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  • What is Outside Innovation?
    It’s when customers lead the design of your business processes, products, services, and business models. It’s when customers roll up their sleeves to co-design their products and your business. It’s when customers attract other customers to build a vital customer-centric ecosystem around your products and services. The good news is that customer-led innovation is one of the most predictably successful innovation processes. The bad news is that many managers and executives don’t yet believe in it. Today, that’s their loss. Ultimately, it may be their downfall.

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      Eric von Hippel coined the term "lead users" to describe a group of both customers and non-customers who are passionate about getting certain things accomplished. They may not know or care about the products or services you offer. But they do care about their project or need. Lead users have already explored innovative ways to get things done. They're usually willing to share their approaches with others.
      I use the term "lead customers" to describe the small percentage of your current customers who are truly innovative. These may not be your most vocal customers, your most profitable customers, or your largest customers. But they are the customers who care deeply about the way in which your products or services could help them achieve something they care about.
      We’ve spent the last 25 years identifying, interviewing, selecting, and grouping customers together to participate in our Customer Scenario® Mapping sessions. Over the years, we’ve learned how to identify the people who will contribute the most to a customer co-design session. These are the same kinds of people you should be recruiting when you set out to harness customer-led innovation.
      You no longer win by having the smartest engineers and scientists; you win by having the smartest customers!
      In more than 25 years of business strategy consulting, we’ve found that customer co-design is a woefully under-used capability.
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    « My Upcoming Book Has a Title! Outside Innovation! | Main | Getty Images: Making It Easy for Customers to Do Their Jobs »

    December 08, 2005


    Patty Seybold

    What wonderful points! That CRM is often designed more for financial types--e.g. those that want to know what we bought in the past, and maybe be able to forecast sales (in the case of opportunity management) than for sales and service folks--who actually WANT to establish a relationship with customers.

    I'd love to hear more about what you've found in your 3 years of mining email marketing responses, and what additional/new programs marketers could put in place to foster true LISTENING to customers...

    One of my favorites is the success that several companies have had to-date in leveraging online customer communities--communities in which customers are invited to participate in co-designing comopanies' future offerings. Are those the kinds of approaches you're thinking of?


    Dominique Lahaix


    Since we're provocative...

    Isn't the problem that CRM has mainly be engineered from Finance, as a mean to forecast sales ?

    This sounds to me like talking to my credit card and claiming having established a relation !

    CRM basic assumption is that by looking at my past purchases, the provider will know me.

    This may be true occasionnaly.. If I buy a digital camera , I'm probably going to buy photo paper one day but most of the time it's either not indicative or ... too late. (* )

    Coming back to the good old days, I have never seen a salesman jump on his financial records and look at my past purchases ( I may be gone by the time he's back)
    Instead he'll talk to me and he'll watch me trying to predict/assess my future projects and interests, pyschological profile aso..

    - in CRM, the R matters most or even more important, a L (for active listening) is deadly missing.
    - CRM is falling short because it's not watching the proper signals. (the customer not her/his credit card!)
    - Discovery is a mandatory part of any sales process and traditionnal CRM just bypasses it.

    I have been spending the past 3 years mining email marketing responses and I can tell you it's amazing to look at what customers read when attempting to know and predict their future purchases.

    I think it's time for marketers to step in and re-engineered a process that has been too much driven by finance.

    (*) by the way, most of the time, digital camera vendors would have no clue that I own one, since I would got it from a competitor. Not an easy situation to profile me.

    Patty Seybold

    Hi Dana,
    This post was MEANT to be provocative. So I'm delighted to get your reaction. No need to kowtow. We CAN be wrong and sometimes are... But here's the main point I was trying to make with this piece... whatever the virtues of CRM are--and there are many--most companies design their CRM strategies and systems from the inside out. To help themselves manage their customer information and customer relationships. They don't start with the first principle, to wit: Give your customers access to a complete (360-degree) view of THEIR information, accounts, products, entitlements and service and interaction histories. Then worry about the other things you need from a CRM system (e.g. marketing automation, campaign management, customer service, customer case management, sales pipeline, opportunity management, customer segmentation, customer profitability, customer experience metrics, etc..

    Is that principle #1 included in your "Eight areas that are critical to business?"


    Dana Richardson

    Hi Patty and brilliant readers - in the review on CRM and why it doesn't work there are many spots that trouble me. It's not the thoroughness of the research involved, I know you thoroughly research every item you put into the mill, it isn't that, more it seems to me that you may be skewed from the outset, albeit in perhaps a good way; by the very nature of the piece, why it doesn't work.
    Normally Patty your writing is so wonderfully balanced that such a vantage point never comes up, or, if you are proving an argument, you do it so thoroughly that skewed or not, it is, "right on."
    I'm not certain such is the case here- based on a very limited purview, and the ending paragraph.
    You have probably read so much more than me on this subject that I hesitate to bring this up, but the question still is one I feel you can bring light too, and perhaps even I may have missed in reading your writing. I saw your notes from Mitch Kramer, which made me wonder if you'd read or conversed with Paul Greenberg in similar mode?
    Please don't think me argumentative for sport here, that isn't the case, far from it, I respect your work, and research far too much to ever be flippant. Rather my inquiry goes more to the nature of CRM not so much as a sales tool, certainly it is that, but aren't we by definition limiting it's true nature, CRM's true nature, when we relegate it in such a manner of review? Let me put it this way, I see CRM as applying to eight areas critical to business in vogue- it seems from your writing that you see it in more of a limited horizon?

    The comments to this entry are closed.

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