Innovation is about saying no to the 99 things and saying yes to the one thing that is going to add value to your customer. You need to ask the question “what difference does it make to our customers?” This question will not only keep you grounded in your end goal but is what should point you to the areas of innovation to focus on. We spoke with Senthil Padmanabhan, Vice President, Technical Fellow at eBay, who shared how eBay thinks of innovation not by just trying the newest technology or items on the market but by first asking what is important to the customer.
How to Identify What Is Important to Your Customer
First, we need to know what the definition of value is. Harvard Business Review explains a customer’s value as the following, “Value in business markets is the worth in monetary terms of the technical, economic, service, and social benefits a customer company receives in exchange for the price it pays for a market offering.” So in short, you need to understand how your customers view the benefit of your product or service and how you can increase their satisfaction. Is it a technical, economic, service, or social benefit your customers gain from using or buying your product?
However, benefits aren’t all about the money. There are also some benefits your customers might attribute to the value of your product that do not correspond to the monetary value such as efficiency, ownership, quality of product or service, experience, etc. The list of non-monetary benefits could go on but the sole idea is the customer’s value is going to be determined by a simple equation. Customer Value = Benefits – Costs. Different customers will find different levels of value in your product or service and as you innovate it’s important to remember the range of benefits different customers are experiencing. Once you’ve decided what the true value of your product is for your customers it’s now time to turn to finding ways to innovate in that space!
Increase Satisfaction, Don’t Make Noise
Once you know what exactly adds value to your customers by using your product or services it is now time to find new ways to enhance their satisfaction. However, you want to make sure when trying out new practices or technologies you are focused on helping your current customers and future customers add value to their experience. You do not want to add noise by simply trying what everyone else is doing. You need to make sure it aligns with your goals and customer’s expectations! Marketers are always talking about the new shiny objects in the tech space but it’s important to not always go chasing them. Some of these shiny objects may make sense but make sure you access their purpose and see how that aligns with your own goals as a brand.
Value is key in any part of the customer experience. Whether they are a potential customer or a customer of five years you need to ask yourself what value have they seen in your product or service and how can you enhance that value through new ideas. As Guy Kawasaki, Chief Evangelist at Canva says, “If you provide enough value, then you earn the right to promote your company in order to recruit new customers. The key is to always provide value.”