Your next innovation will come from your customer

Take time to understand your customers’ long-term plans and how they are innovating and improving

Heidi Pozzo

When was the last time you innovated? Just think about the constant stream of new products you see hitting the market every day. Growth and innovation are everywhere, and are necessary if you want to continue to be successful. Streamlining and doing process improvements will only get you so far. You must innovate to stay relevant. Even if you don’t have a huge research and development budget, you can innovate by engaging your customers.

Your customers know what is important and valuable to them, but they will only share it with you if you have a strong, trusting relationship. When was the last time you discussed how you work together and how you can make each other successful? If you aren’t having these conversations, you are missing the boat. Your customer holds the key to your next innovation. Here’s what you need to do to unlock it:

Walk the floor with your customer

Several years ago, I went to Florence and visited the Academia where Michelangelo’s David is housed. Until then, I had only seen pictures in books; they were small and flat. It wasn’t until I walked into the gallery that I realized the statue is nearly two stories tall! How was Michelangelo able to carve a statue like that with the tools available in 1501? There is nothing like seeing something in real life to get perspective.

The same is true with understanding the operations of your customers. Without walking the floor, it is hard to understand how their process works and where your products fit in. You should have a team of your people regularly visiting your customers’ facilities. The team should include sales and operations leads. Your sales people know the customer and the market. Your operations people can see the product possibilities and how to make it work. As your team walks through the facility, think about how you can make your customers’ lives easier. Ask where the bottlenecks are, what slows them down or what would make their business even better. By doing this, you will discover the innovations your customer isn’t even thinking about that you can offer them.

Ask your customers what they value

A paper manufacturer I worked with produced paper that was used to make bags. It was squarely in the commodity category and could be manufactured by any number of companies around the world. After getting to know the needs of a particular customer, it was apparent that the customer machines were speed limited based on the three plies of paper being used. The company realized that it had access to raw materials that were not accessible to competitors, allowing it to produce a superior grade of paper. The superior paper would allow the customer to run its machines faster and they would use only two plies instead of three, reducing their cost for the paper. This innovation allowed the company to charge an increased price and it allowed the customer to have a lower cost because it used less of the paper and higher production because the machines ran faster. The company became known as a premium producer of the product, not just a commodity player. This innovation only came about after visiting the customer facility and asking them what they valued. It was a win-win.

When was the last time you asked your customer what they value? Take time to understand their long-term plans and how they are innovating. During these conversations you will hear about pain points and opportunities. These conversations can help guide you to finding a win-win situation. You will know when you find the win-win because it is valuable to both companies. It will be the key to your next innovation.

Discover what makes you unique and distinctive

Apple is well known for having new and innovative products. You see them everywhere and people line up to get the latest versions as soon as they are released; pre-orders are placed months ahead of time. Apple creates a perception in the marketplace that its devices are much more user-friendly than others. Its customers are loyal and pay for the value they perceive in the distinctive products.

What makes your company or products unique and distinctive? It may be that you have access to raw materials that others may not. Maybe your geographic location gives you an advantage. Maybe you have an asset base that serves as a barrier to entry. Maybe it is your customer service. Being clear about what makes you and your products unique and distinctive is critical. By focusing on the unique and distinctive side of your business, you will be able to innovate and keep your customers excited about doing business with you.

Call to action

Are you taking all of the actions outlined above? If not, it is not too late to get started. Start with your top customers first. You will find them by looking at revenue and profit by customer for three years. This will give you a perspective on your customer trends. Seek to understand where they see their business going in the next few years. When you engage with your customers on a deeper level, you will find your next innovation will come from them.

Heidi Pozzo works with leaders and businesses to achieve high performing status. To contact her, visit www.PozzoConsulting.com or call 360.355.7862.

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