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The Magic Behind Customer Innovation

Tapping Into Customer-Driven Innovation

Companies that are truly customer-centric balance internally generated innovation with new ideas and advances from customers themselves. They actively solicit customers for their feedback and ideas, and then share with customers how that information was used. A growing number of companies are engaging with employees, customers, and business partners to create a conduit for new product, service, and customer experience ideas.

One of the best examples is Starbucks, which introduced a site called where customers can submit ideas for new products and suggestions for improving the customer experience. Since the site was launched nearly four years ago, more than 250,000 people have signed up and more than 100,000 ideas have been submitted. As of March 2012, 130 customer-led ideas have been acted on, including a mobile payment app for the Blackberry Torch and an online build-your-own-beverage experience. Starbucks also demonstrates to its customers that their input matters, even when it turns down some ideas.

"Companies can build stronger and tighter relationships with their customers by allowing them to share innovative ideas and include them in the brainstorming process," says Susan Piotroski, managing director of Peppers & Rogers Group U.S. Meanwhile, customer-inspired ideas can lead to the types of products and services that customers want, helping to stimulate new revenue streams while optimizing R&D spending. A new Peppers & Rogers Group study examines how companies create a collaborative approach to innovation.

Customers Fuel Multiple Innovations
Customers often suggest new products they’re interested in. But there is also a lot of potential for customers to influence improvements in the overall business, not just for a particular product or service. This includes feedback on customer-facing processes that can be improved, streamlined, or even eliminated. “Because customers are on the receiving end of interactions with companies, they can offer unique perspectives on ways for improving business processes,” says Don Peppers, founding partner of Peppers & Rogers Group.

Customers Fuel Multiple Innovations

Sources of Innovation

Taking a Structured Approach