Ready to Drive Innovation? Start by Talking to Your Customers

How building product manufacturers can extract ideas, comments and feedback from customer communities and then leverage that intelligence into useful, relevant innovation.

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It’s no secret that customer feedback helps companies extract insights from the people who matter most. By leveraging customer interviews, usability tests, surveys and customer advisory boards—the top-four tools according to a recent UserVoice survey—companies can get the good, the bad and the ugly on what they’re doing and on what they need to be doing better.

Constantly challenged to stay ahead of their competition by designing, developing and launching products that will sell successfully in their markets, building product manufacturers (BPMs) must be able to innovate effectively, using solid, honest customer feedback to get product development right.

Whether a firm has 10 customers or 10,000 clients, this feedback helps BPMs:

• Discover key customer pain points (and then figure out how to solve them)
• Identify the features and functionalities customers care most about (and deliver on them)
• Prioritize product road maps accordingly (to make sure they’re on target and relevant for customers)
• Find and develop new market niches
• Prevent customer churn (acquiring new customers costs five to 25 times more than retaining existing ones)
• Motivate their teams to success

These benefits are especially important in the current selling environment, where BPMs work through distribution models—or with designers—and lack personal contact with end users. Put simply, they just don’t have a tremendous amount of visibility on the end result of their product.

Innovation Isn’t Cheap

Bringing building products to market is costly. Product teams put a lot of time into collecting and managing customer feedback, and, as products mature, invest even more time into garnering and utilizing that feedback. The problem is that most product teams lack a consistently effective process for closing the customer feedback loop. As a result, they often miss out on the key benefits of a closed-loop feedback process.

Here at FMI, we often run into BPMs that think they’re listening to their clients, but in reality, they rarely do an effective job of it. Gathering the right feedback is difficult, but understanding how to take action on that feedback is an extremely difficult, yet critical, step in the product innovation loop. Here are some key challenges:

• Honest feedback doesn’t always go over well. Product development or marketing departments may not want to hear the truth. Instead, they may protect the product they have worked hard to develop. After all, negative feedback can make them look bad and set them back on product launch schedules.
• Asking the right questions is critical. Figure this out early, and the overall customer feedback process will be much more successful. Focus only on the most important questions.
• Marketing and product development teams aren’t always the best ambassadors. The customer may tell you what you want to hear, and you may be tempted to ask leading questions. Honest customer feedback requires the right environment and the right questions; set up a customer council and bring all participants to your location to contribute in a group council setting.
• The wrong things may be incentivized. Asked to launch a certain number of products per year, the product development team that receives negative input on a new product in the development stage may take a hit when annual bonuses are handed out (e.g., if the number of products launched is the metric).

While few would question the importance of customer feedback in the product development process, actually collecting and managing feedback is a necessary, but difficult, task. Done right, this process leads to rigorous analysis and complements data-driven decision-making. Therefore, it’s in the product team’s best interest to find and embrace efficiencies in feedback collection wherever possible. This will allow the team to spend less of its time managing data and more time uncovering insights and understanding its users.

It’s Never Enough

On average, companies spend about 12.4 hours a week (or 2.48 hours per day) collecting and managing customer feedback (Exhibit 1). In rating their feedback follow-up effectiveness, 19% of companies follow up sometimes, 35% follow up all the time, and 44% do so most of the time (Exhibit 2).

Exhibit 1. Time Spent by Product Stage

Source: “The Influence of Customer Feedback on the Product Development Process.” Survey. Uservoice.

Exhibit 2. Feedback Follow-Up Effectiveness Rating

Less than 50% of respondents, regardless of product age, said their process for following up on customer feedback is effective all the time.

Source: “The Influence of Customer Feedback on the Product Development Process.” Survey. Uservoice.

Regardless of how long a particular product has been on the market, customer feedback should play an important role in the product development process. BPM product teams should reflect on what aspects of collecting and managing customer feedback are taking up the bulk of their time and then seek out ways to streamline their processes and improve efficiencies.

The problem is that many companies are not engaging customers early enough in the process. Waiting until a product is near completion makes the job of getting customer feedback extremely difficult.

If the product is already developed, for example, it’s hard to stop and make changes—and too costly to scrap the product—when that negative feedback starts to surface. One of the best ways to avoid this challenge is by always putting your customers first. In other words, ideas for new product development should originate from your customer feedback.

Where Are Your Products Really Going?

Because they’re selling through a two- or three-step process, BPMs don’t always know where their products will end up or who will be using them (e.g., when a manufacturer sells to a consultant who then works with a distributor, a dealer and/or a mechanical contractor).

These scenarios make pinpointing the end customer—a key step in the customer feedback game—difficult, but not impossible. To overcome this issue, BPMs must proactively find out who those end users are and how those customers influence building product specification, selection and procurement.

When working with BPMs, FMI talks to them about the key role that stakeholders or “influencers” play in specifying their products for particular projects and applications. In many cases, a junior architect or interior designer makes that product selection, but isn’t necessarily buying the products himself or herself. The question becomes, who is next in line behind that architect or designer? The answer is usually a subcontractor or specialty contractor (aka, a dealer).

Of course, an architect and a subcontractor have different concerns from one another. To further complicate the situation, there’s also a general contractor (GC) managing the flow of the trades on the job, and who has its own list of must-haves and product requirements. In most cases, for instance, the GC wants to know when products will be available and whether those items can be at the job site on a certain day and time.

The chain of customer command doesn’t end there. At the top of the pyramid is an owner who is only interested in whether the product he or she is selecting is significant, aesthetic and/or costly. An owner who is focused on building sustainable environments, for instance, wants to know that the selected products will contribute to the overall goal (e.g., automated towel dispensers or low-flow toilets).

Developing a Customer Council

To effectively gather and utilize customer feedback—and then parlay those insights in an innovative way—BPMs must consider the drivers for every one of these stakeholder groups. One of the best ways to do this is by forming a customer council and ensuring that there’s good representation across all the different groups that have a say in product selection and specification.

To fully leverage that information, BPMs must factor in all of the input gathered across those groups (that make up the customer council) and make the important, innovative choices that positively impact all customers (and not just the junior architects that are specifying products).

In return for these efforts, manufacturers can begin to understand what products are no longer competitive or no longer relevant. They can also better understand the trajectory of their products, which, upon reaching maturity, either must be reinvented for another stakeholder group, repackaged or taken off the shelves.

When Real Feedback = Profitability and Success

Anticipating customer needs and then serving those customers well isn’t always easy, but it’s a very necessary part of a BPM company’s mission. To best serve those evolving needs, customer feedback can provide that critical link between “wondering” what clients want and truly making them a part of the product development process.

Knowing that the success rate of new product development can be improved by getting real feedback from customers before the product launch happens, many companies have realized significant cost savings from investing in effective customer councils.

Organizations that regularly follow up on customer feedback win by having a closed-loop, honest feedback process. Those that ignore this step risk leaving their customers in the dark, wondering whether their feedback is being used—or even heard at all.

Finally, customer councils can also positively influence the company brand (i.e., when products are not dropped as often), which allows for less customer distraction from product disruption. Salespeople will be motivated and pleased to see that their company is investing in getting real customer feedback, and the entire organization will operate in a more profitable and successful manner.

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