Embracing Customers as Co-Innovators

Scott Anthony over at Innovation Insight, Harvard's Discussion Leaders and President of Innosight highlights one of the challenges when embracing Customers as a source of innovation.

"As part of a broader effort to reinvigorate the company, Starbucks
recently rolled out a mild-tasting coffee called “Pike Place Roast.” It
has quietly moved away from offering bolder-tasting coffees, such as
its Sumatra brand, particularly in the afternoon.

Starbucks brought Pike Place Roast to market in response to
complaints from Consumer Reports and others that its coffee tasted
bitter or burnt. A small group commercialized the brew in six months—an
astonishingly short period of time in the food industry.

While Consumer Reports and the mass-market has cheered, a vocal
group of core Starbucks loyalists panned the coffee—one reviewer on a Starbucks Web site designed to solicit customer feedback called it a “fundamental, grievous error”—as watered down and away from what makes Starbucks distinct.

Incumbents seeking to create new growth often face a version of this
dilemma.

"Should we listen to our best, most loyal customers, or should
we turn our ears towards customers we’re not serving well, or even to
customers we are not serving at all?"

Like many things in innovation, our belief is that wise companies
turn this “or” question into an “and” statement. Companies have to have
the ability to listen to and serve their best customers while
simultaneously finding out how to listen to and serve dissatisfied
customers and customers who don’t consume anything at all."

and…

"Just listening to your best customers can be dangerous. After all, your
most satisfied customers have little incentive to tell you to do things
fundamentally differently in the face of disruptive trends in your
market. Alienating those customers is the wrong move too, because loyal
customers are the profit engines of most companies."

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