As researchers, scientists and inventors, we are often caught up in ideas and their potential. We think about concepts we are interested in and how they can be practically applied. We think about the changes we can make, and see opportunities in the fields of research that excite us. We think we have the best ideas and that those ideas will be great technology and products. We see how these items can change the way the world lives. As we explore the ideas and our research proceeds, we see more and more potential.
Ask the Customer
What we forget about or overlook in the excitement of discovery is simple and complex: So what? Who cares? What does the customer really want? When it comes down to the bottom line of commercializing research or technology, it is rarely about how innovative the product is. It may in fact be a “better mousetrap,” but if the old mousetraps work for the marketplace, the customer, then they may decide they don’t need a better one. Your mousetrap may be more innovative; it may be the best mousetrap ever designed; it may also require users to do something differently. It may, in other words, solve a problem that no one really has, andthe old mousetraps work just fine. They are cheap, easy, and do the job.
The customer says to you and your new mousetrap: “So what? The one I have works just fine. Who cares that the new design is “better”? I just need one that works.”
Of Diapers and Mousetraps
A new disposable diaper was launched in the marketplace this year (2010). The new diaper is more absorbent, thinner and easier to use—but much more expensive. The marketplace has not rushed to the store to buy the “better” diaper. In the current economy, the increased cost has not overcome that the current diapers are “good enough” for the customer. The marketplace says “Great idea … but too expensive,” which is bad news for a great idea.
Based upon the lack of market adoption (usage by the customer) of this new innovative diaper, many business experts and commentators say that innovation is over and that price is once again “king.” I don’t necessarily agree. Innovation for the sake of introducing a new retail product may no longer be an easy sale, but innovating to solve a real market problem and improve products that still need improvement, and understanding what the customer wants is still the key. Innovation will continue to be needed, but it must be done with an understanding of the customer and in the context that it is not innovation at any price. Innovation for the customer is the bottom line.
Innovation for the Customer: Value for the Price
Particularly in this price-sensitive economy, companies must become more focused on the consumer. They need to understand the value for the dollar in deciding which good ideas to pursue, how much to invest, timing, and the price the market can pay—or is willing to pay—for the innovation.
For decades, cost and price have been part of the equation in introducing new products, developing new technology and seeking alternative solutions to existing problems. However, in the last 10–20 years, the cost/price/value element of new product development has been less prominent in the analysis, because consumers and businesses had the ability to purchase and spend pretty much what they wanted, on whatever they wanted. Now for most individuals and organizations, spending is a concern. “How much for what and why do I need it?” comes into the buying decision on a daily basis, because the economy, credit constraints, job losses and overall perception about the future is more pessimistic than it has been for decades.
Time for Innovation
In a down economy, there is room for innovation, new ideas, new products and new technology. However, they must be customer focused. They must solve a pressing problem, and must be created for customers who are willing and able to pay for the innovation at a price that includes profit. Moving research from the lab to the marketplace will require an in-depth, carefully researched understanding of the customer and what they want to buy.
It is always time for innovation; however, it is also time to return to the sound business practice of understanding how innovation can be applied to solve a pervasive consumer need. The days of innovation for innovation’s sake are the “good ol’ days.” Today we innovate to solve problems, meet needs and answer the questions: “So what? Who Cares? How much is it worth?” – to the customer.
Author: Lea A. Strickland, MBA CMA CFM CBM GMC
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