior of Customers, Regent University School of Global Leadership & Entrepreneurship, August 2008

Ethnographic Research and Social Media

Since innovation is not linear and it involves paradigm shifts, methodologies have to be utilized to achieve it.[1] Focus on consumer is the start of this process. To achieve a non-linear innovation an outside-of-the-box mindset and approach is necessary.  An ethnographic technique based on anthropologic principles is a powerful approach to understand consumer habits, preferences, behavior and needs.[2] As such, gathering consumer data and information is at the heart of this empathic research. 

A good example is using social media to conduct a focused observation. Social media can provide us with a global understanding of consumer habits and unvoiced-needs that can be further narrowed by region, gender, age, occupation, income, class, education, society and culture, etc.[3] Facebook’s 800 million active users contribute more than 3.5 billion pieces of content each week on Facebook.[4]  It had 152 million unique visitors in March – or more than 2 out of three Americans who were active online. [5]  Each user activity is gathered and recorded. This priceless information can be used innovatively to design new products that can meet the future needs of the consumer.

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[1] Gary Oster, Innovation in Action, School of Global Leadership & Innovation, Regent University, August 10, 2007

[2] Gary Oster, Innovation in Action, School of Global Leadership & Innovation, Regent University, August 10, 2007

[3] Arlette Jeet, Empathic Research Described, January 18, 2011, found online at http://arlettejeetcheckthisoutbusinesssavvy.blogspot.com/2011/01/empathic-research-described-by-arlette.html

[4] Katy Daniells, Infographics: Social Media Statistics for 2012, Digitalbuzz, Jan. 3, 2012, found online at http://www.digitalbuzzblog.com/social-media-statistics-stats-2012-infographic/

[5] Connie Guglielmo, Facebook Facts, Stats and Trivia For Future Jeopardy Contestants, Forbes, May 17, 2012 found online at http://www.forbes.com/sites/connieguglielmo/2012/05/17/facebook-facts-stats-and-trivia-for-future-jeopardy-contestants/

How and why companies cannibalize their own products?

Innovative culture is a risk-taking culture - Mike A.

Perhaps I can best answer this question by providing an example. There are two examples of product cannibalization that relate to this post. In 2008 Apple sold more than 22 million iPods.[1]  However the company cannibalized iPod by rolling out the iPhone. [2]  This iPhone strategy provided higher profit margins than their 2008 iPod product margin. In addition, cannibalization of iPod into iPhone and launching a smartphone strategy made Apple the world’s largest smartphone vendor in 4^th quarter 2011.[3]

  

The other example is Gillette. In 1998 they successfully introduced Mach3, the first three-blade razor. [4]  However in 2006 they released Gillette Fusion, a five-bladded razor. [5]  To promote their new product (Fusion) they effectively cannibalized their successful Mach3 series.[6]  The Youtube link below is a commercial produced by Gillette…notice the slogan at the bottom that reads “Why Fusion is better than Mach3”:

http://youtu.be/S8lzOlzJtV0

The link below is a more direct advertising to push Mach3 users to Fusion (showcasing Tiger Woods):

http://youtu.be/CicL-v4hHJM

Below are some questions that need to be asked and answered prior to initiating a product cannibalization: [7]

   

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[1] Dan Moren, Inside Apple’s iPod Sales Figures, Macworld.com, Jan 31, 2008, found online at http://www.macworld.com/article/1131874/ipodsales.html

[2] Adam Lashinsky, Inside Apple: How American’s Most Admired and Secretive Company Really Works, Hachette Digital, Inc., 2012

[3] Business Wire, Strategy Analytics: Apple Becomes World’s Largest Smartphone Vendor in Q4 2011, found online at http://www.businesswire.com/news/home/20120126006752/en/Strategy-Analytics-Apple-Worlds-Largest-Smartphone-Vendor

[4] Gillette - http://www.gillette.com/en/us/Products/Razors/mach3-turbo/mach3-turbo.aspx

[5] Gillette, http://www.gillette.com/en/us/products/razors/proglide/fusion-proglide-power-razor.aspx

[6] Charles W. Lamb, Joseph F. Hair, Carl McDaniel, MKTG 5, Cengage Learning, 2011

[7] Charles W. Lamb, Joseph F. Hair, Carl McDaniel, MKTG 5, Cengage Learning, 2011