Real Secret to Product Innovation? Customer Obsession

by Alex Chriss

5 min read

American entrepreneurship is booming.

An unprecedented 55 million Americans count themselves among the self-employed, and Generation Y, a fully “digital generation,” is poised to become “the most entrepreneurial generation ever.”

With more small business comes more competition, and both solopreneurs and startup founders will face increasing pressure in the marketplace to push the “next big idea.” A great idea is a good start, but it’s only that. Turning that great idea into a successful business for the long-term requires entrepreneurs to shift their focus from the merits of their ideas to the evidence they get from customer behavior.

“The Customer is King”

While the phrase might be a cliché, in reality it holds great wisdom for those creating products and services. Far too often, entrepreneurs get swept up in their own ideas and forget to keep their eye on what really matters: the customer.

Consider some of the biggest product flops in recent memory. They all had one thing in common: the customers’ needs or preferences were all but forgotten. Take, for example, Google Glass. In its quest to revolutionize the way we use computers, Google developed the product in a top-secret lab, shielded not only from potential customers, but also most Google employees. While Google Glass was admittedly an idea ahead of its time, the customers still haven’t come around. Ultimately, it doesn’t matter if you’re a new business or an established player – if the product doesn’t meet specific customer needs, it simply won’t succeed.

Three Important Lessons in Customer Engagement  

The incredible value of customer feedback in the product development process should be no surprise to anyone. Listening to customers (and reacting to their feedback in the form of product improvement) helps guarantee that the product you’re developing actually fulfills a real customer need, and is not just something that sounds cool in theory. It also gives you an edge over your competition and aids in customer satisfaction and retention, all of which add up to increased sales. But, obtaining valuable customer feedback isn’t just about sitting back and listening to customer complaints; it’s also about becoming actively engaged with the customer, and finding ways to challenge your own assumptions based on the real-world input of customers. Here are some important lessons on customer feedback and engagement, based on my own experiences:

  • Customers don’t always tell you what they want in words. Don’t just stop at what customers tell you in words. Often, some of the most surprising insights can come from observing their behavior. Two years ago, my team at Intuit® noticed that 15 percent of Mint users were hacking the personal finance product to categorize and track business expenses by creating an “Other” category – a feature that hadn’t been designed into the product. After talking with customers, we realized that we lacked a finance management product tailored to the needs of solopreneurs (i.e. freelancers, contractors and businesses of one). Mint wasn’t doing the job for them, and QuickBooks® accounting software was overkill. In response, we built an entirely new product, QuickBooks Self-Employed, catering to this segment of individuals with unique financial needs compared to those of full-fledged small businesses.
  • Customers can help you fix “impossible” problems. In many cases, the solution to a difficult problem can be found in customer data. Shortly after launching QuickBooks Self-Employed, customers complained that bank transactions in the product were limited to 90 days of history (a bank requirement) and they needed 12 months of data for tax purposes. Knowing that we needed more data to make this feature happen, we asked customers in the short-term to manually download the data from the bank, and upload it to QuickBooks Self-Employed. Once we had a sufficient number of these files, we could analyze them, learn the myriad formats, figure out how to grab the data ourselves and turn that intelligence into a feature. Developing the feature took just two weeks, but it wouldn’t have been possible if we hadn’t obtained this essential customer data from our first scrappy iteration.
  • What customers don’t do can be equally important. Taking notice of what customers are not doing can help identify critical holes in your product offerings, as well as the areas where opportunity is ripe. For example, my team saw that freelancers were missing out on approximately $7.4 billion in potential tax savings every year by not claiming all of the deductions available to them (according to the United States Government Accountability Office). As a result, the team built a new feature into TurboTax Self-Employed called ExpenseFinder that automatically finds deductible business expenses, even those that self-employed people may not know they can claim. Helping customers get back money is a sure-fire way to make them happy!

How to Better Connect With the Customer

Whether you’re starting a new business or iterating on an existing idea, it’s important to set your ego aside and proactively take cues from your most important stakeholder: the customer. In my experience, this practice has been crucial to identifying new features for our products and even launching entirely new business units.

Some quick tips to help you on your product journey: if you plan to monetize your product, do it early – it’s an easy way to see if you’re creating real value before you go too far down the wrong path. In addition, take the time to sit down with customers in-person (at Intuit, we call these “follow-me-homes”), as customers are more likely to be frank and truthful when you meet with them in their own environment and face-to-face, and you’ll get important context that’s often missing in surveys and polls. And, finally, have your entire product team (especially those close to the product development process, such as engineers and designers) take turns answering customer support questions. Talking to a real customer about a problem can be scary at first, but solving for issues in real time will energize your team and you’ll find it’s a powerful way to feel connected to the customer.

Editor’s note: Originally posted on Inc. on May 30, 2017.

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