Outside Innovation How to Leverage Your Customers’ Creativity Patricia Seybold, CEO Patricia Seybold Group, Inc. NEDMA- May 14, 2007

What is “Outside Innovation?” Customers roll up their sleeves to co-design their products and your business.

Customers roll up their sleeves to co-design their products and your business.

What is “Outside Innovation?” Customers attract other customers and partners to build a vital customer-centric ecosystem around your products and services.

Customers attract other customers and partners to build a vital customer-centric ecosystem around your products and services.

What is “Outside Innovation?” Customers drive the design of your business processes, products, services, and business models. I want to get a great deal and get my rebate promptly, with no hassles! Staples Easy Rebate ®

Customers drive the design of your business processes, products, services, and business models.

© 2006 Staples, Inc. Customers determined how to categorize products Ethnographic research led to Easy Reorder

Lead customers Consultants Guides Contributors Promoters Five Roles Customers want to Play

Patterns for Customer Innovation Engage customers in all five roles: consultants, contributors, guides, promoters, lead customers Nurture customer communities Co-design with lead users/customers Provide tools & streamlined support to help them reach their goals Empower customers to “strut their stuff” Open your products and engage customers in peer production

Engage customers in all five roles: consultants, contributors, guides, promoters, lead customers

Nurture customer communities

Co-design with lead users/customers

Provide tools & streamlined support to help them reach their goals

Empower customers to “strut their stuff”

Open your products and engage customers in peer production

Mozilla is Designed by Lead Users & Contributors

Mozilla is QA’d by Users Acting as Consultants

Mozilla is Supported by Users acting as Guides

Mozilla is Promoted by Users

Karmaloop’s Lead Customers: Urban Streetwear

Karmaloop Community Finds and Reps the Products

Customers are acknowledged for posting Customers rate each other’s contributions! National Instruments’ Vibrant Community 50% of new products created by customers

Patterns for Customer Innovation Engage customers in all five roles: consultants, contributors, guides, promoters, lead customers Nurture customer communities Co-design with lead users/customers Provide tools & streamlined support to help them reach their goals Empower customers to “strut their stuff” Open your products and engage customers in peer production

Engage customers in all five roles: consultants, contributors, guides, promoters, lead customers

Nurture customer communities

Co-design with lead users/customers

Provide tools & streamlined support to help them reach their goals

Empower customers to “strut their stuff”

Open your products and engage customers in peer production

Their self-image is deeply connected to the problem domain at hand Passionate about their outcomes and issues Influential in their circles Thoughtful and insightful Imaginative, visionary Pragmatic, realistic Engage Lead Customers

Their self-image is deeply connected to the problem domain at hand

Passionate about their outcomes and issues

Influential in their circles

Thoughtful and insightful

Imaginative, visionary

Pragmatic, realistic

Zopa Founders Co-Designed with Lead Users Discovered a new Segment: Freeformers People who want control over their time and their careers People who don’t want to work full-time for one company as “slave laborers” Distrust banks and other financial institutions Have difficulty getting loans

Discovered a new Segment: Freeformers

People who want control over their time and their careers

People who don’t want to work full-time for one company as “slave laborers”

Distrust banks and other financial institutions

Have difficulty getting loans

Zopa Co-Designed a New Lending Model Identified Lead Users (in an un-served market) Conducted ethnographic research Ran co-design sessions Brainstormed possibilities Piloted peer-to-peer lending model Engaged in continuous learning

Identified Lead Users (in an un-served market)

Conducted ethnographic research

Ran co-design sessions

Brainstormed possibilities

Piloted peer-to-peer lending model

Engaged in continuous learning

Co-Designed a Solution to Meet their Goals I want to borrow money easily, on my terms, to meet my goals without dealing with an impersonal institution. I want to invest money safely, on my terms, grow my income, help others improve their lives.

