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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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    August 29, 2008


    Kate @ crm software

    Well laid out and summarized. The consumers information should always be at the core of any customer orientated decision, that's where a lot of business go wrong.

    Patty Seybold

    Unfortunately, for most U.S. based companies, the two disciplines are not always aligned. Customer experience management typically deals with improving the end-to-end customer experience--across functional silos and touchpoints. (And yes, there are LOTS of organizational and technology challenges to overcome). But "CRM Initiatives" in many U.S. firms are essentially technology projects in which the holy grail is to pull together all the information about customers in order to have the proverbial "360-degree" view of the customer. People talk about CRM initiatives as being part of larger CRM strategies, e.g., customer segmentation, ability to deliver a more personalized experience and an attempt to pull together customer-impacting information across sales, service and marketing. My point, like yours, is that CRM and CEM ARE two sides of the coin. But perhaps more importantly, CRM should be about giving customers the information THEY need (not about giving us the information we need) and about delivering a great, seamless experience as they interact with our brands across all depts., channels, partners, touchpoints and processes.

    Thanks for your thoughts!

    Graham Hill


    An interesting post. Particularly the implicit suggestion that Customer Experíence Management (at your client) is significantly different from Customer Relationship Management. How did your client ever manage his Customer Experíence Management job if he didn't also have to grapple with "technology and organizational challenges"?

    In reality, Customer Experíence Management and Customer Relationship Management are just two sides of the same coin. Complete with much the same challenges.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Consultant

    The comments to this entry are closed.

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