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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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    « Do Customer Communities Increase Revenues by Active Customers? | Main | IS MICROSOFT READY FOR MICROSOFT’S “NEW DAY?” »

    November 24, 2006


    John Ounpuu


    FYI Blast Radius also published a report looking at Online Shopping in the US. This was the second year for the US report and the first year for the UK version. Full disclosure: I work for Blast Radius and was involved in putting the US report together. Both can be downloaded at No forms to jump through, just straight links to the PDFs.

    Patty Seybold

    Thanks for keeping me honest.. Of course I don't think that only the online experience is important. That's why I like Tesco, for example.. they offer a full service, and track your purchases, and try to streamline in the areas that matter most to customers in each neighborhood, and they also offer good online service. It's much harder to do a good job with multi-channel and cross-lifecycle customer experience than it is with online only.. you're right.. But what I liked about this particular online retail study (and what we also did when we used to do these) is that it included the end-to-end online experience, including the experience of calling to check on order status when required (already a strike against you).. and the experience of returning the product, not just purchasing it..

    Daniel Scocco

    I think Amazon deserves the first place. Despite the current situation the company is always trying to improve the customer experience, often through innovative ideas and platforms.



    The report and (others like it), that only look at the online shopping experience are misleading.

    Customers are by nature multi-channel beasts. As a recent McKinsey Quarterly article showed, customers use many different channels, for different purposes at different times, depending upon their situation. It is the summation of their experiences across all these (mostly off-line) channels and touchpoints that constitute the total customer experience.

    And customers conversations are mostly off-line too. As recent Keller Fay research showed, over 90% of customer conversations are still held off-line, rather than on-line. Word of mouth from peers adds reinforcement to customer' own perceptions of the the total customer experience.

    Just looking at the online sales experience is misleading. It is interesting, but it is no where near enough.

    Graham Hill

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