book.chapter Five customer innovation catalysts

When embarking on the journey of customer-led innovation, it is essential to target five distinct groups of individuals for recruitment. These groups are pivotal in the process of harnessing the creative power of customers to drive innovation from the outside in. The ultimate objective is to reengineer the entire business model with the assistance of visionary customers, thereby transforming the company's approach to innovation. Traditionally, innovation has been an internally driven process, but by incorporating customers into the development cycle, the dynamics of innovation undergo a significant transformation. With customer involvement, the focus shifts from the products and services themselves to the role they play in bridging the gap between customers' current situations and their desired outcomes. This shift is beneficial as it aligns the company's efforts with the true needs of the customers, who are more concerned with the end result than the tools used to achieve it. Customers can assume various roles in shaping a company's innovation projects. The first group, Lead Customers, are those who take the initiative to create new solutions that better meet their needs than the existing offerings. By observing and learning from these innovators, companies can develop hybrid products that have strong commercial potential. To foster this innovation, companies should provide these customers with toolkits to customize products and services, sponsor their research, and engage closely with them to understand their goals and the results they seek to achieve. A case in point is the LEGO Group, a leading toy manufacturer known for its iconic Lego bricks. The company took note when Fred Martin, a graduate student at MIT, created a "programmable brick" that allowed Lego toys to move autonomously. In 1997, LEGO launched Lego Mindstorms, which became its best-selling product. The product inspired a community of adult hackers and hobbyists who used it for a wide range of applications, from soda machines to toilet scrubbers. This community is now actively involved in developing the next generation product, Mindstorms NXT. The second group, Contributors, are individuals who freely share their work for the collective benefit. They may use a company's product to create a new design and then offer it to the community without seeking compensation. These contributors enjoy the recognition of their skills and talents and are motivated by the appreciation they receive from their peers. To encourage more contributors, companies should create communities for like-minded individuals to connect and ensure that their contributions are acknowledged. National Instruments, a company that sells virtual instruments, has capitalized on this by establishing a vibrant Developer Zone. This online repository allows scientists, engineers, and researchers to share their ideas, which others can then build upon, contributing to the company's success. Consultants, the third group, possess deep expertise and provide valuable insights and guidance. They find satisfaction in improving the status quo and can be leveraged by inviting them to analyze trade-offs, review next-generation products, and serve on design teams. Hallmark, for example, created the Hallmark Idea Exchange to engage consultants and capture new ideas, with some members serving on committees and advisory boards. The fourth group, Guides, are advisors who enjoy helping others navigate complex product lines and solve problems. They create new knowledge to help others make informed decisions. Companies can benefit from guides by providing online forums for product reviews and inviting them to help organize product lines into sensible categories. Staples recognized the value of guides when it reclassified its product categories with customer input, leading to a significant increase in online sales. Lastly, Promoters are passionate fans of a company's products and brand. They actively spread positive word-of-mouth and come up with ideas to attract new customers. Companies can nurture promoters by giving them early information about new products and involving them in the marketing process. Karmaloop, a retailer of urban streetwear, has thrived by leveraging over 5,000 trend spotters worldwide who act as promoters, contributing to the company's growth in multiple countries. Patricia Seybold emphasizes the importance of empowering customers to play as many roles as possible in co-designing a business. The intersection of passionate customers with various parts of the business is a measure of success in harnessing customer innovation. The cultural transformation within a company can be gauged by the extent to which employees and departments engage with customers in these roles. Seybold also advises companies to facilitate ongoing discussions with customers by providing guidelines and setting clear expectations for participation. Companies should acknowledge their presence in public discussions about their industry or products, allow conversations to flow naturally, and learn from any negative feedback to improve their offerings. Lastly, Seybold challenges companies to consider different business models that leverage customer creativity and guidance. Customers can create content, offer guidance, and share their experiences, which can be integral to a company's success.