So what’s next? Before our newest product launch or branding campaign is cold, the pressure for the next success is on. And to add to the pressure constantly new terms, options and concepts are thrust before us as the keys to our survival and relevance. Should we have more events on hot topics? Use more social media? Revamp membership models? Focus on international markets?
All too often the next step involves linear thinking– “innovate” through addition of new programs, technologies, marketing campaigns etc.—and does not bring about dramatically different results.
In reality, no amount of labor by hard-working staff and board committees will yield magical answers out of thin air. The right value proposition for a next step is determined by how members/customers define and experience value, rather than the organization’s opinion of it. It cannot be “invented” internally. It must be ferreted out through continuous conversations and a deeper level of intimacy with customers/members. The good news is that you don’t have to figure it all out by yourself. And more good news: viewing your assets through the eyes of customers will uncover new value that was not apparent before.
The bad news? Most everybody in my research and consulting believes that they are already there: they are member centric and carefully listening to their members. This is a huge obstacle to the kind of substantial shifts that can make a difference to results. Ranjay Gulati, the Jaime and Josefina Chua Tiampo Professor of Business Administration at Harvard Business School, makes the same observation in business: “It would be hard to find a CEO who would tell you that his or her firm isn’t customer-centric already. And that’s exactly where mass delusion begins for most companies.”
In his book, Reorganize for Resilience: Putting Customers at the Center of Your Business (Harvard Business Press, 2009), Gulati demonstrates through research that customer centric companies were those resilient enough to survive recessions and become today’s market leaders. He defines customer centricity in terms of action and ways of thinking rather than statements of mission, value or objectives.
It “means looking at an enterprise from the outside-in rather than the inside-out — that is, through the lens of the customer rather than the producer. It’s about understanding what problems customers face in their lives and then providing mutually advantageous solutions.”
Understanding customers’ problems is the difference maker in deepening your conversation with members and shifting member relationships and innovation processes to an entirely new level. Looking at assets and options from this perspective opens to door to innovations beyond single products.
The usual surveys and other conventional research tools tell us about members’/customers’ transaction behavior: how many events they participate in; which of the products they purchased they prefer, etc. They enable the production of isolated programs and benefits with no substantial relationships to each other. The customer-centric conversations delve into the whole person: what makes them “tick;” what motivates them and keeps them up at night. They, therefore, broaden the base of innovation beyond individual programs, to include strategic solutions that have higher value for customers and can command higher fees. Aiming to solve customer problems allows us to see how various assets connect to each other and can add up into solutions for various member/customer segments. Instead of innovating by adding more of the same, re-imagining, re-configuring, bundling and leveraging in new ways what you already have become enormous sources of new value and renewal.
Take the example of Best Buy that Gulati analyzes. He believes that Best Buy’s customer-centric approach to business is “a key reason why the company has survived in the tumultuous consumer-electronics marketplace, while Circuit City is gone.” And this is one of the sequences of decisions and actions that were catalyzed by looking at their products from the customer’s perspective:
- “Best Buy took the time to understand who its customers are and what they need and then started selling solutions instead of products.” For example, they realized that most of their customers were women and that, unlike men, women, wanted integrated solutions and support beyond the purchase of a single product: “Women want not just a digital camera, but a printer, cable, and other accessories–and they care far more about these things than price. Equally important, they want help with installation, while most men prefer to try to put things together themselves.”
- Understanding the issues and thinking underlying a purchase led Best Buy, through a common sense, organic path, to a shift from selling products to crafting solutions. For example: “Related products were bundled together. In many stores, kids now have special play areas while their moms browse. To help with installation, the company acquired Geek Squad. Buy a flat screen TV and they’ll have it running before your favorite show airs.”
The process of changing your conversation with members; uncovering and solving critical professional problems can be applied to associations and transform their basis for innovation, relevance and competitive advantage.
The Veterinary Information Network (VIN), an enormously successful and fast growing association, committed itself to solving the problems that stood in the way of success for independent veterinarians: isolation from peers; financial and logistical hardships in keeping up with new research and CE requirements; quick access to specialists in the course of treating patients etc. Instead of the usual lists of individual “benefits,” VIN integrated diverse elements into a strategic solution: it created virtually the largest veterinary practice in the world, conceptualized and organized from the perspective of a small to medium veterinary practitioner. It featured a menu of content resources, peer communities, access to specialists, CE courses and training paths for veterinary practices staff, etc. which, in their totality, represented strategic solutions to all critical problems facing members. Membership means access to the community and choices among various paths of participation, resources and types of solutions depending on your needs on any given day.
Almost all the successful and growing service providers I know have shifted from products to solutions.
The kind of innovation that will bring about dramatically different results is neither internally generated nor linear. Instead it involves the ability to constantly re-conceptualize one’s assets and nature of business from the customer’s perspective. Bundling, reconfiguring, re-inventing from the core and leveraging individual pieces into integrated solutions are today’s sources for strategic innovation and competitive advantage.