AIM Archives - Tag: customer needs

What’s the #1 mistake B2B companies make when developing new products?

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I think the biggest mistake is failing to use quantitative customer interviews. Why use quantitative questions for interviews, not just qualitative? Two reasons. First, qualitative interviews give you reams of customer quotes with no good way to prioritize customer needs. Sure, you could count the number of times customers cite a need, but frequency of remarks is a poor substitute for customer eagerness to improve.

More important, with only qualitative interviews you’ll succumb to confirmation bias… the tendency to hear and interpret information according to your preconceived notions. With quantitative questions for interviews, you’ll have hard data on customer needs that your team hasn’t filtered or skewed. You get 100% unadulterated insight straight from the customer.

More in 2-minute video, Quantitative interviews are a must

Is there an innovation metric to improve customer insight?

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Yes, it’s called the Commercial Confidence Index (CCI), and it’s easy to calculate: Step 1: Record your annual R&D spending for each significant product development project. Step 2: For each project, ask if you have quantified evidence of customer needs, e.g. Market Satisfaction Gaps. If “yes,” the project goes in the “Known Need” bucket. All others go in the “Assumed Need” bucket. Step 3: The CCI is your annual R&D spending on Known-Need projects divided by annual spending on all product development projects.

More in 2-minute video, Employ new growth metrics

What single practice can propel your NPD success the most?

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For B2B companies I believe this practice is requiring quantitative, unbiased, unfiltered evidence of customer needs before starting to develop a new product. Today, wishful thinking and confirmation bias greatly distort suppliers’ views of what customers want in a new product. One way to change this? Require Market Satisfaction Gaps for all significant product development. These reveal which outcomes the market is most eager to see improved. Check out over a dozen real-life cases of their use at www.aimcasestories.com.

More in white paper, Market Satisfaction Gaps

Are you taking advantage of the Customer Insight Gap?

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The Customer Insight Gap is the difference between what suppliers typically understand about customer needs… and what they could potentially understand. This Gap is usually small for consumer-goods suppliers (B2C): Typical insight is high since their employees are consumers themselves and understand customer needs. At the same time, potential insight is low, because end-consumers often struggle to articulate their true needs.

The Gap is huge for most B2B suppliers: They know less about their customers’ world, but these customers could tell them much, given their Knowledge, Interest, Objectivity & Foresight (KIOF in chart). For more, watch this 2-minute video, Understand your B2B advantages. If you learn how to close the large B2B Insight Gap, you’ll get an amazing competitive advantage.

See white paper, B2B vs. B2C.

How much does VOC (voice-of-customer) training impact your understanding of market needs?

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We studied this question in our research on B2B VOC skills, which included a survey of 300+ B2B professionals. We grouped respondents into 4 groups depending on their type of training (New Product Blueprinting or Other) and level of training (Extensive or Some).

Respondents also reported their typical new product success rates: Only 20% of those with “Some” training in “Other” methods had new product success rates over 50% (green in chart). But 80% of those with “Extensive” New Product Blueprinting training were “in the green.” Just think: Instead of one-in-five employees having successful new product track records, you could move to four-in-five with such training.

More in research report, B2B VOC Skills: Research linking 12 VOC skills to new product success

What’s the fastest way to boost your new product success rate?

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This was a question we studied in our research on B2B VOC skills, which included a survey of 300+ B2B professionals. Some respondents reported a “poor” understanding of market needs while other reported a “good” understanding.

We were surprised at the difference in the two groups’ typical new product success rates: Only 5% of the former group (with poor market understanding) reported their new products were successful over half the time. But 70% of the “good market understanders” reported better than average new product success rates. So instead of hiring more R&D, your shortest path to successful new products might be to understand market needs better.

More in research report, B2B VOC Skills: Research linking 12 VOC skills to new product success

It’s wise to clearly separate your R&D into 3 buckets.

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Bucket #1 is Technology Development… science-facing innovation that turns money into knowledge. Bucket #2 is Product Development… market-facing innovation that turns knowledge back into money. Bucket #3 is Process Development… optimizing the production of existing products to make money more efficiently. Don’t focus on customer needs for Bucket #1 (it’s too early) or #3 (it’s too late)… but do this very well for Bucket #2. In the entire money-making process, this is your greatest point of leverage today.

More in article, Target Customer Needs and Win

How long have we failed to understand customer needs in new product innovation?

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The best research says we’ve struggled for about five decades now. In 1971, the leading cause of new-product failure was “inadequate market analysis” (45%, with the next cause at 29%). In 2019, the leading cause was “No market need” (42%, with the next cause at 29%). After five decades, maybe it’s time to get serious about understanding customer needs before developing new products? Not that we need to rush into this, of course.

More in article, Target Customer Needs and Win

Do you have a weak link in your 3-link chain to organic growth?

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Reliable growth boils down to three linked principles. 1) Your company’s only path to profitable, sustainable organic growth is to create customer value. 2) You only create customer value when you satisfy customer needs that were important and unmet. 3) You must first understand customer needs. You cannot efficiently, effectively improve that which you do not fully comprehend. So it’s time to stop thinking about voice-of-customer as just “one more initiative.” It’s much more. It’s the first link in the growth you want.

More in article, Predict the customer’s experience with modeling.

Customer Needs: from ‘guessing’ to ‘understanding’ to ‘modeling.’

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Qualitative customer interviews let you move from ‘guessing’ to ‘understanding’ customer needs. But proper quantitative interviews provide the insight you need to ‘model’ customer needs. This means you can design your new product with confidence… know how to make intelligent tradeoffs… and even understand how customers will react to your product without seeing a prototype. This works only for B2B and will someday be a common practice. But it’s uncommon today… and a profound competitive advantage.

See how in the article, B2B Customer Needs: Predict the customer’s experience with modeling.

Always separate customer “needs” into two buckets.

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As explained by Tony Ulwick in What Customers Want, the term customer “needs” can be confusing. It’s best to separate what customers want into outcomes (their desired end-result, or the “what”) and solutions (your answer to their need, or the “how”). Keep your interview focused on their outcomes, not solutions. If they offer a solution, simply ask, “What would that do for you?” Poof: You’re back into outcome space where you want to be.

More in article, Discovery Interview Blunders that Frustrate Your Customers.

Are you working on a system with diminishing returns or increasing returns?

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Keep working harder and smarter, but recognize you’ll move the needle less and less in a system of diminishing returns… like wringing out the last bit of productivity or quality. But when you focus on understanding customer needs better than competitors, your insights and new product innovations—and resulting revenue—will keep coming. Increasing returns. A wonderful system to work hard and smart at.

More in white paper, Catch the Innovation Wave.

Evidence-based innovation leads to innovation speed.

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If your NPD teams are confident of customer needs, your projects will go faster for 3 reasons: 1) Bad ideas are killed quickly, freeing up resources. 2) Dead-end detours and diversions are avoided. 3) Hesitation—with second-guessing, delays and debates—is squelched. As Netscape founder, Jim Barksdale, said “If we have data, let’s use it. If we have opinions, let’s use mine.” B2B innovators can find the data they need in Market Satisfaction Gaps.

More in white paper, Market Satisfaction Gaps