Product Development: Your Customers Are Smarter Than You

How do you develop new products that your customers actually want? Many companies are doing it wrong. Here’s how to get customer buy-in on new products right from the start.

Picture this: You’re at your favorite restaurant with three friends. The server welcomes you with a brief chat but never takes your orders. Then, about 15 minutes later, he arrives with an assortment of entrées for each of you. Yours is okay. It’s not exactly what you wanted, but since you’re starving it will do. Your vegan friend, Sally, has a real problem: The steak and cheesy broccoli the server brought her means she’s going to be pretty hungry for the rest of the night. Carl is on a low-carb diet, so his pasta dish certainly won’t help his weight-loss goals. But on the bright side, your other friend, Steve, is raving about his cheeseburger.

The server, as it turns out, had a 25 percent success rate at guessing what each of you would like best for dinner. Good thing this restaurant is hypothetical—Steve might come back again but the other three of you almost certainly won’t.

Yes, it’s a ridiculous way to do business—yet this is exactly what it’s like in new product development. Companies guess what their customers want (based on very limited information) rather than asking them. And that’s why the average company has only—you guessed it—a 25 percent success rate with new products.

In business, of course, we think we’re asking customers what they want. We call the process “Voice of the Customer”—but from my experience in working with B2B companies, almost everyone is doing it wrong.

Most B2B companies participate in “me-too VOC,” using surveys and questionnaires to pick their customers’ brains because that’s what everyone else is doing. Don’t get me wrong: Engaging customers is good. But the vast majority of us need to change how we approach the conversation.

Compared to end-consumers, your B2B customers are more knowledgeable, interested, objective, and fewer in number. They are perfect to directly engage! But an advantage is an advantage only if you know how to take advantage of it. And to do that, you first have to face the facts about how you’re currently doing things.

Here, I share four awkward truths about how your organization is currently developing new products:

1. Your customers are smarter than you. Have you ever heard anyone say, “Customers can’t tell you what they want: That’s why Steve Jobs never asked them”? It sounds good (if a touch arrogant), but that saying isn’t universally true. An iPod is a consumer—not B2B—product. Apple engineers designed a product they could easily see themselves using. You don’t have that luxury.

Imagine you’re developing a pigment for paper—a B2B product. Who knows more about its requirements: you or your customer, the paper producer? B2B suppliers are smart about how to develop a product, but B2B customers are usually smarter about what the product should do.

It’s different in the B2C world. Will a consumer like the new iPod shape, for instance? It’s hard to say without a prototype. But for you, the B2B company, the question might be, Will the paper producer want brighter paper or faster mill speed? This can be discussed and predicted.

2. Your VOC is boring customers. Be honest: Do you like to answer surveys at home? How about at work? Lots of free time there? Of course not. And your customers are no different. The last thing they want is to see you coming with a questionnaire or interview guide. What they do want is to help you innovate: They’ll be heroes if your new product or service lets their companies make or save money.

When you know how to truly engage your customers as opposed to simply throwing questionnaires in their general direction, exciting things will happen. First, your VOC interviews will last longer. Some great B2B interviews have actually lasted more than a day! As a result of the time spent together, your customers will volunteer more and richer insights, as they settle into their new role as your teacher.

Even better, because of their participation in the product development process, your customers will be “primed” to buy your product as soon as you launch it…because they helped design it.

3. You don’t know what you don’t know. I recall a client who couldn’t wait to go through their list of questions with customers. This client planned to confirm facts, validate hypotheses, and fill in gaps.

While the client’s enthusiasm was laudable, I had to tell them, “You know what you know (facts). You know what you think (hypotheses). And you know what you don’t know (gaps). But you don’t know what you don’t know. Only the customer knows the issues that truly matter to them—and you need to engage in a way that allows these important issues to surface.”

My point is, in the best B2B interviews and tours, the customer leads. The customer’s feedback takes the supplier to “the good stuff” and provides insights that were previously unimagined. Clever suppliers use advanced methods that continually put them in a position to be surprised. These surprises—not fill-in-the-blank interview guides—provide the spark for true innovation.

4. Your NPD process is backwards. Your new product development process probably begins with “Generate Idea” on the left, perhaps even decorated by a lightbulb icon. But does it specify whose idea it is: yours…or your customers’? Most suppliers start with their own solutions to assumed customer needs. And when do they test real customer needs? At the end…by seeing if customers buy their new product.

Here’s a thought: What if we flipped that, starting with customer needs and ending with supplier solutions? For starters, your R&D wouldn’t squander its time developing answers to questions your customers weren’t asking. Customers would see you were interested in them…not in “validating” your preconceived notions. And you would uncover and pursue customer needs your competitors had completely missed.Facing up to these awkward realities may not be your idea of fun, but it’s the start of a radical change in your new product development process. Believe me, it’s worth a bit of embarrassment. When you bring the customer into the conversation from the beginning, you’ll make your own job easier while strengthening customer buy-in. And no one will have to look at those boring questionnaires again!

About the Author:

Dan Adams, president of Advanced Industrial Marketing, is all about B2B product development. His free e-book, Reinventing VOC for B2B: 12 New Rules from New Product Blueprinting, reveals a new way for B2B companies to think about VOC, and his 2008 hardcover book, New Product Blueprinting: The Handbook for B2B Organic Growth (www.newproductblueprinting.com), clarifies the “fuzzy front end” of innovation. He and his company conduct training in every region of the world for top B2B companies, including Dow, DuPont, GE, Sherwin-Williams, and Saint-Gobain.