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How Successful Companies Engage Customers During the New-Product Development Process

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The marketer's perspective on the customer has changed significantly over the last decade. Brands used to gaze from above on a faceless sea of prospects; now, brands come face-to-face with customers daily in social and digital channels. Accordingly, we no longer talk at customers; we talk with them.

This new normal is changing not just how companies market but also how they bring new products to market.

At CMG Partners, for our latest CMO's Agenda research [email required], we talked with marketing and product leaders to find out how they use customer dialog to shape their process for new product development.

For the professionals we spoke with, it wasn't a question of whether they encourage customer input but, rather, how they choose to engage customers.

At a high level, there are two basic strategies for customer engagement:

  1. Crowdsourcing, large forums, and customer data capture
  2. Targeted, ongoing customer advisory groups

Intelligence Gathering on a Large Scale

Casting the widest net works well for consumer goods with millions of users to please. There is knowledge in numbers, and the collective intelligence of the crowd can support or even inspire innovation. The crowds rushing to fund Pebble on Kickstarter in February 2015 are modern examples of a direct and meaningful customer impact on a product's release.

1. Crowdsourcing

Crowdsourcing can be spontaneous or deliberate. With crowdsourcing, companies take advantage of broad interaction with the public, usually over social and digital media.

Lego and Dell are renowned for their specialized websites that elicit votes and comments en masse for product usage and new-product ideas.

Crowdsourcing can be viewed as a sort of beta-testing, where companies take measure of the customer and market to shape their product and its launch.

2. Social Listening

Social listening can be an efficient tool for capturing real-time feedback for a new product or service.

Patrick Vernon of University of North Carolina's Kenan-Flagler Business School described a particularly agile version to his class: "A visiting CEO once outlined their approach to social listening. After launching a release at 1AM, they would watch Twitter, and people would either complain about it or love it, and based on that input the company would iterate. By the time the rest of the world woke up, this company would already have something like the fifth iteration of their product."

Social listening can provide key customer insights to refine a product. In this example, the company minimized the risk of failure by limiting the breadth of product exposure.

3. Customer Interaction Data

Chris Jo, general manager and head of global services for Samsung, told us his team employs data and interactions with customers in multiple ways.

"We have a unique channel, the Samsung app store, where people can comment on our product and we can actually engage with them through comments," Jo said. "It's not just one-way; we strive for two-way communication so we make sure that we really understand what our customers want." Samsung's example shows how companies are increasingly turning bytes into insights to realize the promise of Big Data.

A Narrower, Targeted Approach

For other businesses—B2B in particular—a narrower approach may be more appropriate. By talking with a select number of customers or targets, companies gather insightful and detailed input from a critical customer or user segment.

The challenge with this approach is to ensure that marketers don't focus only on high-performance users; after all, people having trouble with a company's product will also shed light on areas for improvement.

The following three tactics are often employed by B2B businesses to ensure they are on the right track with product design.

1. Product Advisory Councils

Product councils can be an effective method of tapping into a firm's power users and most engaged customers for new-product insights.

Ravi Shankar, vice-president of product marketing for Informatica, described the company's approach: "Last year, we ran about five different product advisory councils. These are key customers who are leveraging our product in a very successful manner."

This practice helps maintain Informatica's place as a top data management provider consistently ranked in Gartner's Magic Quadrant.

2. Key Opinion Leaders

Key opinion leaders can be customer experts, industry gurus, or writers and media personalities. Most often, their independence is key to their level of influence, so their endorsement must be earned.

K2M is a manufacturer of highly specialized spinal correction devices, and the company works with a set of select surgeons it calls "key opinion leaders." K2M works closely with those customers to gather practical and conceptual feedback—on ideas, concepts, designs, and prototypes.

As a result, K2M said, it develops not only better products but also influential advocates when the company brings a new product to market.

3. Customer Forums

Thomson Reuters Tax & Accounting has recently gone through a transformation. The main change was to collaborate more closely across functions, but the company is also actively capturing early customer and industry feedback.

Its customer forums are "a hybrid of a controlled release and a show and tell. We hosted a series of customer forums to gauge reaction and interest but also to validate whether we were directionally correct with our approach," CMO Tobias Lee explained.

That customer focus led Thomson Reuters to design products that meet customer needs that surfaced in the forums.

In our interviews and research, we found it striking (and pleasantly surprising) how open these marketers are with their customer focus groups. The positive outcomes prove the worth of direct customer input.

* * *

Cast a wide or narrow net—depending on the company's product and sales cycles—and make sure you follow through on every solicited customer's input.

In the end, the CMO's Agenda research found that by fostering a continual conversation with the customer, marketers will more effectively meet customer expectations, gain competitive advantage, and strengthen key relationships.

For more details, read the full CMO's Agenda report [email required] by CMG Partners.


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Mark Chinn is partner and CMO's Agenda research lead with CMG Partners, a consultancy helping businesses grow through marketing strategy.

LinkedIn: Mark Chinn

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  • by Vinay Bhagat, CEO TrustRadius Mon Jul 27, 2015 via web

    Mark - we're also starting to see B2B software companies that have built at-scale user review programs harness insights generated from those reviews to guide product priorities. They are also a way to communicate plans, where customers have voiced requests too.

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