Preparing for Tomorrow’s Customers Today
October 28, 2016
Case categories include: Entrepreneurship Leadership Strategy & Planning Trends
By Warren Lutz
Growing companies that hope to be industry leaders must be among the first to solve a pressing problem for customers. With a torrid rate of change and a plethora of competitors, long-term success requires constant reinvention. Yet seeing the future is quite hard.
Barb Paldus’ company, Finesse Solutions, uses a variety of methods to anticipate the types of products bioprocessors will need in the future. Attending conferences and trade shows, reading and networking are all part of the mix.
Oftentimes, the company’s clients don’t know what they need—but Finesse Solutions builds the products anyway.
“We give them prototypical equipment, let them play around with it, and get their feedback,” Paldus said. “That interaction is a big part of our strategy.”
The challenge of anticipating client needs is certainly not unique to the biotech industry. Leaders in every field are struggling to stay abreast of a fast-moving economy and major technological shifts in order to accurately market demands. Paldus, like other Alliance members, has developed her own approach that begins with “listening very carefully to our customers,” she says. “Ten years in, our ears have gotten better. Listening is far more important than talking, and listening to a very different diverse group of clients, in addition to looking at statistical trends, is important in getting the definitions right and innovating successfully.”
Such an approach helped Finesse develop universal controllers for bioprocessing that have contributed to a 35 percent growth rate for the company. “We saw the industry move to a plastic-based process, and every vendor had controls, but they came in different boxes and had different operating systems,” Paldus said. “We created a controller that works with any process, and since 2013 it has taken off like wildfire.”
While they may use other methods, other Alliance members also look to their customers first to identify future needs. “We meet with our customers, invest in user group meetings, and have created an advisory board to gather as much customer insight as possible,” says Antoine Villata, COO North America of Planisware USA, a provider of B2B enterprise software. “We also ran an ideation campaign where we compiled all of our customer feedback and surveys, and solicited our customers for feedback and new ideas. It’s a very practical way to not only improve our product offering, but also to understand what our clients do and what sort of outcomes they are looking for.”
Villata estimates that a quarter of his time is spent traveling and visiting customers. His company supplements this intel by paying attention to competitors, reading books and research papers, following trends on social media, and partnering with thought leaders and hosting joint presentations for its customers and prospects. “It takes a lot of listening to your customers,” he says, “but you also need to be curious, read books, and meet with industry peers.”
Clearly, most CEOs focus on customer feedback to determine future wants. But does that mean customers have all the answers?
The late Steve Jobs made a point not to survey Apple's customers because they couldn’t articulate desires for things they didn’t even know existed, and that focusing too much on their input would only lead to incremental improvements, not game-changing innovations.
Joe Budelli, Senior Vice President of Global Licensing at ABBYY USA, a provider of optical character recognition and document imaging software, agrees client feedback is critical, but observing customers is equally important.
“Many of our users may not know what they need and are very slow at changing their behavior,” Budelli said. “Look at Uber and Lyft—these were companies founded by people who were looking at consumer behavior and found there was room for disruption in the market on a grand scale.”
The challenge is to find out what ABBYY’s customers need before they do. In order to do that, Budelli says, the company combines customer feedback with data and analytics to identify repetitive tasks that can be automated and made more efficient. This approach created the foundation for ABBYY’s latest technology, which summarizes the contents of documents that are stored in various systems and “gives people more insight about what’s on the document other than keywords, so they can find what they need when they need it,” Budelli said.
Industry events are also a major source of inspiration for Bill Grosso, CEO and Co-Founder of Scientific Revenue, a provider of dynamic pricing solutions for mobile gaming companies. “You have to go to where your customers hang out, and you have to listen,” he says. “We go to a lot of conferences to talk to our customers, potential customers and even gaming companies who are never going to be our customers, and find out what people are concerned about and where their interests lie. Having those conversations is something that is very basic but often overlooked.”
Grosso says there are companies in his space that focus on individual problems but frequently miss the bigger picture. For example, in the mobile application industry, there are advertising problems, retention problems and pricing problems. Scientific Revenue is leveraging big data to address all three. “Our belief is that these problems can all be solved by the same data sets and the same product,” Grosso said. “That's where we're going over the next two years.”
Arwed Niestroj, President & CEO of Mercedes-Benz R&D North America, says his company opened offices in Silicon Valley more than 20 years ago to leverage the region’s resources for innovation. “We closely monitor startups and accelerators and create new ideas in our talented teams, then we either integrate these new ideas ourselves or work with the company to develop the application for Mercedes-Benz,” Niestroj said.
In order to create a “beautiful, seamless experience” for tomorrow’s drivers, Mercedes-Benz also has “two-fold conversations” with customers. It asks customers for their future needs, then asks customers for feedback on the company’s ideas. “This is the most exciting time for the auto industry because there are so many massive technological changes,” Niestroj said. “These changes don't compare to anything over the past 50 years; maybe over the past 100 years.”
Glen Shu, President & CEO of Bay View Funding, said innovation is important even for a specialty financial service such as factoring. “Many parties within the financial services industry want to be in our space because they see it as a simple, straightforward and lucrative business,” he said. “For us, the focus is on how we are able to differentiate ourselves from the many competitors within our marketplace.”
Shu says companies that use factoring range from small businesses with limited staff and resources to large publicly traded entities. To help these companies, Bay View's factoring services includes (beyond the financing piece), receivable management services, collection services, and credit work. “We’re constantly looking at providing additional product verticals to make our service offering stickier, and on occasion perform surveys to find out what our customers need beyond what we offer,” Shu says. Providing a consistent, high-quality client experience is also important, he adds. “You’ve got to stay in touch with your clients, you have to keep your arms around them, and you have to stay engaged, in whatever form that may be.” Since 1985, Bay View Funding has been providing quality accounts receivable factoring services to businesses across America.
Predicting future market needs will always be an inexact science. For these Alliance members, fulfilling future needs depends largely on a substantial and ongoing effort to deeply understand their customers and how their worlds are changing.