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Four Innovation Insights Customers Provide


Customers, properly, have been having a renaissance of sorts in terms of business thinking. Peter Drucker famously espoused a very customer-centric business philosophy. Nowadays, social CRM represents the return of a customer-first orientation. Last year, Altimeter published the 18 use cases of social CRM. Included in those use cases were several that relate to innovation.

Customers are a rich source of innovation insight, and the ultimate authority on what innovation is useful. So it’d be good to understand what types of insights they provide. OK, not just good. Vital. While the incorporation of customers in the innovation process is…honestly….still nascent, it will ultimately be the primary basis of innovation insight. It just will take some time.

It turns out, there is a structure to customer insight. Customers’ innovation insight takes several different forms:

Spectrum of Customer Insight 1
Based on research, the four types of insight are different, and vary in the ease of eliciting and what they address. Let’s take a look.

All Customers – Jobs to Be Done

“Jobs to Be Done”. What is that? It’s why someone purchases a product. A classic formulation of this is by Theodore Levitt: “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.” That starts to hit on the notion of the job. But it’s more than the direct outcome one is looking for from a product. As the diagram to the right shows, it also includes the consumption context and the emotional effect. Context paints the broader picture of the job to be done. Emotional effect broadens the discussion to include the experience of using the product.

Clayton Christensen provides a wonderful example of this, talking about the job that customers were hiring…a milkshake…for. Yes, a milkshake. There was a lot more behind that purchase than its direct usage as a cold, sweet drink. 40% of shakes were being bought in the early morning. The consumption context was people commuting in the morning, drinking a shake in lieu of breakfast. The shake’s emotional effect was stave off boredom and satisfy a general hunger at the start of the day.

Of all the innovation insights available, the jobs-to-be-done is the most plentiful. The challenge with this feedback is that it’s buried inside people’s heads, and it must be elicited from them. Practitioners such as ReWired Group and Strategyn get at the jobs to be done through deep dive interviews with customers.

Emergent Customers

Say you had a product concept, and you wanted to get a read on its applicability to people’s jobs-to-be-done. More broadly, you’d love to know what works, what doesn’t and what else is needed to make a splash in the general market. Will any old customers do? Turns out…no. What you’re looking for are emergent customers.

In research done by professors at UC-Riverside and Dartmouth Tuck School of Business (pdf link), customers exhibiting a specific set of characteristics were much better at identifying and improving concepts that are more attractive to the market. Called emergent customers, these people possess “the unique capability to imagine or envision how concepts might be further developed so that they will be successful in the mainstream marketplace.”

Sounds pretty valuable, no?

What are these traits that define a customer’s emergent nature?

The researchers created two separate field tests of example products – home delivery and oral care – to validate their hypotheses about emergent customers vs. other types. Their tests confirmed the ability of these customers to better refine a concept for mainstream acceptance than other types of customers.

Lead Users

Lead users are those customers who alter a company’s product to fit an emerging job they need fulfilled. MIT professor and economist Eric von Hippel popularized the existence of these users in his book Democratizing Innovation. Why are they so important? Because they experience new needs for products before the general market does. Find these users, and you gain an early read on what will be important more broadly in the months and years ahead.

Lead users not only experience these emerging market trends earlier, they are motivated to take action on them. The needs they experience and the product adaptations they make are quite valuable.

In one example cited by von Hippel, lead user surgeons were identified. These surgeons had modified equipment and materials to suit the needs they had, when the standard products sold wouldn’t suffice. Nearly half of these innovations were eventually marketed by the big manufacturing firms. In another example, 3M ran a test of concepts developed by its lead users vs. ideas derived from other methods. Thew lead users’ ideas were “significantly more novel than those generated by non-lead user methods. They were also found to address more original or newer customer needs, to have significantly higher market share, to have greater potential to develop into an entire product line, and to be more strategically important.”

Find these users, and learn where your market’s going.

Creative Customers

Creative customers are the uninvited dinner guests in the path toward mainstream innovation. While the jobs to be done, emergent customers and lead users provide incredibly valuable insight to make stronger, more successful innovations, creative customers…um…don’t really? The phenomenon of creative customers was researched by academics Pierre R. Berthon, Leyland F. Pitt, Ian McCarthy and Steven M. Kates in their paper, When customers get clever: Managerial approaches to dealing with creative consumers.

The researchers define creative customers simply as “customers who adapt, modify or transform a proprietary offering”. That actually sounds a lot like the customer type just described, lead users. But the researchers differentiate here by whether the innovations reflect emerging needs of the general market, and by whether creative customers are satisfying a core need or not. I’d add that creative customers are those whose innovations are pretty far afield from the mainstream path of expected product usage. And it’s not clear how companies should handle them:

Creative customers are different

Examples of creative customer innovations include the guy who used FedEx boxes to create furniture. Admittedly, not what those boxes were made for. Or the car fueled by Mentos candy and Diet Coke. They’re creative, but certainly not of the lead user class of innovations. Yet, each in their own way, point to impressions people have about the products (the incredible stiffness of FedEx boxes makes them a furniture material, the fizz of Diet Coke and Mentos is a fuel source).

Companies gain diverse thinking about their products, but such innovations do pose challenges around intellectual property, branding and liability. The researchers categorize the possible firm responses to such innovations in a 2×2 grid (shown above), based on attitudes and actions toward creative customers. But here’s the thing: creative customers aren’t going away, and their legions will increase over time. They make interesting dinner companions at the innovation banquet.

The four innovation insights described here form a broad and powerful set on inputs from customers. While the broad involvement of customers in innovation is still limited and nascent, these different types of insight provide a path for future activity by firms.

I’m @bhc3 on Twitter, and I’m a Senior Consultant with HYPE Innovation.

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About Hutch Carpenter
Senior Consultant for HYPE Innovation (hypeinnovation.com)

20 Responses to Four Innovation Insights Customers Provide

  1. Pingback: Four Innovation Insights Customers Provide | Serve4Impact

  2. Jim Ewel says:

    Fascinating post, Hutch. Any thoughts on how to locate specific individuals in each of your customer types?

    • Thanks Jim. As for locating specific individuals, no good way yet, but I believe social media is a great enabler for such work.

  3. Thanks, nice post – connected a few dots for me, exactly what I needed this morning. Thanks again.

  4. Thanks Hutch, enjoyed the more nuanced discussion of different kinds of customers playing different roles in the innovation process using multiple influences/frameworks.

    • You got it Niklas – like old times, no?

  5. Anonymous says:

    Very impressive reading….proactive.

  6. Anonymous says:

    Interesting insights

  7. Anonymous says:

    Innovative article-thanks!

  8. Giles Farrow says:

    This is great

    Customers are the product experts. Studying how customers really use your products is very revealing

    1) Joel Spolsky talks about how Excel was developed for complex financial modelling but most people used it as an easy way to store data in a table. This should have a profound impact on your marketing

    2) the creativity of customers using your products in new ways is fantastic. Force humans to work within some constraints and they will find a way. I have seen software “tortured” to do all sorts of tasks it was not designed for because a corporate employee could not go out and buy new software – they had to use what was already there

    Great post – thanks

  9. Pingback: Software Marketing Tweetables - 16 January 2012 | Smart Software Marketing

  10. Andrew Hunter says:

    A useful model for innovation that reflects how customers contribute in different ways. I think it is also interesting to think about the difference between innovation…new uses out of existing ideas and invention ….new to world ideas. Invention has the capacity to transform a market and create a whole new set of customers as Apple has amply demonstarted.

  11. It’s important to make sure you get strangers for customer feedback. Customers that are friends and family can give biased feedback which can really destroy.

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