Innovate through a downturn, but make it customer-led

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Okay, so it’s been a tricky week so far for businesses round the world. I knew it was bad when the chatter  around the coffee machine in our office on Tuesday morning wasn’t about something that was on TV last night, or about something going on in the office. It was about how they were going to face the current economic downturn. From banks failing and being taken over by the state, to falling retail spend and even reports that Britons are raiding their piggy banks, there’s only one thing on people’s minds this week

And at times like this it is interesting to see how businesses react and respond. Of course, there are the counter-cyclical industries (lawyers, accountants, take-away food, bunk beds…) but how do the rest plan and build a strategy in times like this?

For most businesses there are probably two pieces of advice:

  1. Make sure you are close to your customers and that they are close to you. It should be your brand they think about when they do want to make a purchase and you should be aware of what they think and how their habits are changing.
  2. Innovate to stay ahead of the game. A crisis is a great time to innovate – you have to think of ways of staying ahead of the competition, of being more efficient or of new products that you can offer. It’s true of war-time, where many of the best innovations (from the pie-chart to nylon) originate; and it’s true of business during challenging economic times.

So how do you innovate at a time like this? Well we want to innovate to mean that we continue to attract customers and meet their changing needs. We want to make sure our products are meeting essential needs and are of benefit to them. And if possible we want to make sure that we are more efficient in the way we do this so that our own costs can be controlled.

What is common across all of these aims is the need to better focus on the customer and what the customer wants. That’s why the best innovation during these times will be customer-led innovation. Rather than asking questions of customers and then going away and coming-up with ideas to meet what you find (customer-centred innovation), it’s about co-creation and really working with your customers innovate and have new ideas.

So how do you let the customer lead your innovation process? Well there are probably a few things all organisations can do:

  1. Call ten of your customers from the last six months and ask them what you could do better – they’ll appreciate the personal touch and you will start to get some ideas
  2. Bring together a group of customers (either offline or online) to co-create and share ideas based on specific areas you think you could improve. This will help you generate some ideas to contribute to specific areas you’ve already identified
  3. Bring together a group of customers (and perhaps non-customers) in an online community where they can co-create, share ideas and innovate with you over a much longer time-scale.

This latter suggestion will be most effective in terms of identifying those innovations that are most likely to help you face the economic downturn. The benefit we see at FreshNetworks of building online innovation communities is that you get ideas in areas you had never thought of before. We’ve helped clients to reposition their product and even to just talk about it in different ways, using the language their customers use. Real customer-led innovation will shock and surprise you, because it’ll be the thing you haven’t thought of before. But in the current climate, it’s these new and effective ideas that you need.

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9 Responses
  • Oct 1, 2008

    I’m all for customer-led innovation, but giving your customers that kind of control can backfire. Customers can give two kinds of feedback. Negative feedback when they are emotionally attached to the crisis at hand and make irrational decisions, “Folk Devils and Moral Panic” from Cohen is a good read regarding the psychology of these things. Unconsciously you can learn more from your customers without relinquishing control. (http://www.tomvanlerberghe.com/?p=642) Danger is that you make decisions based upon that feedback and make the wrong choices.

    Good feedback can backfire as well. Fortis (our Belgian Northern Rock) changed its slogan because people were saying it was misplaced at this time. By doing this they focus again on the current problems and got bad press (again).
    FYI… the old slogan was “Here today! Where Tomorrow?”…

    Tom Vanlerberghe Oct 1, 2008
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  • Oct 1, 2008

    Tom,

    Thanks for the comment. I agree that handing over control to customers can backfire. I guess it’s more about working *with* your customers and involving them actively throughout the process. So you work with them on an equal footing when you innovate. In our experience this works best as specific activities alongside the ongoing research and observational insight you can get from customers.

    Nice slogan by the way. Here Northern Rock used to use “Looking for a Loan?”. Turns out the answer was yes.

    Matt

    Matt Oct 1, 2008
    Reply
  • Oct 1, 2008

    Matt,

    I’m curious how you keep them involved and keep a certain level of control? Isn’t the problem with a lot of companies they get blindsided by inhouse panic they almost take any advice like it came from the next guru?
    If you collect heaps of data from your customers, how do you analyse it as objective as you possibly can?

    BTW, the Fortis visual to go alongside the slogan http://hugin.info/134212/R/1227780/260226.jpg, in an earlier version the curve just went up… ;)

    Tom Vanlerberghe Oct 1, 2008
    Reply
  • [...] in Recession Matt Rhodes posted under a similar title today (http://www.freshminds.net/2008/10/innovate-through-a-downturn-but-make-it-customer-led/), and I have to say that I agree with him.  My feeling is that this is a time when businesses of [...]

    Reply
  • Tim
    Oct 1, 2008

    I think this is where you see the distinction between a company who “get” Web 2.0 and those who don’t. It’s easy to set-up a blog, it’s easy to give customers a forum to have a “conversation” with you, it’s easy to give the email address of top management on your website. But this doesn’t mean that you “get it”. It just means you’ve joined the crowd. And I think this is where you get feedback that isn’t constructive or focussed.

    Giving your customers an option to talk to you isn’t enough, you need to actively engage them and show them that you’re listening to what they say. That’s when you get a conversation going and I think that’s when the useful information starts to come out.

    As for how do you objectively analyse the data – surely the answer is get FreshMinds to do it? ;-)
    Tim

    Tim Oct 1, 2008
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  • Economic Downturn? Now Is The Time To Innovate! | KyleLacy.com
    Oct 3, 2008

    [...] switch up and think differently? NOW. Matt Rhodes at Freshnetworks recently wrote a post entitled Innovate through a downturn, but make it customer led. He gives a few ideas on how a business owner can innovate and take control of their companies to [...]

    Economic Downturn? Now Is The Time To Innovate! | KyleLacy.com Oct 3, 2008
    Reply
  • Oct 20, 2008

    I’m with Tim on this one. It takes going beyond giving customers an option to talk to you and showing them that you’re really listening. I think I would add a fourth option to your post, which involves closing the feedback loop by continually reporting back to your community with the progress of your innovation initiatives. Without that step, you’re merely just giving customers an option to talk.

    Matt
    PluggedIN Co.

    Matt Foley Oct 20, 2008
    Reply
  • [...] exactly will the economic downturn impact research?” We’ve posted before about how brands can innovate through an economic downturn, but what about the agencies [...]

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  • [...] posted before about the power of co-creation and of innovating with your customers. An online research community can be a great way of both getting new ideas organically, and of [...]

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