Just checked in to a resort here in beautiful Cancun, Mexico and my first impression is “wow.” Amazing lobby. Stunning views of the ocean. A world-class fitness center. And best of all, a staff that truly seems to care about its guests. What a contrast to the airline I arrived on. “United’s Quest to Be Less Awful” is the cover story in BusinessWeek, detailing maddening flight delays, disgruntled employees, technical meltdowns, and abysmal customer service.
As an innovation coach, I can’t help speculate on what accounts for the difference between these two businesses. Leadership, for sure. But another factor may be less obvious: willingness to listen to customers and respond to their needs. A participant in one of my workshops expressed this formula succinctly when she said this: “Whether we admit it or not, virtually all innovation comes from the end user, either through a question that sparks an idea, or a direct request for something new.” If you want a good laugh, try suggesting an improvement idea to an employee of United Air Lines just to see the look on their face.
All too often we assume that innovations get dreamt up in isolation, by brainiacs in the back office, far from the madding customer crowd. But that’s not the case with innovation-adept companies. They value listening. They welcome suggestions. They pounce on new ideas no matter where they come from.
More and more companies assume that they can automate all of this listening stuff. They look at the success of Facebook, Google, Amazon, and other tech titans that are data-driven, cloud-based, and don’t have to get their hands dirty talking to customers face to face. All too often they conclude that getting out there in the marketplace and mixing it up with actual customers is so 20th Century. Why waste time? It’s all in the data, right? But something vital is being lost: a deeper understanding of the customer, and early warnings that your value proposition is not delivering as it did only yesterday.
“We are training an entire generation of assistant marketing managers that, if they have five good bullet points on a slide, they think they understand the customer,” says Dev Patnaik, author of Wired to Care: How Companies Prosper When They Create Widespread Empathy. “They don’t realize their business is out in the world– in the stores, where people are buying their products and services. And in the homes where they live their lives.”
There’s no question that the Digital Age is giving us powerful new listening tools. But data mining alone cannot help us intuit the customer, develop intimacy with the customer, or discover their latent needs, wants and desires. The most Big Data can give us are lagging indicators: of service levels, of repurchase rates, etc. What Big Data does a poor job of is signposting leading indicators. Without face to face listening, data fails to give us the unique insights that can lead to breakthroughs.
Below are six ways leading firms listen to their customers:
- Smart firms know that good listening starts at the top. All the great CEOs are or were customer-focused listeners first and foremost. Sam Walton, who flew his own plane to attend store openings and frequently showed up at stores unannounced. A.G. Lafley’s “consumer is boss” motto was at the heart of Procter & Gamble’s wildly successful innovation initiative. Cisco’s John Chambers made frequent sales calls and reportedly got a “heads up” on startups that Cisco needed to buy. And Elon Musk constantly interacts with Tesla owners, and answers their questions. Even the late Steve Jobs, who never believed in marketing research and focus groups, focused intensely on creating “insanely great products” that people just couldn’t do without.
2. Smart firms listen to anticipate emerging needs. GE CEO Jeff Immelt spends four days a month in the field, interacting with buyers. He hosts town hall meetings with several hundred customers at a time to listen to their thoughts on what the company can do better to meet their present needs. He also introduced a new way of forecasting their unmet and future needs. As I explore in Driving Growth Through Innovation, GE also convenes “Dreaming Sessions” with key customers in the company’s various business units, from healthcare to turbines to jet engines. As Immelt explained: These sessions are where “we are trying to think about where our business and their business will be in five or ten years.” Favorite question: “If you had $400 million to spend on research and development at GE, how would you prioritize it?”
3. Smart firms involve customers early and often. To maintain its market positioning as the “ultimate driving machine,” BMW must constantly integrate new technologies and design features that are a step ahead of the competition. To accomplish this, BMW created what it calls a Virtual Innovation Agency (VIA) to listen to customers directly. Car buffs worldwide can access the VIA Web site and join online discussions to share their ideas with other enthusiasts around the world, and with the BMW Group listeners. The VIA submission process allows anyone with Internet access to submit ideas, and if the idea has potential, it’s quickly routed to the appropriate working group at BMW for follow-up. Within the first week after VIA was launched, 4,000 ideas had been received.
4. Smart firms identify and listen to maverick customers. One such customer type has been called the “lead user” by MIT professor Eric von Hippel. This unique breed of purchasers are the ones who have needs still unrecognized by the overall market. They may stand to profit if they partner with you to solve a problem their customer has. Or they don’t accept the limitations of the way you do business presently, your terms, your products features or lack thereof, and they see a way you could serve their needs better and don’t mind telling you about your limitations. Listening – even better brainstorming with — this creatively outspoken type customer can help you identify unarticulated needs which most customers don’t even entertain because they accept the limitations of your present way of doing business. Sometimes, these individuals take it upon themselves to modify your product to better suit their needs, and can help you anticipate what the market might welcome were it to be standard. Cup-holders in cars are an example. Aftermarket entrepreneurs invented them, auto parts retailers began selling installable cup-holders first, and the big automakers later designed them in to new models after seeing how much customers valued the convenience.
5. Smart firms experiment constantly with new listening methods. Perhaps the hottest new method is crowdsourcing, the practice of obtaining ideas from large groups of people and especially from the online community rather than your usual sources. Denmark-based Lego Toys is using this technique to inspire ideas from fans that its own 180 designers might not have ever thought of. Submissions that receive 10,000 votes from site visitors are then vetted by Lego reviewers. And fans whose models are chosen for production receive one percent of their toy’s revenue. Other organizations are hosting crowdsourcing contests for solutions to vexing technical problems or to discover winning algorithms Netflix did recently with a method of showing customers similar movies to the ones they have watched. Snack giant Frito Lay asks the crowd to suggest new chip flavors or even whole snack categories via its website.
6. Smart firms seek ideas from new customer groups. The medical products division of Dutch-based Philips Electronics assumed its customers were doctors in hospitals, since they were the ones who traditionally made decisions about medical tools. But Philips managers looked and listened to a wider array of customer groups, and noticed that more services were being provided in nontraditional environments: outpatient clinics, homes, and even on the street (for homeless people). By asking themselves what these non-traditional customers might need, Philips came up with a stethoscope with improved acoustics. The new scope helps filter out voices, traffic, and other background noise, making it easier for caregivers to hear heart murmurs or breathing problems they might have missed otherwise.
Do you want to build an innovation capability in your firm? Start by looking at how you listen to customers and what you do with these insights. Use the six strategies outlined above to shake up and wake up your listening.