Iain McCrossan, Senior Consultant for Capgemini UK’s Marketing, Sales and Service practice discusses the benefits and pitfalls of engaging with customers to develop new product and service capabilities in your organisation.

The notion of engaging with customers to help inform product or service strategy is nothing new but as a survey by Capgemini back in 2008 showed, there are few who are utilising the voice of their customer (VoC) in a truly effect manner to inform product development.

Why might this be?  It is true that many senior executives and marketing professionals understand the power of engaging with their customers – but many companies still fail to tap into that resource in the right way, at the right time and for the right reasons.

How often have you seen a customer research project commissioned that reads like a self-fulfilling prophecy?  “We are launching product x and want to understand from our customers whether we should include feature a, b, c or d.”  Or, “what are most important out of the following price, features, battery life or screen size?”  It comes as no surprise that often customer surveys are used to justify a preconceived idea or to validate what was already known.  But how many of us can say that we truly use our customers to inform the decisions we take before we have already taken them?

Just a few weeks ago Milind Shah blogged about digital strategy and its role in customer engagement “So I’ve experimented with social media, what next?” To pick up on the last point he made on that blog, I agree completely that the art of engaging with your customers successfully requires a constant two way relationship.  Instilling a culture of customer engagement is much more than investing in the right tools.   It is about utilising VoC at every stage of the product and service life-cycle and building the techniques of listening and acting on these VoC’s into the DNA of your organisation.

In our most recent post, Trevor Booth commented in his blog about the need for organisations to adopt “customer centric innovation in product development.”  Companies that have lead the way with customer co-creation such as Starbucks and Dell use tools such as those available from salesforce.com that reside on a web platform and allow ideas to be posted, voted for and commented on by a user network.  Starbucks call their user forum “mystarbucksidea”, whilst Dell have “Dell Ideastorm.”  Importantly, these firms employ teams of people across their organisations dedicated to managing their customer’s ideas.  Firstly, making sure the user is always informed of the status of their idea (read, under investigation, implemented, discounted, etc) and secondly, that the ideas are fed into the right area of the organisation and projects co-ordinated to ensure effective end delivery.

Some organisations have steered clear of this co-creation concept as they are afraid that it will create a forum for negative word of mouth (WOM) about their products, services or brands.  But this should not be reason to retract.  Far from it.  If a customer has a gripe about your brand then there are many forums in which they can spill out their frustrations.  Why not have this captured in an environment that you can control and manage.  The idea is not simply to co-create new and exciting initiatives but also to make improvements to products and services that already exist.  Who better to tell you what needs resolving than your customers?  Through active listening in this way, organisations can identify key areas for improvement and avoid costly PR clean-up exercises.

Another common misconception with this type of customer engagement is the loss of control if customers have a free-for-all ability to post ideas.  Companies such as Dell have tackled this with their “storm sessions” concept.  This is where customers who have registered to participate in a virtual “brain storm” log into a hosted session, for a fixed period of time designed to solve a specific issue or develop a specific idea.  In this way, organisations can use customers as an extra resource and take advantage of significant cost savings over costly face to face customer workshops.

Of course, it is not just end users who are a useful resource for companies looking to innovate their NPD process.  Groups of authorised dealers or resellers can also come together in virtual environments to feed into new product concepts.  By engaging with key partners in this way, there is a much higher likelihood they will have confidence in your product strategy and promote your products over that of your competition.  And finally, what about your employees themselves?  Co-creation forums are perfect to encourage employee engagement, creativity and cross department working practices.

So, to summarise, whilst co-creativity should not be a substitute for true innovation, it should firmly sit within your organisations customer experience & digital strategy.  There will always be products that are launched we didn’t even know wanted (the iPhone for example).  But innovation comes in many forms and through ongoing customer engagement, our customers can become our closest allies to show us were to focus our energies.