Innovation Leadership TrainingDay Two

Insight Tools

February 6, 2009

All materials © NetCentrics 2008 unless otherwise noted

Welcome• We’ll spend the next hour or so examining

several tools and techniques to gather more customer insight

What We Want to Accomplish

Goals for this section

• Our goal this section– Examine several techniques to gain more

customer insight• Voice of the Customer• Ethnography• Lead Users

– Understand the value proposition of each technique and when to use them

Key Points• Market research is an important component of

innovation but we need other means to gather customer insights– Market research often imposes our perspective on

the questions and therefore the answers

• Other helpful tools exist but we need to understand their value proposition and costs– Voice of the Customer, Ethnography and Lead users

provide helpful information in certain circumstances

Market Research

• We all rely on traditional market research to understand what customers want and what they are thinking

• There are several significant risks if you rely on standard market research

Henry Ford

• “If I’d asked my customers what they wanted, they would have said a better horse.”

• People have a hard time conceptualizing future products and services and can’t easily respond to traditional market research where new products and services are concerned

Other Concerns

• Traditional market research is often conducted for a specific outcome or aligned to a specific product or service

• There’s a “Hawthorne” effect with traditional market research – the questions we ask, or don’t ask, frame the data we get.

• We usually ask existing customers about existing products and services

Insight Goals

Existing New

Existing

Prospects

Products/Services

Customers

Increasing difficulty and value

Methods, tools and techniques changeFrequency dropsValue increases

Three other tools to consider

• To obtain insights that are less influenced and more actionable, consider– Voice of the Customer research– Ethnography or “cultural anthropology”– Lead user identification

• We’ll consider each of these briefly– Short definition– Why/when useful– Effort/commitment

Differences

• What makes these approaches different?– More interaction with the prospect or customer– More observation of what they do– More conclusions drawn from observation– Less quantitative, more qualitative– In many cases actions or needs are demonstrated

Voice of the Customer

• Voice of the Customer research seeks to gain stated and unstated needs from customers through deep interviews– Similar to market research in that it uses prepared

questions– Usually much longer in duration, often taped or filmed– From these interviews or discussions need statements are

extracted– The need statements are prioritized

Why or when useful

• The voice of the customer approach helps identify stated needs and by observation or deduction uncovers unstated or unmet needs

• Useful when your team can identify likely customers and can actively participate in the interactions to observe what customers say

Investment

• The investment in a Voice of the Customer study is similar to a standard market research effort, usually with less participants and more involvement from the sponsoring team

• A VoC effort usually lasts from 4 to 6 months and requires active involvement of the sponsoring team

• Typically a third party facilitator conducts the sessions

Ethnography

• Also called cultural anthropology, ethnography is an activity that relies less on prepared questions and surveys and more on intense observation

• Ethnographers or cultural anthropologists carefully study customers to ascertain their stated and unstated needs, and how they solve problems or address unmet needs

• They follow up the observation with specific questions about the activity

Why or When useful

• Ethnography is useful when you are trying to understand and define unspoken/undiscovered needs and align to existing practices– Keep the Change is a good example

• Ethnography is also valuable at identifying nascent trends or activities in customer segments– Trends in fashion and other areas that are just

emerging are often discovered by ethnography

Investment

• Must identify a segment of customers who will agree to be observed in their day to day lives

• Ethnography requires an experienced observer to identify key actions

• If the first two conditions are met, the timeframe does not have to be long

Lead Users

• Coined by Eric von Hippl, the author of Democratizing Innovation

• Lead Users are people who are creating augmented or improved solutions with existing products or services

• Think “mashups” on the web or the classic example of mountain bikes

Early Mountain Bikes

Why / when useful

• Lead users are useful because they are individuals who are creating new solutions to solve unmet needs using your products or those in your market

• They are also often on the cusp of new trends

Investment

• The challenge with “lead users” is not a cost issue but a discovery issue

• You will need to find and interact with lead users

• Best place to find them is at trade shows, conferences and online on discussion forums

• Dell’s IdeaStorm site serves a dual role – to capture ideas and to identify lead users

ComparisonApproach Value Proposition Issues/Challenges

Voice of the Customer Stated and unstated needs Must have experienced VoC observers

Ethnography Identifying unmet or undiscovered needs through observation; identification of new trends

Identifying a sample of customers who will allow close observation; Experienced ethnographers

Lead users Solutions to unmet or undiscovered needs; identification of new trends

Identifying the lead users

Key Takeaways

• Market research is important but only one tool to gather customer insights/feedback

• Market research contains some bias and is not always appropriate for unmet/undiscovered needs

• Voice of the Customer, Ethnography and Leader user identification can provide increased customer insight

• Understand each tool and its appropriate usage

Questions

Exercise