Tuesday, September 25, 2012

Ask not what your customers can do for you

I was pondering recently the risks associated with innovation.  No, not the risks a firm bears to create a new product or service, but the risks that a customer bears when acquiring and using a new product or service.  I wonder - do we realize what risks we ask a customer to endure to use a new product?

After all, innovators are experts at risk.  Any new product or service that actually makes it to the market has been through the risk wringer.  A good innovation process has examined the new idea for financial risk, intellectual property risk, the risks associated with the actual use of the product, reputational risk, and many other types and forms of risk.  By the time the product actually emerges from the swamps of product development and legal review, it is often a pale shadow of what it was at conception.  Most businesses are more sensitive to the risks associated with launching a new product or service than they are to the potential benefits of the new product.

But what's interesting about all this fascination with risk is the seeming inability to understand risk from the customer's perspective.  If it is risky to create and launch a new product or service for a business, imagine how risky it is for a customer to acquire and use a new product or service.  In most cases a completely competent product already exists and is widely used.  It may not be the most effective or valuable solution, but it is known and trusted.  Further, the introduction of a new product or service introduces change, which most people dislike and avoid if possible.  There's also the matter of distrust.  We tend to distrust the new and untested, and rely on historical data and accepted products and services.  Sometimes that distrust is based on good reasons, and sometimes it is based on outdated assumptions.  But what a world of trouble we create for a customer when we introduce a new product.

Ask not what your customers can do for you

It's usually just after the release of a new product when the grumbling starts.  "Don't they realize the benefits our product creates?" or "Can't they see the value our new service provides?"  Every new launch is accompanied by a litany of complaints about potential customers, who don't share our enthusiasm for the new product.  In many cases, that's because the ideas have been shorn of any interesting features and attributes as they were processed through the internal "risk wringer" in the business.  Further, many ideas were off-target from the beginning, having been birthed as a concept that was never tested and never fully validated with customers before becoming a new product.  Too often ideas become products without a full investigation of customer needs and expectations.  We expect customers to adapt to our way of thinking about their problems, rather than we adapting to their needs and expectations.  What are you asking your customer to do?

Ask what you can do for your customer

Before the risk of launch, before the financial risks associated with developing a new product, before you strip out all the risk of a new product, there's a risk you've overlooked.  That risk is that you've become so confident understanding what your customers want that you neglect to ask.  Or that you are so confident in market research that you neglect to dig more deeply.  Or that you simply impose a new technology and assume customers will adapt and adopt.  You see, the biggest risk of all in a new product or service isn't intellectual property, or financial risk, or that your product will cause someone to lose an eye or a limb.  No, the biggest risk is at the conception, when your team fails to engage with customers in a meaningful way to understand their true challenges and needs.  When you fail to perform deep customer interaction, the risk in your product is baked in, and cannot be removed.  No amount of de-risking or marketing can make a product that started life as unnecessary and unattractive more attractive to customers.  What can you learn from your customers about their needs?

The best products and services don't ask customers to change and adapt, so much as to engage and embrace.  The biggest barriers to any new introduction are the amount of change necessary to adopt, the risk of an investment that does not provide benefits and inertia.  What can your product do for your customers that cannot be accomplished by what exists, or substitutes?  What is so compelling that they will overcome inertia to adopt?  What are the key unmet needs or gaps that your product fills, and do those matter to customers enough to make them change?

Ask not what your customers can do for you, ask what you can do for your customers.
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posted by Jeffrey Phillips at 6:30 AM


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