Friday, September 08, 2006
Are You Market Driven or Customer Led?
Becoming market driven is the best way to develop new products (goods and services), not by becoming customer led. The reasons for this are given below.
Customer driven means becoming completely focused on the expressed needs and wants of your customers. This is a very good strategy but has serious limitations. Listening to customers who do not know, nor understand, what they need, can lead you blindly down the garden path. This is because the average customers can only tell you what they already know, which is generally what has already being done before and they saw it available as part of a competitors offering. Customers don’t think ahead a lot of the time and they don’t understand very much about what is possible using today’s technologies. They only know what they already know and what they already know is what you get.
However, becoming market driven means looking their expressed needs and looking deeper at the latent and previously unknown needs of the customers. In other words, delivering products that meet their current needs and, more importantly, the future needs that the customer doesn’t even know that they have yet.
The best ways of capturing these needs are: (1) using ethnographic/anthropological analysis, (2) gathering and analysing customer data, and (3) identifying opportunities within the customer data. The key here is to look at what the end result of the innovation is to be - what job it has to do? Then look for solutions/technologies that will do that job.
Having a technology and looking for applications is often out of whack, except in the case of some radical discovery. An unmet need looking for a solution or a technology is a much better starting point for developing a new product. Offering products that meet the needs associated with these new found opportunities will lead to success in the marketplace as customers will able to get a particular job done that they previously found difficult to do. This results in increased sales and increased customer satisfaction – a real win-win outcome for both the product developer and the customer.
An example of this is the principle of memory metals. Memory metals are metallic materials that can transform from one shape into another after they go through a temperature change (within which that transformation temperature for the material exists). Finding applications for these metals can be very fruitful and some creative people brainstorming ideas could arrive at many applications for such materials. However, if you examine the needs of patients with cardiovascular problems, you will find that many of them suffer from blocked or restricted blood vessels due to the build up of plaque. What these patients need is some structure that can be used to open up a blocked blood vessel. To achieve you may set out the needs as follows: (1) we must be able to deliver the structure to the place where the blockage exists, (2) it must be capable of supporting the blood vessel from the inside, (3) it must be biocompatible, (4) the blood vessel must be opened outwards to widen it to allow for better blood flow. If you examine these requirements and then look for a solution you may think along the lines of: (a) a tube that lines the blood vessel, (b) a tube that must be small enough to fit into the vessel, (c) a tube that expands inside the blood vessel to open out the blockage or restriction, (d) a narrow tubular memory metal mesh that expands due to body heat after it has been placed in the blood vessel.
The market driven idea of using memory metals to solve the blocked blood vessel problem is a great idea as there is a definite need for this solution. Stabbing in the dark trying to find applications for memory metals is more difficult and often leads to ideas that have no place in the market. Now consider the following – how many patients with blockages could suggest such a solution to you during a focus group session?
This example is extremely simplified, but at its core is a real problem that must be solved in order to help patients to avoid cardiac arrest. With this problem in mind, a statistic of the number of people with such blockages or restrictions would in itself tell you that the solution would probably succeed in the marketplace if an appropriate solution can be found. At the other extreme, if you have a technology looking for an application, many of your ideas would probably fail merely because there isn’t a need for it. Focus your energy and resources for real problems that will offer real benefits should the solution work and be viable.
Being market driven means that you are leading the customer to where they need to be; you are not being led by the customer to where they think they need to be, which is more often than not, the wrong place to be.
Customer driven means becoming completely focused on the expressed needs and wants of your customers. This is a very good strategy but has serious limitations. Listening to customers who do not know, nor understand, what they need, can lead you blindly down the garden path. This is because the average customers can only tell you what they already know, which is generally what has already being done before and they saw it available as part of a competitors offering. Customers don’t think ahead a lot of the time and they don’t understand very much about what is possible using today’s technologies. They only know what they already know and what they already know is what you get.
However, becoming market driven means looking their expressed needs and looking deeper at the latent and previously unknown needs of the customers. In other words, delivering products that meet their current needs and, more importantly, the future needs that the customer doesn’t even know that they have yet.
The best ways of capturing these needs are: (1) using ethnographic/anthropological analysis, (2) gathering and analysing customer data, and (3) identifying opportunities within the customer data. The key here is to look at what the end result of the innovation is to be - what job it has to do? Then look for solutions/technologies that will do that job.
Having a technology and looking for applications is often out of whack, except in the case of some radical discovery. An unmet need looking for a solution or a technology is a much better starting point for developing a new product. Offering products that meet the needs associated with these new found opportunities will lead to success in the marketplace as customers will able to get a particular job done that they previously found difficult to do. This results in increased sales and increased customer satisfaction – a real win-win outcome for both the product developer and the customer.
An example of this is the principle of memory metals. Memory metals are metallic materials that can transform from one shape into another after they go through a temperature change (within which that transformation temperature for the material exists). Finding applications for these metals can be very fruitful and some creative people brainstorming ideas could arrive at many applications for such materials. However, if you examine the needs of patients with cardiovascular problems, you will find that many of them suffer from blocked or restricted blood vessels due to the build up of plaque. What these patients need is some structure that can be used to open up a blocked blood vessel. To achieve you may set out the needs as follows: (1) we must be able to deliver the structure to the place where the blockage exists, (2) it must be capable of supporting the blood vessel from the inside, (3) it must be biocompatible, (4) the blood vessel must be opened outwards to widen it to allow for better blood flow. If you examine these requirements and then look for a solution you may think along the lines of: (a) a tube that lines the blood vessel, (b) a tube that must be small enough to fit into the vessel, (c) a tube that expands inside the blood vessel to open out the blockage or restriction, (d) a narrow tubular memory metal mesh that expands due to body heat after it has been placed in the blood vessel.
The market driven idea of using memory metals to solve the blocked blood vessel problem is a great idea as there is a definite need for this solution. Stabbing in the dark trying to find applications for memory metals is more difficult and often leads to ideas that have no place in the market. Now consider the following – how many patients with blockages could suggest such a solution to you during a focus group session?
This example is extremely simplified, but at its core is a real problem that must be solved in order to help patients to avoid cardiac arrest. With this problem in mind, a statistic of the number of people with such blockages or restrictions would in itself tell you that the solution would probably succeed in the marketplace if an appropriate solution can be found. At the other extreme, if you have a technology looking for an application, many of your ideas would probably fail merely because there isn’t a need for it. Focus your energy and resources for real problems that will offer real benefits should the solution work and be viable.
Being market driven means that you are leading the customer to where they need to be; you are not being led by the customer to where they think they need to be, which is more often than not, the wrong place to be.
