De-Risking Innovation: Understanding Customer Unmet Needs
De-Risking Innovation: Understanding Customer Unmet Needs
By Kelly Lawrence, Founder & CEO, Lawrence Innovation
Innovation has a reputation for being risky. In fact, the Ansoff Matrix provides levels of risk based on our familiarity with the market and our familiarity with the technology. It shows risk increases with unfamiliarity. The fear of failure and pressure to deliver on short term financial goals sometimes encourages executives to limit investments to what they deem to be safe bets - familiar technologies and markets.
The Ansoff Matrix provides levels of risk based on our familiarity with the market and our familiarity with the technology. It shows risk increases with unfamiliarity.
Changing Customer Needs
The problem with this short term thinking is that eventually, customer needs change over time. If we do not address these changing needs, we lose our edge and our growth. A famous example of this is Kodak’s failure to seek opportunities in digital photography.
Changing customer needs over time is reflected in the technology adoption life cycle shown below. At any given time, approximately 15% of customers are looking for new solutions. As these customers adopt a new solution, they become advocates for the new solution and further adoption occurs moving new products and services into the mainstream market. Over time, what was once a “wow” or premium feature now becomes a minimum requirement and there is an opportunity for innovators to launch new solutions with new premium features that customers will pay more for. Consider a car. At one point, a back-up camera was a premium safety feature. Today, it is expected every new car will come with a back-up camera. Today, we consider features such as electric vehicles or autonomous driving as innovative, premium features. At some point in time, these features too will move along the technology life cycle and either go into the chasm or cross it to become standard features of tomorrow’s car.
Source: https://www.business-to-you.com/crossing-the-chasm-technology-adoption-life-cycle/
Understanding Customer Needs
Understanding customer unmet needs does not need to be a lengthy or expensive process. Discovery is a front-end-of-innovation learning process to identify customer unmet needs, satisfaction gaps and your potential value proposition. Effective communication of value proposition is critical for innovations to move from visionary adoption to main stream adoption on the product technology adoption curve.
The AIM Institute teaches teams how to discover customer unmet needs through their New Product Blueprinting(R) process. Typical projects can be completed in 1-2 business quarters. Virtual tools such as Microsoft Teams and Zoom make Virtual Voice of Customer possible.
The AIM Institute recognizes face-to-face customer interviews are best, but acknowledges virtual voice of customer has advantages particularly in current times where travel can be difficult.
Advantages of Virtual Voice of Customer include:
lower cost
reaching dispersed customers
viewable probing tips
colleague training
probing suggestions
note-taker assistance
rapid debriefing
easier scheduling
low-impact cancellations
greater project speed.
Innovation Accelerates Results.
Innovation accelerates results. Gina O'Connor, professor of Innovation Management at Babson College recently published an article in Fast Company stating: "Doubling down on innovation in the midst of a crisis can have even greater benefits. Companies that prioritized breakthrough innovation at the onset of the 2008 financial crisis outperformed their peers in terms of market value by 10% during the recession. Five years later, those same companies were outperforming competitors by 30%."
Understanding Customer Unmet Needs De-Risks Innovation.
Ready to de-risk your innovation and better understand customer unmet needs? Contact us for a complimentary consultation to get started.