Co-Design to Meet Customers’ Outcomes Customers’ Streamlined Scenarios Your Company’s Streamlined Processes Moment of Truth Moment of Truth Desired Outcomes

Moments of Truth = Business Opportunities A real “Moment of Truth” is a showstopper It keeps a prospect or customer from reaching their desired outcome It’s when they can’t get things done “their way” Goal: understand customers’ contexts, outcomes and key moments of truth Ask them to quantify metrics around moments of truth (elapsed time, conditions of satisfaction, specific parameters)

A real “Moment of Truth” is a showstopper

It keeps a prospect or customer from reaching their desired outcome

It’s when they can’t get things done “their way”

Goal: understand customers’ contexts, outcomes and key moments of truth

Ask them to quantify metrics around moments of truth (elapsed time, conditions of satisfaction, specific parameters)

The Koko Fitness Experience Designed with Customers Customers’ Moments of Truth: 30 minutes Don’t need to think Easy to use

Customers’ Moments of Truth:

30 minutes

Don’t need to think

Easy to use

Provide Tools to Help them Reach their Goals Koko Fitness Smartrainer

Koko Fitness Provides Realtime Feedback

Build an Ecosystem around Customers’ Outcomes

Use Customer Co-Design to Achieve:

Co-Design to Meet Customers’ Outcomes Customers’ Streamlined Scenarios Your Company’s Streamlined Processes Your Partners’ Streamlined Processes Moment of Truth Moment of Truth Desired Outcomes

What We Did in the Co-Design Session: Co-design streamlined Customer Scenarios and identify customers’ moments of truth and metrics Build organizational consensus around customer-critical issues Use customers’ metrics to drive priorities! Co-Design Customers’ Ideal Experience with Lead Customers

Co-design streamlined Customer Scenarios and identify customers’ moments of truth and metrics

Build organizational consensus around customer-critical issues

Use customers’ metrics to drive priorities!

Patterns for Customer Innovation Engage customers in all five roles: consultants, contributors, guides, promoters, lead customers Nurture customer communities Co-design with lead users/customers Provide tools & streamlined support to help them reach their goals Empower customers to “strut their stuff” Open your products and engage customers in peer production

Engage customers in all five roles: consultants, contributors, guides, promoters, lead customers

Nurture customer communities

Co-design with lead users/customers

Provide tools & streamlined support to help them reach their goals

Empower customers to “strut their stuff”

Open your products and engage customers in peer production

Provide Tools to Help Customers Reach their Goals

National Semiconductor’s WEBENCH  Toolkit Application Resources System Overview Diagram Layout Sortable Selection Guide WEBENCH Simulation

How Customers’ Designs Spur Innovation National Semiconductor has leveraged customers’ designs to be able to provide pre-packaged solutions for: Mobile phones Gaming controls and consoles Hand-held devices Flat panel displays Medical imaging etc…..

National Semiconductor has leveraged customers’ designs to be able to provide pre-packaged solutions for:

Mobile phones

Gaming controls and consoles

Hand-held devices

Flat panel displays

Medical imaging

etc…..

Provide Customization and Innovation Toolkits

Let Customers use Your Tools Anywhere! Design your shoes on your cell phone, and see your design on the Billboard in Times Square

Let Customers use Your Tools Anywhere!

Support a Continuum of Customer Innovation

Help Customers Strut their Stuff

Help Customers Strut their Stuff

Discover New Products & Services

Help Customers Strut their Stuff

Customers Will Create their own Mash Ups

Engage in Open Access and Peer Production

Next generation games: Co-designed by customers

Take-Aways Engage customers in all five roles: consultants, contributors, guides, promoters, lead customers Co-design with lead users/customers Provide tools & streamlined support to help them reach their goals Nurture customer communities Empower customers to “strut their stuff” Open your products and engage customers in peer production

Engage customers in all five roles: consultants, contributors, guides, promoters, lead customers

Co-design with lead users/customers

Provide tools & streamlined support to help them reach their goals

Nurture customer communities

Empower customers to “strut their stuff”

Open your products and engage customers in peer production

Patricia Seybold CEO, Consultant, and Author Patricia Seybold Group, Inc. [email_address] www.psgroup.com 617.912.3107 It’s YOUR turn! Questions, Comments, Feedback!

Patricia Seybold CEO, Consultant, and Author

Patricia Seybold Group, Inc.

[email_address]

www.psgroup.com

617.912.3107