My Photo


  • 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.

Twitter Updates

    follow me on Twitter


      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.
    AddThis Social Bookmark Button

    « Tagging the Physical World | Main | A Second Look at the Customer Segment Advocate Role »

    October 17, 2008



    These safeguards create friction and a lot of unnecessary work for your employees, your partners, and your customers. Our recent Customer Scenarios in a wide-variety of industries show dramatic opportunities to save money and increase revenues by shifting to a customer-trust model.

    Dennis McDonald

    I agree that giving customers more say and less punishment is a good idea. When you start talking about the potential of "web 2.0" based solutions, though, I don't think people understand the costs involved in people time to implement, manage, and monitor the types of solutions you recommend.

    I want to believe that increased interactivity and customer involvement can be supported without hiring more staff. How do we know that's the case?

    Colin Shaw

    A good article thanks. I agree that building trust with companies is key. Along with the steps you outline, in my view for these to be effective the company will need to consider the mind set of the organization. We typically see that not only do they not trust the customer, they don't trust the employee either! I could list a series of examples which effectively say to the employee "we don't trust you". For example the amount of money an employee is allowed to sign off for a Customer complaint. I recently wrote about what some policies that produce "bad profits" in my blog. The whole area of trust needs to be addressed and this is behavioural.



    One quick comment. Maybe what companies should also do is empower employee and making them efficient at discussing with customers.

    In the 90's customer's were connecting to corporate " customer contact center", now almost every employee is a contact point for customers in blogs, twitter, facebook which provide a huge opporunity for customer insights and customer satisfaction (Social contact centers?).

    What's critical for companies is to empower and provide support to their employee so that they deliver a high quality contact, whether in generating awareness, pre sales, support..

    What's also critical is for companies to leverage their employee's activity in the social web.


    Patty Seybold

    I like your five simple rules of thumb, Graham.. probably a lot clearer than my ramble.. But you asked and I'll answer.
    You picked on customer self-service and wikis as being difficult to implement organizationally. I don't believe that they are.

    You also focus on valuable customers and suggest that companies focus on them, and the folks who serve them--which makes sense.

    Actually, the prescriptive comments at the beginning of this post are probably the most profound. Reverse your policies from distrusting customers to trusting customers and you'll eliminate a lot of costs while vastly improving customer experience. These are policy changes; not massive initiatives. Often policies can be shifted and a few business rules tweaked. As a result, the costly practices that you have put in place to penalize 95% of your customer base in order to protect you from malfeasance or fraud from 5% or less of your prospect base can be eliminated. This lets your employees deliver much better, streamlined service at lower cost, and keeps valued customers much happier.

    Graham Hill

    Hi Patty

    I remember back in the 90s when Economic Value Added (EVA), People Value Added (PVA) and Customer Value Added (CVA) were all the rage. The idea was that businesses should be managed by looking after shareholders (EVA), staff (PVA) and customers (CVA) in equal measure. When those businesses hit hard times, the first measure to be dispensed with was PVA. And when the internet bubble burst, CVA was quietly dropped too, as businesses scrambled to protect EVA and to survive.

    Welcome to 2008. We are at the start of what the OECD thinks will become a prolonged recession possibly lasting into 2010. Companies have already started to make knee-jerk cutbacks without thinking through their predicament.

    And there is the key problem. They haven't stopped to think before making cuts.

    1. They haven't stopped to think which of their customers are the most valuable to them.
    2. They haven't stopped to think about how they deliver value to their most valuable customers.
    3. They haven't stopped to think about who within the organisation is involved in delivering value to customers.
    4. They haven't stopped to think about how this creates value for shareholders.
    5. And they haven't stopped to think about how they should ring-fence this profitable value at the same time as they significantly reduce costs.

    Which brings me back to your very timely post. I wonder how many of the many financially expensive (e.g. implementing self-service) and organisationally complicated (e.g. implementing wikis) things you suggest would pass the five simple 'stop and think' sense tests outlined above.

    I fully agree that we should not throw out the customer whilst making necessary cost cuts. And that we should focus on 'Being Better, Not Doing Less'. But I think we need to understand the customer value equation from both sides in much more detail before proceeding.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

    The comments to this entry are closed.

    Patricia Seybold Group Web Site

    RSS 2.0 Feeds
    PSGroup New Research
    Add the latest research to Google
    Add the latest research to My Yahoo!

    Your email address:

    Powered by FeedBlitz


    • Google Analytics for Blog
    Blog powered by Typepad