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In Alan Murray’s latest Wall Street Journal article, he mentions that when the Journal’s CEO Council was asked to name the most influential business book, many members cited Clayton Christensen’s The Innovator’s Dilemma. What does Christensen say about innovation that is so compelling? Murray summarizes:

“That book documents how market-leading companies have missed game-changing transformations in industry after industry—computers (mainframes to PCs), telephony (landline to mobile), photography (film to digital), stock markets (floor to online)—not because of ‘bad’ management, but because they followed the dictates of ‘good’ management. They listened closely to their customers. They carefully studied market trends. They allocated capital to the innovations that promised the largest returns. And in the process, they missed disruptive innovations that opened up new customers and markets for lower-margin, blockbuster products.”

How is it possible to listen closely to customers and still miss the game-changing trends? How can you get an understanding of market changes and be the first to capitalize on cutting-edge opportunities?

• Ask the right questions. A waiter buzzing by your table, asking “How is your salad?” is unlikely to get responses about the long wait, the impossible parking, or snooty staff. The same can be true of your customer feedback efforts. Narrow questions lead to narrow answers. Asking broader, open-ended questions will give your customers the room to comment on what’s important to them and what may be missing in your current solution equation.

• Talk to customers and prospects. Start with the 20% of customers who bring in 80% of your business. Since they are heavily reliant upon your products/services and your relationship, they have a lot to say. Plus, they have insight into how their marketplace is changing and what threatens their market share and margin—insights into what new markets may be emerging. (After obtaining this critical feedback, then move out to second/third–tier customers and prospects.)

• Ask in the right way. Valued customers open up to other people—not a computer screen or piece of paper. Our experience shows that a face-to-face conversation is optimum. It’s the best way to read reactions, probe, and clarify—the best way to achieve understanding. (Save surveys for your second and third–tier customers.)

• Understand that all feedback is not created equally. As Vince Lombardi said, “Nothing is as unfair as the equal treatment of unequals.” Some people will have greater insights than others due to their experience, their area of focus, and their personal investment in the business relationship. If you listen carefully, you can pick out the golden game-changing comment, even if it isn’t often repeated by others.

Seeing around the next corner can be tricky. Leverage your customer relationships by obtaining critical feedback to drive toward unexpected and profitable innovation.

Rhonda Sunnarborg, Senior Consultant
E.G. Insight
www.eginsight.com

After more than ten years in this business, I have read thousands of interviews our clients have conducted with their most important customers. I am sometimes asked what, if anything, surprises me about the challenges and opportunities our clients have with their customers. The truth is that there’s not a whole lot that surprises me anymore. For all that is unique about every organization, there are struggles that many companies seem to have, regardless of the industries they represent. One of the issues that is common – though still somewhat surprising – is that customers often say that their suppliers need to do a better job of communicating their capabilities.

Rather than explain in detail, I’ll let the customers do it themselves in the form of quotes we’ve seen from client interviews. Each of the following comments were made in response to the question, “What should we improve?” Some of what they’ve said:

“Your company would do well to better market and display its capabilities…”

“Promote your complete product range and service capabilities.”

“Better anticipate our needs and convey your capabilities and innovations to us.”

“You are only touching the surface of the opportunities at [customer], and we have been asking for your company’s help for a long time.”

Each of these examples indicates that the customer is willing, even motivated, to buy more from the supplier organization. It’s almost as if the customer is saying, “We’d be happy to do more business with your company, if only we knew what else you could do to help us.” This is what a former boss of mine, Tom Haller, used to call marketing at the customer interface. These customers aren’t asking for more brochures or product specification sheets. They want the supplier to understand their business needs and challenges and recommend products or services that can help them save money, make money, or bring them some sort of competitive advantage.

The bottom line: Customers often extend what amounts to an invitation to the party. If you forget to RSVP and fail to show up, next time the invitation may go to someone else.

Eric Engwall, Managing Partner
E.G. Insight

As we’ve mentioned before, data about customers is multiplying. But information about customers – the kind that informs confident business decisions – can be harder to come by. So when I came across this quote on the blog www.gilliganondata.com, it stuck with me:

“A man with one watch knows what time it is; a man with two watches is never quite sure.”
– Mark Twain

I think there is a lot of truth to that, and we see the effect in the work we do with our clients. When it comes time to make those big business decisions – like entering a new market, developing a new or improved product, or changing how customer service works – what leaders don’t need is more data. They need better information.

So, a big part of our point of view is that getting in-depth information from the most important business-to-business customers yields better information – and better decisions – than getting a pile of “shallow” data from a scattered sample. Selling to businesses is complex enough without mixing in data that comes from customer contacts who may not have much say in the actual buying decision. Less truly can be more.

So, when you’re looking into your next voice of the customer or other research project, it’s a good idea to think about what you’re really trying to get: one watch or two?

Nick Wassenberg
E.G. Insight

As part of a series outlining the purposes, objectives, and tools used by companies worldwide, Business Insider spoke with a group of customer research experts to get the latest trends and issues related to voice of the customer programs. E.G. Insight’s Managing Partner Eric Engwall and Research Analyst Nick Wassenberg provided their points of view about gathering feedback from business-to-business customers.

Excerpt from the article:

Nick Wassenberg, Research Analyst for E.G. Insight, Inc., suggests several factors that could present ideal times to measure what your customers are thinking.

For internal factors, such as making the decision to expand into new markets, you would need to perform customer research to understand what those new customers want. And then there are external factors, such as the recession, which might inspire you to find out how it’s affecting your customers’ buying decisions and needs.

As Eric Engwall, a managing partner for E.G. Insight, puts it, “Reality never works out like your business plan.” So it’s crucial to get out there, find out what your customers are thinking, and adjust.

You’ll make the biggest impact if you focus your customer research on these topics:

• More effective product development
• Better customer service and satisfaction
• More targeted marketing efforts
• Increased knowledge about your competitors’ products and how customers are using them

The series is sponsored by Toyota and will be released in two parts: the first is a summary of what can be learned from listening to customers and the second reviews various tools companies can use to capture customer feedback.

The full report can be found here: http://www.businessinsider.com/what-you-can-learn-from-listening-to-your-customers-2010-5