Innovation Leadership Training
Day 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
Products/Services
Existing
New
Existing
Customers
Prospects
Methods, tools and techniques change
Frequency drops
Value 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
Comparison
Approach
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