The Engagement Factor: Four Ways
to Use Your Customers to Boost Innovation (and Profits!) at Your Company
By Dan Adams
If your company is suffering from yet another failed product or if you're
simply looking for a way to boost your company's sales, Dan Adams has some
advice for you: Ask your customers what they really want and watch your
The best technology. The best employees. The biggest budget. The strongest
R&D department. Check, check, check, and check! If you think these are all
the elements you need in order to build a consistently successful company,
you're wrong. Dan Adams says there is one other factor you'll need to check
off that list - an innovation strategy that works.
"The best way to ensure your company will be a success is to deliver more
than your share of customer value," says Adams. "Specifically,
you need to develop differentiated products that provide benefits your
customers crave. Products they can't get anywhere else at a comparable cost.
But you shouldn't be guessing what they want. You should base your product
innovation on what they say they want."
Adams notes that back in 2007, Booz Allen Hamilton released an important
study on innovation called "The Customer Connection: The Global Innovation
1000." The company studied 84 percent of the planet's corporate R&D spending
and identified several distinct innovation strategies.
Most importantly, says Adams, the study highlighted one essential element of
successful innovation that too many companies forget. Your employees aren't
the only people you should be engaging to create truly unique and profitable
products. You should actually be focusing your efforts on engaging your
The Booz Allen Hamilton study found that when it comes to innovation,
customer engagement has a huge payoff. It noted, "Companies that directly
engaged their customers had superior results regardless of innovation
"And not just a little bit superior, a lot superior," says Adams. "Those
companies that used direct customer engagement while innovating versus
indirect customer insight enjoyed great financial gains."
In fact, the study found that the companies that based their innovation
strategies on customer feedback experienced gains in the following key
1) Profit Growth: Operating income growth rate that was three times
2) Shareholder Return: Total shareholder return that was 65 percent
3) Return on Assets: Return on assets that was two times higher.
"What should you do with this information?" asks Adams. "For starters, if
you're in a conversation about your company's innovation and nobody's
talking about the customer, realize something might be very wrong. To put it
in terms of the study, your company might be practicing ‘indirect customer
insight' instead of ‘direct customer engagement.' This is a kind way of
saying, ‘We've lost track of who our innovation is supposed to help.'"
If you think your company needs some innovation help, read on for a few
words of advice from Adams.
Take it to the next level. For more than five years, Adams has been
helping B2B suppliers engage their customers in the innovation process. In
that time, he has almost seen it all! And he's used what he's seen to
distinguish six levels of customer engagement during product development.
What's your level?
Level 1: Our Conference Room: At the lowest level, you decide what customers
want around your conference room table. Internal opinions determine the
design of your next new product.
Level 2: Ask Our Experts: At the next level, you poll your sales force, tech
service department, and other internal experts to determine customer needs.
Better—because more voices are heard—but still too "internal."
Level 3: Customer Survey: Here you use surveys and polls to ask customers
what they want. This begins to shake out internal biases…but doesn't deliver
much in the way of deep insight.
Level 4: Qualitative VOC Interviews: You send out interview teams that meet
with customers to learn what they want. This is a quantum leap from VOO
(voice of ourselves) to VOC (voice of the customer).
Level 5: Quantitative VOC Interviews: The problem with just qualitative VOC
is that people hear what they want to hear. Quantitative feedback drives out
assumptions, bias, and wishful thinking.
Level 6: B2B VOC Interviews: Unlike end-consumers, B2B customers are
knowledgeable, rational, and interested. B2B-optimized interview methodology
fully engages them to take advantage of this.
"If you aren't happy with your level, don't worry," says Adams. "Through
solid training and committed leadership, I've seen businesses leap from
Level 1 to 6 in the space of a year."
Remember who's showing you the money. A successful company innovates
for its customers, not itself. "That's because nobody inside your company
can pay for innovation," notes Adams. "Only your customers can do that. So
the more closely you engage those who pay…the more you learn what they'll
Make sure you're asking the right questions. Too often, innovation is
misunderstood as the process of coming up with the right answers. "The
reality is that it is actually about asking the right questions," explains
Adams. "If the bright people in your company are focused on real customer
needs, they'll run circles around the bright people at competitors who are
Learn to pre-sell. "I believe the Booz Allen Hamilton conclusions are
especially potent for the B2B supplier serving a concentrated market," says
Adams. "If you interview the ten largest prospects in your target market
correctly, you'll engage them so they'll be primed to buy when you launch
that new product."
"So the bottom line is if you want to boost your innovation, you should
start by directly engaging your customers," says Adams. "And do this in a
way that allows you to understand their world, focus on their important,
unsatisfied needs, and entice them to keep working with you.
"This innovation strategy is great because you are removing the guessing
game aspect of new product development," he concludes. "You won't have to
worry about whether or not your customers will like your new products
because you'll already know you are delivering exactly what they want."
About the Author:
Dan Adams, president of Advanced Industrial Marketing, Inc., is author of
New Product Blueprinting: The Handbook for B2B Organic Growth,
is passionate about B2B new product development. In over 30 years of working
within and with major B2B corporations, he has explored every aspect of
product development, building New Product Blueprinting from the ground up.
He is a chemical engineer and holder of many patents and innovation awards,
including a listing in the National Inventors Hall of Fame. Adams was head
of strategic planning for a billion-dollar company and has extensive
experience in Fortune 500 marketing, business development, and leadership
positions. He is an award-winning speaker and conducts workshops in every
region of the world. Advanced Industrial Marketing, Inc. (AIM), was built on
the belief that understanding your customers' deepest needs is a competitive
advantage you should learn - not outsource. AIM conducts workshops globally to
train commercial and technical teams in advanced B2B product development,
provides strong post-workshop coaching support…and then gets out of the way.