The global consumer market is undergoing a never-before-seen structural change as the result of an overall slowdown in the economy, the constant change of online ecosystems and the new consumption patterns of the millennial generation. Therefore, enterprises that need to sustain their leading market position and enhance their competitive advantage should consider customer-centered innovation as a critical and urgent strategic plan.
To create business results through customer-centered innovation (CCI), all enterprises should fully address the following five mission-critical questions.
Question 1: What is customer-centered innovation?
Customer-centered innovation is a corporate-level innovation system that differs from innovations in management structures, production processes, product development and application technology. It is based on market demand and customer values, and relies on different creative methods or disruptive ideas to enhance customers’ experience with products and services.
Question 2: What is innovated?
The scope of CCI extends far beyond products and product-driven customer satisfaction is unable to reflect the overall experience, and is more likely to ignore micro interactions that often cause customers to feel disturbed, unhappy and inconvenienced. These negative experiences make customers unwilling to repurchase. According to the global trend, “emotional connection” will replace ”satisfaction” for assessing the results of experience.
In recent years, certain articles published in Harvard Business Review, such as “An Emotional Connection Matters More than Customer Satisfaction” and “The New Science of Customer Emotions,” have confirmed that customers value a high degree of “emotional connection” 100% more than they do a high degree of “satisfaction.”
Furthermore, companies have increased their percentage of emotionally connected customers from 21% to 26%, resulting in a 15% increase in the number of active customers and a more than 50% increase in the rate of same-store sales growth.
Question 3: How to innovate?
To help companies implement customer-centric innovation step by step, we divide the whole process into six core stages, including Discover, Diagnose, Design, Determine, Develop, Deploy, that comprise what we call the 6D model.
Based on the 6D model, our process from “customer emotion assessment” to “completion of model/demonstration” takes only six to eight weeks. It can help corporations respond quickly to their competitors, win back lost customers and recover their backward sales targets.
Question 4: Who innovates?
Change agents are the people who drive strategic projects, ensure value-added effort, think systemically, and form alliances to minimize resistance. They get results by creating appropriate alignment, integration, and a high accountability project team.
Having the right people in the right positions will automatically dissipate many of the management problems that plague companies and sap valuable resources. Jim Collins argues that firms seeking to make the Good to Great transformation should expend extra time and energy on personnel searches and decisions.
Question 5: Where do we innovate?
Customer-centered innovation can be induced at the following three levels in any enterprise business system:
Customer journey level: increase sales amounts by strengthening the emotional purchase intentions
Customer management level: enhance the customer retention rate by enhancing the emotional connections between customers and corporations
Market management level: enlarge the market size through uncovering the hidden demands of customer segments