Live

Watch CBSN Live

Turn Customer Input into Innovation

The Idea in Brief


How do you launch a blockbuster product? Stop asking customers what they want. Start asking what they want your products to do for them.

That's how medical-device maker Cordis created the artery stent--which doubled the company's revenue in two years and vaulted its stock price fivefold. Cordis's secret? A new way of listening to customers. And a radical shift from customer-driven to customer-informed innovation.

When you ask customers what they want, they describe solutions--products, features, services. But customers know only what they've experienced. They can't imagine what they don't know about new technologies, materials, etc. So they suggest things other firms already offer--prompting "me-too" products or incremental improvements--opening the field for competitors.


Kawasaki asked customers to suggest improvements to its Jet Ski stand-up recreational water-craft. They requested side padding for more comfortable standing--never dreaming of a seated craft. Competitors developed seated models, trumping Kawasaki.


Imagining the unimaginable is for R&D departments, not customers. To fire up your firm's imagination, ask customers for desired outcomes, not solutions. Their answers will transform your innovation from serendipity into rigorous discipline.


The Idea in Practice


Capture customers' desired outcomes using these steps:




Steps

Tips

Examples

1. Plan outcome-based customer interviews.

  • Deconstruct the process associated with existing products.
  • Select groups that directly use the products. Include diverse individuals within each group.
  • Cordis defined four angioplasty steps: insert artery catheter, place balloon at blockage, inflate balloon, remove catheter.

    Cordis interviewed cardiologists of varying experience, age, and location; nurses; and hospital administrators.

    2. Capture desired outcomes.

  • Translate interviewees' solution statements into outcomes--by asking why customers want the stated solutions.
  • Have interviewees discuss each step in using the product--difficulties encountered, ideal scenarios, etc.
  • Cardiologists said they wanted a "smooth balloon"(a solution) because existing ones risked dissecting blood vessels. Cordis defined this desired outcome as:"Minimize risk of dissecting a vessel."

    3. Organize the outcomes.

  • Group desired outcomes under each process step.
  • Cordis categorized its outcomes into the four angioplasty steps.

    4. Rate outcomes' importance and satisfaction.

    Validate interview results:

  • Quantitative survey respondents rate each outcome's importance and satisfaction level 1 to 10.
  • Plug ratings into this formula: Importance + (Importance - Satisfaction) = Opportunity. High Opportunity values are optimal innovation possibilities: desired outcomes important to customers but not yet satisfied.
  • Customers rated one outcome--minimize restenosis (recurrence of arterial blockage)--as 9.5 in importance and 3.2 in satisfaction.The formula yielded the highest opportunity value of all: 9.5 + (9.5 - 3.2) = 15.8.

    5. Use outcomes to jump-start innovation.

  • Using ratings, identify new product ideas, segment markets, and define your competitive position.
  • Cordis aimed to reduce restenosis by 20%--ultimately devising its successful stent. It also introduced new catheters, satisfying other desired outcomes. Its U.S. market share ballooned tenfold.


    Further Reading


    Articles


    Spark Innovation Through Empathic Design


    Harvard Business Review

    November-December 1997

    by Dorothy Leonard and Jeffrey F. Rayport


    These authors agree that companies shouldn't rely on customers to envision and articulate possible innovations. Instead, firms must identify underlying needs that customers themselves may not recognize. The empathic design process addresses this challenge.

    Empathic design hinges on observation: watching customers use products or services. But it has a critical twist: Researchers observe customers in their own environment, during everyday routines--and gain access to information that doesn't arise in focus groups or laboratories. Armed with that information, firms can create truly innovative offerings that satisfy customers' deepest needs.

    Torment Your Customers (They'll Love It)


    Harvard Business Review

    October 2001

    by Stephen Brown


    Brown also concurs that asking customers what they want extinguishes a company's innovative spark. Yet he takes the argument to a new, provocative level. Companies, he says, should not only stop pandering to customers' every whim; they should also tease, tantalize, and torment them with insatiable desire.

    How? Through retromarketing--a revival of techniques from the days when "marketers ruled the world with creativity and style." Based on the eternal truth "You get more by playing hard to get," retromarketing emphasizes four tactics: 1) exclusivity (hold back supply, delaying customers' gratification), 2) selective secrecy (get customers wondering what all the buzz is about), 3) amplification (enhance your secret's allure), and 4) entertainment (make your pitches engaging, amusing--even flirtatious). These four techniques yield marketing tours de force that even the most jaded consumer can't resist.

    Creating Breakthroughs at 3M


    Harvard Business Review

    September-October 1999

    by Eric von Hippel Stefan Thomke, and Mary Sonnack


    As part of his approach, Ulwick advises against overreliance on lead users: customers with an advanced understanding of a product who are experts in its use. Lead users may offer novel product ideas, but they aren't average users. So new products springing from their recommendations may have limited appeal.

    These authors disagree. They show how 3M has used the lead-user process to generate breakthrough medical products, and innovations like waterproof sandpaper, Scotch tape, and Post-it Notes. 3M 1) identified target markets and innovations that could benefit them; 2) determined trends ("People want a cheap way to prevent infection without using antibiotics or surgical drapes"); 3) identified lead users--customers so impatient for the next big thing, they make it themselves (e.g., veterinarians who control infection despite constraints--patients who are covered with hair, don't bathe, and lack insurance); and 4) developed the breakthroughs (antimicrobial medical tubing).


    Copyright (c) 2002 Harvard Business School Publishing Corporation. All rights reserved.

    View CBS News In