Performance challenge
Delving deep into how customers actually use the company's products and services.
Best company response
Companies that cast a wide net to monitor changes in customer behaviors and expectations are more likely to anticipate--even predict--trends that will affect them. But relying exclusively on traditional intelligence such as broad market studies increases the risk of missing key breakthrough information. Instead, companies that apply best practices incorporate the voice of the customer into their market research. Weaving their perspectives, ideas, and insights into product development, brings greater insight into customers' current and future needs. Such a holistic view increases chances of developing products and services that customers will readily purchase. To create a flow of useful information that can help spur growth by discovering new ways to satisfy customers, leading companies:
Success story
One old line, hierarchical, and highly successful company is not afraid to get very close to its customers. For example, managers and senior leaders of this diversified home products company periodically move in with representative customers for weeks at a time. This helps them understand the needs of customers from around the world with lives far different from their own. For instance, it was a common belief that people without modern washing machines, such as residents of low-income areas of Mexico, do not use fabric softener. However, through the "living it" program, the company discovered that more than 85 percent of this market uses softening products, even those who wash clothes by hand. The challenge of developing a softener specific for this market was compounded by the lengthy and water-consuming process used to ensure high standards of cleanliness using manual laundry techniques. Researchers realized that solving those issues was the key to gaining market share. The softener that was eventually developed required a third of the water and reduced the number of washing steps from six to three. It was an immediate success.
Measures of success
Leading companies monitor how well they are in touch with customers' precise needs and changing behaviors by tracking performance measures such as:
Delving deep into how customers actually use the company's products and services.
Best company response
Companies that cast a wide net to monitor changes in customer behaviors and expectations are more likely to anticipate--even predict--trends that will affect them. But relying exclusively on traditional intelligence such as broad market studies increases the risk of missing key breakthrough information. Instead, companies that apply best practices incorporate the voice of the customer into their market research. Weaving their perspectives, ideas, and insights into product development, brings greater insight into customers' current and future needs. Such a holistic view increases chances of developing products and services that customers will readily purchase. To create a flow of useful information that can help spur growth by discovering new ways to satisfy customers, leading companies:
- Spot trends through the normal course of work.
- Observe and experience customers' needs.
- Use an online advisory panel to see changes as they unfold.
Success story
One old line, hierarchical, and highly successful company is not afraid to get very close to its customers. For example, managers and senior leaders of this diversified home products company periodically move in with representative customers for weeks at a time. This helps them understand the needs of customers from around the world with lives far different from their own. For instance, it was a common belief that people without modern washing machines, such as residents of low-income areas of Mexico, do not use fabric softener. However, through the "living it" program, the company discovered that more than 85 percent of this market uses softening products, even those who wash clothes by hand. The challenge of developing a softener specific for this market was compounded by the lengthy and water-consuming process used to ensure high standards of cleanliness using manual laundry techniques. Researchers realized that solving those issues was the key to gaining market share. The softener that was eventually developed required a third of the water and reduced the number of washing steps from six to three. It was an immediate success.
Leading companies monitor how well they are in touch with customers' precise needs and changing behaviors by tracking performance measures such as:
- Frequency of efforts to spot trends and warning signals
- Percentage of valid predictions about shifts in consumer demands
- Percentage of profitable innovations based on customers' use of products
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