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Why Co-Creating is a Fundamental Business Strategy

In my book Business Evolution, I talked about the Essential 4P’s, Purpose being the second P looks at what business you are in and the focus of your business attention. Regarding product, the purpose of your product is to solve your customers need, the by-product of this is revenue and profits. I advocate co- creating innovative products and services with the support of all your people, primarily your customers feedback and input. Last week I talked about people in a customer centric organisation and that product failure increases due to lack of customer engagement.

Product centric organisations starts with a product or service that responds to customers’ needs and then attracts as many customers as possible who have these needs. Primary focus is on the products the business brings to market, secondary is customers that buy those products. It looks to develop new products by leveraging technology or specialised skills that exist in the company. It starts by looking internally at its capabilities rather than externally at what needs are not being met. Many businesses start and structure the organisation using this business model.

Many poor customer experiences happen because of this internal siloed product focus. The other downside is a short-sighted vision of the market that blindsides companies to key market changes.

The financial objective of a company that competes in a product-centric way focuses on optimising value created by each product, whereas a customer-centric company focuses on optimising value created by each customer or segment.

Think about what business are you in?

Remember the fate of it Kodak, it defined its self as being in the photo processing business. This definition hamstringed its thinking and imped change. When the shift to digital came Kodak resisted locked to products and photo processing product model. The cases of Nokia, Blockbuster and Xerox Corporation are other such examples. These companies failed to understand what business they were in focusing on their products and not their customer preferences. There were in a product centric business and not a customer centric business that focused on solving and serving a specific need in a defined market sector whatever the solution or product might be.

A Customer-centric company starts with the individual customer and aims to meet the needs of that customer in all functions wherever possible. It focuses on identifying a key customer segment, their needs and then continuously developing products and services to fulfil those needs.

Examples of the best customer centric companies are Amazon, Zappos, Southwest Airlines and Virgin. Amazon began selling books online and went on to develop products like Kindle, Fire and have continued not only to innovate products but whole sectors.

  • So, a product centric business is a linear process flow: Product development = Sales and Marketing = Customers or end user.
  • Versus a customer centric circular process flow: Customer testing and feedback = Sales & Marketing = Market Data & Insight = Product Development is fed with characteristic and usability information.

There is a continuous flow of customer requirements driven by customer data and insight to the product development that delight the customer because it solves an existing pain, specific problems and improves their situation which is feedback again.

Customer-centricity is having a satisfactory product to start with. No one buys a product that doesn’t respond to their wants or needs. Furthermore, customer-centricity does not end at the point of purchase, you continue to gather feedback and insights as this is only part of the total customer life time value. You want to reduce churn, build the relationship so your customer repeats their purchase and becomes loyal advocates.

Your customer does not want to see how you organise your processes or experience organisational failures, they want seamlessly fast and effortless interactions, regardless of the channel or touchpoint, whether navigating your websites or, the interacting with your contact/sales centre/person.

According to the Huffington Post, 70 percent of companies that deliver outstanding customer experience rely on customer feedback. Smart brands have long since realized that its customers control whether a product or service goes to market successfully.

The Co-creation process where businesses and customers work together to create better ideas, products and services. Although the business steer product innovation process, customers are in the room at the core of product development and improvement, sales and marketing.

4 Steps Customer Centric Companies Successfully Co-Creating Products

  1. Focus Your Efforts: Knowing what your customers are worth is the secret to focusing your time and money where it makes the most difference. Existing customers and prospective customers you aspire to win over. Campaign your leader with the most credibility, influence and executive decision within your company.
  2. Engage Your Team of Collaborators: Turning customers into allies can tip the scales and make the executive team, and the funding managers, pay attention. Invited existing and potential customers to collaborative on product development with executive sponsors to make your abstract idea tangible.
  3. Make it Real: Focus on A Single, Tangible Customer Pain Point Any new product change or incremental innovation should start with a significant issue facing actual customers. Share your experience and lesson learnt widely with decision-makers from virtual experiences, testimonials, and video interviews to customer sentiment and feedback. Never exaggerate your responses and results. Connect the pain point to a company financials and use ROI measures to justify their investment.
  4. Ongoing Improvement Process: Achieving elevated levels of customer satisfaction is essential to your future revenue and profitability. Satisfied customers will continue to buy from you and may recommend your company to others. Conduct regular surveys of customer satisfaction and analyse the results to look for areas of weakness where satisfaction levels are low. Conduct continuous improvement in weak areas by running training programs, deploying customer service technology or modifying processes. Measure the improvements in customer satisfaction.

Your product development team can use continuous improvement to enhance existing products so that they continue to meet changing customer requirements. Continuous improvement helps your company to maintain market share and leadership, according to the “California Management Review.” Innovation and new product development are important to making market breakthroughs,

LEGO has long seen the value in co-creating products with customers, LEGO Ideas is an online community where members can discover cool creations by other fans and submit their own designs for new sets. Fans can vote on submissions and give feedback. If a project gets 10,000 votes, LEGO reviews the idea and picks a winner for an official LEGO Ideas set to be created and sold worldwide. The creator gives final product approval, earns a percentage of the sales and is recognized as the creator on all packaging and marketing. This concept celebrates loyal customers and rewards them for innovation, creativity and entrepreneurialism. Made.com the online furniture supplier direct from the makers, Made Talent Lab also hosts an annual online contest, Made Emerging Talent Award just like LEGO Ideas.

Inspire your organisation to develop a culture of continuous improvement and innovation for the benefit of your customers. Even those organisations that have the answers today cannot assume they know what their customers will want tomorrow. Customer’s expectations have become relentless and successful organisations will must anticipating customer’s demands tomorrow to stay ahead of the competition and in business. Companies only win when they embrace customer-centric innovation, because business need are addressed if the customers need are met.

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