Outside Innovation presented on May 11, 2007 at CRMC CALA

Outside Innovation How Your Customers will Co-Design Your Company’s Future Patricia Seybold, CEO Patricia Seybold Group, Inc. Customer Relationship Management Conference 2007 Caribbean and Latin America May 11, 2007 Coral Gables, Florida

Get Your Seat at the Strategy Table By making it easy for your Customers to: - Do business with you! - Achieve their goals!

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

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

Use Customer Insight & Co-Design to Achieve:

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)

Building Contractors’ Moments of Truth

Deliver within 1 hour of when I need it

Let me change my delivery time with no penalties

Make it easy for me to meet my deadlines

Cemex: Meeting Moments of Truth

Customer-Outcome-driven Eco-system

I want to:

“ Buy building supplies for my DIY project”

“ Pay as I go”

Led to fastest growth retail brand in Mexico

Co-designed with retailers

Next: “ I want to complete my project before I have the cash”

Patterns for Customer Innovation

Identify 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

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

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

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

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.

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

The Koko Fitness Experience Designed with Customers

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

Provide Customization and Innovation Toolkits

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

Support a Continuum of Customer Innovation

Provide Tools to Help them 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…..

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

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

Help Customers Strut their Stuff

Customers create their own Mash Ups

Engage in Open Access and Peer Production

Next generation games: Co-designed by customers

Key Take-Aways