Customer centric ‘hyper-innovation’ – built to last

The disruption over the past year has triggered a rapid change in customer behaviour, including my own. As customers, we expect even more support and service than ever. If a business can’t immediately deliver to our needs, we’ll just click online to find a business that can.

My colleague Lisa Bora, a Partner in our Customer Brand and Marketing Advisory practice, puts it simply: “Ultimately, customers should not be assumed to be loyalists,” she says.

But if I look for a silver lining for businesses, it’s that so many have quickly risen to this challenge. They’ve put the needs of their customers first and have refocused the way they innovate to meet those needs. It’s a level of ‘hyper-innovation’ that would have taken years to achieve without the impetus of the COVID-19 pandemic.

After this kick start, I’d love to see it last. But that leaves a challenge: how can you do it better, and how can you keep it up?

From the outside in

I discussed these questions with Lisa, who is passionate about helping organisations to design their innovations around the customer. We reflected that pre-COVID-19, a lot of innovation was happening in the middle and back offices, and was largely about improving processes for internal benefit. For example, the innovations the banks undertook to offer faster online loan applications had a lot to do with cutting down processes and costs internally, with the secondary benefit of improving the customer experience.

COVID-19 has forced organisations to swap this around to start with the customer need, then thinking of innovations to meet those needs, then aligning the middle and back offices to bring them to life.

This has been fascinating and inspiring to watch. Done well, we know there’s a lot of evidence to suggest this outside-in approach to innovation can bring sustainable growth.

Knowing your customers more than ever

Lisa says there’s no benefit in “innovation for innovation’s sake”, or “trophy projects that never see the light of day or meet a human need” – common issues that we both see take up valuable time and resources. Getting to know your customers at a micro-segment level (their drivers and intent signals) rather than as part of a broad approach alone, such as demographics can help. As mentioned in my previous blog, Counting on data, essentially, this is using data and analytics capabilities to understand more nuanced insights about your customers. Knowing who is driven by price, who is driven by service, or who is driven by a fear of missing out, means you can tailor innovations to match.

If you back this up with qualitative studies (such as focus groups), you can start to see really interesting discrepancies between what people say they’ll do, and what they actually do in their consumption behaviour. They might say they buy based on environmental concerns, but at the register they’re really driven by discounts. Ultimately you want to be able to determine who are your low-value versus high-value customers, so you can invest in the high-value groups.

It's all about entering into a value exchange with your customers. When they share their information, they want innovative products and services that meet their needs in return. If you’re not taking advantage of that customer data and insight, then, as Lisa puts it, “it’s a failure on the organisations part”.

Connection makes the difference

Innovation starts with the customer, but the whole organisation has to get behind it. For example, in one recent project, we’ve been helping an organisation that urgently needed to improve its service levels. With so many new direct-to-consumer models launched during the pandemic, this organisation was forced to rethink its value proposition and service delivery design. We put in a connected technology approach, addressed business processes to drive greater speed and deliver greater insights to inform innovation through the business – sales, service, finance, operations aligning far greater together. They can now see customer needs, innovate both big and small, and get new products and services developed and out the door.

Can’t stop, won’t stop

We hope to see all of this hyper-innovation turn into a philosophy of endless innovation, with continuous feedback loops and continuous improvement. We’re in such a competitive landscape, it’s a hugely missed opportunity if you don’t try this innovation agenda, as long as it’s centred around that customer need and has the right technology to help.

Asking questions like, ‘Are we solving for the problems that our customers have told us they’re having, and that our data reflects?’ will help keep up the momentum.

Lisa has a great way of summing up the bigger picture benefits of customer-centric innovation: “I really do believe that if you follow the customer, revenue follows accordingly, and so too does employee satisfaction and retention. There’s a strong correlation between all these things.”

I couldn’t have said it better.

What do you think you can you do to better understand your customer needs and rally your organisation behind those needs to innovate?