From the moment you start selling a product or service, it is becoming obsolescent. Initially, you may solve a problem for a customer - you help them do something they couldn't do before - you do a better job at something than anyone else, but then things begin to change.
Customer expectations change - as your solution becomes the new floor for what is expected in the future.
Customer needs change - as their businesses change, as their objectives change, as they themselves change.
Markets change - as competitors figure out new ways to take business away from you.
How fast your product or service becomes obsolescent depends on a lot of factors - but it's as reliable as entropy, death and taxes that your product or service has an expiration date on the lid.
That's why everyone must innovate - not just if they want to succeed, but ultimately if they want to survive.
Thankfully, people are, by nature, adaptable...and so are your customers. More often than anyone wants to realize, customers are very good at adapting your product or service so that it solves their problem. In a process not unlike jamming a square peg into a round hole, customers will take what you give them, then adjust, support or work around it to get what they want.
For example, in the days of vinyl records, music lovers wanted to hear music, so they were willing to buy large and akward plastic discs that scratched and degraded easily, just so they could hear a song. Music lovers bought huge stereo systems to play the records, took over entire closets to store the records, they learned how to clean the record with special brushes, to gently handle the record by the edges and to delicately place the needle in the right groove. They even learned to bump the record player when the needle got stuck.
And record companies learned to help music lovers by giving them the same thing they already had, only a little better. They reduced prices by manufacturing poorer quality vinyl. They made the large discs more interesting by packaging them with "album cover art".
For decades, to love music meant to love vinyl records. The symbol or "brand" associated with music was often that of a record.
Customers were willing to use a technology decades past it's expiration date, not because it consistently and easily delivered good music - but because there wasn't anything else available - and they adapted to the existing technology.
And when they were presented with something better, such as CD's - it took less than five years for everyone to switch. When they were presented with something even better at delivering music on demand, the mp3 player, they switched even faster.
It is extremely dangerous to rely on customers' willingness to adapt. The moment someone has a better answer - the adaptation will end and they will abandon you.
But if you discover the adaptation first, your customers can guide you to innovation.
Asking customers what they want is pointless at best, and destructive at worst. When asked what customers want in the future, most likely they will describe a version of what they can get now - only with a little better quality, some slight changes in design, and at a much lower price. Surveying customers with direct questions around innovation can even help you persuade yourself not to innovate.
"Research shows that customers love album cover art, they even hang it on their walls; they'll never buy a small disc or a digital file."
So instead of asking customers what they want, perhaps you should observe how they are adapting your square pegs to their round holes.
The best customers to watch are the "hackers". By "hacking", I mean a certain kind of creative development practiced by computer giants such as Steve Wozniak or Linus Torvalds and all the behaviors, methodology and thought processes that allow them to develop new approaches to problems. Not to be confused with the criminal exploits of those trying to obtain credit card numbers or infecting computers with viruses, true hackers adapt whatever is at hand in order to create very useful products, services, and systems.
Jon Erickson introduces his book, Hacking: The Art of Exploitation, with the following:
"The essence of hacking is finding unintended or overlooked uses for the laws and properties of a given situation and then applying them in new and inventive ways to solve a problem - whatever it may be."
Substitute the word "innovation" for "hacking" and suddenly Mr Ericson's quote becomes a useful definition for innovation. At the same time, it's a useful model for the kinds of customer behavior you might be need to observe.
For example, when Harley-Davidson's business was pummelled in the 1970's by Japanese competitors able to deliver a better quality motorcycle for less money, customer "hacks" allowed them to find a new definition for their company, their products and their customers. Even as new bike sales continued to drop, their accountants were able to see that their after-market parts business remained strong. It became clear to the company that their best customers were customizing their bikes - "hacking" them to make them more personal.
The accounting insight led to a realization that they could innovate the motorcycle business. Instead of selling the best quality or the highest performance motorcycles, instead of rejecting the dark images of motorcycle gangs, they could embrace their hackers and become a premium lifestyle company. They could sell customization, club membership and the romance of an old-fashioned, rebellious, and incredibly loud experience. Motorcycle sales jumped upwards, along with branded clothing, accessories, tatoos, and of course, after market parts.
Despite some difficulties in recent years, the turnaround of Harley-Davidson remains one of the more innovative re-inventions of a company. All because they noticed how their customers were hacking their product.
Are there customers hacking your services or products? Are they using them in a different way than you think they are?
Find out, and you may be able to find meaningful - and profitable - innovation.
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