As the name suggests, customer-centric innovation revolves around the customer. This could be in the form of coming up with new products to meet customer requirements or involving customers in idea generation, market research, at-home testing and so on.
Customer-centric innovation is about putting the customers first, and the approach has the potential to boost profits in nearly every type of business, including retail, financial services, hotels, manufacturing firms, etc. Thus, there is a need more than ever, today, to listen to the customers and put them at priority.
Importance of Customer-Centric Innovation
“The old statistics: A satisfied customer will tell 2-3 people about their experience with a company while a dissatisfied consumer will tell 8-10. Platforms like Facebook and Twitter where a post or tweet can be shared thousands of times have amplified those numbers exponentially.
Social media has effectively turned customers into broadcasters! So better watch out! Not listening to customers can have a huge impact.”
The above quote sums up the importance of customer innovation quite well. You see, traditionally, companies approached innovation through research and development (R&D). However, these new products did not often bring much profit, since they did not meet customer needs. This is particularly bad since R&D is a costly process, leading to losses for the company if the resulting product did not make profits.
That is where customer-centric innovation makes such a difference. It helps improve communication between the company and its customers, allowing the company to provide a more satisfying customer experience. That, in turn, converts a first-time customer into a loyal and long-term one that also provides recommendations, and eventually more profit for the company.
Customer Centric Innovation and New Opportunities
Customer-centric innovation gives a company an edge over their competitors that do not use this approach. They gain knowledge that their competitors do not have, which allows them to stay ahead of the game.
What’s more, since the employees closest to the customer are more intensely involved in this process, employee loyalty increases, leading to reduced turnovers, and thrilled customers. Additionally, a customer-centric approach to innovation leads to new products/services that close the growth gap and meets customer needs.
Let’s take a look at this recent example of customer-centric innovation from Facebook:
Facebook listens to users and expands a safety feature.
Shortly after the Paris terrorist attacks, Facebook activated Safety Check, a feature that lets users tell their family and friends that they’re safe, for users around the affected area. Unfortunately, it received some flak for offering that feature for Paris but not for Beirut, where a double suicide bombing killed dozens of people.
The company quickly mobilized to turn on the feature more broadly.
“People are also asking why we turned on Safety Check in Paris and not in other parts of the world, where violence is more common and terrible things happen with distressing frequency,” admitted Alex Schultz, vice president of growth at Facebook. “We will learn a lot from feedback on this launch, and we’ll also continue to explore how we can help people show support for the things they care about through their Facebook profiles, which we did in the case for Paris, too.” Company CEO Mark Zuckerberg also thanked users who provided feedback, promising to “work hard to help people suffering in as many of these situations as we can.”
Customer-centric innovation requires a continuous, sustained and focused effort from the company to achieve positive results. What is most important, though, is that a company should be willing to break through existing traditional company mindsets, that usually work for profit instead of customer satisfaction. Companies that do make the effort though, are rewarded with sustained profits and some major growth.