Archive for March, 2010

Have you ever wonder why very expensive and popular software can be very user-unfriendly and might have a lot of bugs? What about a big and profitable company that has very bad customer service? Yes, they are very common. We see and experience them almost on a daily basis. In an ideal world, very expensive software should be user friendly and bug-free, and a big and profitable company should have good customer service.

So what’s the main issue here? When a company was still small, it usually imitates bigger companies, and when it gets bigger, it tends to compete directly competitors with comparable size. The only different between them are the budget limit. Small companies might just have enough budgets to follow the bigger companies, while big companies can afford to hire people to spy on their competitors and analyze them. So what’s missing?

Most of companies are missing the big picture. Products and services are meant to solve problems for customers. Customers are the ones with the final decision to buy or not to buy. No purchase means no profit, it’s that simple. The only thing that every company should focus on is to make them satisfied and coming back for more. With all these in mind, naturally customers should be the centre of innovation. The intimate relationship with customers will result in profits, loyalty, and innovation.

Customers as the source of ideas

First of all, we should realize that it is impossible to create a perfect product or service. If there’s one, then there is no need for substitutes because people would never buy them. IPhone, the best cell phone in the market, still has to compete with Nokia, Sony Ericsson and others alike for the same reason: it is just not perfect.

Secondly, customers are not perfectly rational human being; they are somehow erratic and illogical. People are also easy to confuse and forgetful. The level of irrationality between people also varies. I could buy a product purely because it has an emotional value, even though for some people it could be considered as worthless.

Thirdly, customers are not born equal. Some customers are easier to deal with than the others. The level of information that customers have and their capability to process that information also vary.

With these three main variables, it is very clear that every product in the market will have a chance to survive, as long as it is communicated in the right way and it meets the specific requirements determined by the right segment of customers. The best way to deal with this problem is to involve customers by getting their ideas and use them in the development process. Jeff Bezos, the founder of Amazon.com (July 2009) in a Business Week article titled “ The World’s Masters of Innovation” talked about his innovation philosophy: there’s no bad time to innovate. You should be doing it when times are good and when times are tough—and you want to be doing it around things that your customers care about.

How can we get ideas from our customers? The best place to look for ideas is from the customer complaints. As a product developer, this is the first place I would go, because there are tons of suggestions to think about and they should be prioritized because they will directly affect customer satisfaction, which eventually will lead to customer loyalty. If you can find out what your customers like or hate about your products or services, you will have something to improve upon.

In order to be more positive when listening to grouchy customers is the fact that they spent an amount of time and effort to file the complaints which means that they care about the products or services you are offering; therefore we should appreciate them accordingly.

There is no limit to what a company can innovate when it starts to listen to its customers. Remember, those customers might also use other products, so when they file their complaints, subconsciously they have compared your product to other available products in the market. Using their suggestion, a company can improve an existing product, expand a single product into a product line or create a totally new product line for a specific market segment. Of course, the strategy will be more comprehensive and effective if combined with other market and competitive analysis methods.

To conclude this article, I suggest every company should give more attention to customers in every stage or marketing cycle from pre-sales to post-sales. With superior customer service, a company will be able to enjoy sustainable profits driven by its customers’ loyalty, and get tons of ideas for innovation. If you implement this, you might be surprised to find out that your disgruntled customers might turn out to be your most valuable ones. PW

This article is published on Canadian Institute of Marketing newsletter Winter 2010 edition, volume 6, issue 1.

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