Design Thinking + Customer Community = Social Innovation

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When competition tries to decimate companies, the only thing that stands between them and annihilation is customers. We mean loyal customers! It costs roughly 5X more to acquire a new customer than it does to generate recurring and new revenues from an existing happy and loyal customer. Not only do these happy customers give more business but they also are responsible for referring others. A recent survey corroborated the fact when 75% of the respondents admitted that 20% of their new business came from current customers (Source: Loyalty360.) Customers are important. Listening to them is very important. Making customers engage and talk is of utmost importance. Period!

When customers have the option of switching between any of the B2B SaaS product, it is important to engage them by opening channels of communication. And what better way to open up the dialogue than Customer Communities. Did you know that support costs can be significantly reduced by having a customer community? And that’s just a start.

It’s given that the more active your community members are, the more actively they would be using your products. B2B SaaS products companies can just build a customer community and forget about it. But would it work?

Nothing works by itself. Community engagement can be encouraged through regular blog posts, videos, webinars and sharing product tips and this will allow customers to engage and discuss how the application is being used differently but efficiently. It is this sense of being engaged that brings ownership and customers take pride to invest in the discussion. Needless to say, it leads to churn reduction & higher NPS score.

We are not going to lay down the guidelines on how to create a customer community, as it’s a tried and tested formula. But there’s more to these communities than brand building and customer service. What we shall be focusing on would be using design thinking to nurture a culture of innovation in a customer community.

With lightning fast product cycles, widening market and access to smart people, it doesn’t take much time to either jump into the B2B SaaS product foray or lose an existing competitive advantage. What really can stand the test of time are product innovations.

Accidental or strategic innovation may or may not come from inside and that’s why product companies should look beyond the traditional and tribal knowledge fountain head and make it an open and collaborative process. Customer communities are one of the ways to integrate customer insights and feedback into a continuous innovation loop. B2B SaaS products companies can de-risk their product value hypothesis by:

  • Exploration of the current situation and framing the challenge (the “What is)
  • Generating new possibilities for growth and innovation (the “What if)
  • Testing assumptions and refining and prototyping the concept (the “What wows)
  • Enrolling customers to shape it into something that can be executed (the “What works)

This approach makes product companies to shift from exploration mode (the “unknown unknowns”) to collaborative problem solving mode (the “known unknowns”). When a design thinking approach is applied strategically in a customer community, it can definitely foster a “way of life” of innovation. These phased approach of running with an idea; validating and prototyping it; failing and trying again can help product companies get demand insights, design insights and system insights and these insights are the ones that lead to the discovery and co-creation of a path breaking innovation. To give credence to this fact, there are myriad case studies on how Tableau and TriNet innovates together with its customer community or how Starbucks reinvented itself based on innovative ideas from its customer community.

Given the level of ambiguity and uncertainty associated with certain innovations, it requires utmost care to incorporate design-thinking approach to see patterns in creativity in the customer communities. Like in most cases, some of the innovations can be serendipitous and some may come through a managed innovation process. Nurturing a customer community facilitates interplay between external (i.e. customer) perspectives and the product company’s capabilities. We need to put in a caveat that not all ideas generated by a customer community can pass muster on the grinding wheels of strategic innovation.

Henry Ford, Steve Jobs and Clayton Christensen would surely disagree with the above hypotheses but their polarizing statements cannot discount the importance of customer communities and how they can be used to break the four walls by solving problems with an emphasis on need identification (through ethnography for instance), visualization (through storytelling), prototyping, validation and iteration.