Engagement is the early buzzword at DF13. More than 100k people are packed into San Francisco and we’re all looking to cozy up to one person – the customer.
How about engaging with your customers so they can help you get the right products to market faster and cheaper? Oh, and when you do it right, they tend to spend more and buy more frequently.
Salesforce’s Reena Bhatia and James Taranto announced this morning the crucial role of open innovation in keeping your organization lean and profitable.
What is Open Innovation?
“Open innovation is the use of purposive inflows and outflows of knowledge to accelerate internal innovation, and expand the markets for external use of innovation, respectively.”
That’s Henry Chesbrough’s take.
In layman’s terms – use the power of your community to get ideas, solutions and services to the market quicker. Listen to your market. If you ask the right questions or look in the right places, they can tell you how to do things better, faster and leaner.
As a business leader, why should you care about open innovation?
Because not only is the inability to change a death knell for any company, but the inability to do it smart and quick will destroy your chances of serving your customers and beating competitors to market.
There were 250k new products introduced in 2010 – 66% failed in two years and 96% failed to return cost of capital.
According to Salesforce’s Bhatia, Director of Value Consulting and Taranto, Director of Solution Engagement, companies that employed open innovation when launching new products or services enjoyed twice the net present value than those that did not.
Examples of Successful Open Innovation Campaign
Dell IdeaStorm – pushing products to market with input from customers through hyper-connected networks.
- 15k submissions;
- 490 ideas implemented;
- revenue from IdeaStorm members is 50% higher;
- purchase frequency is 33% higher.
Proctor & Gamble – Swiffer came from an open innovation experience, as did the coating on Tide Pods (each from external developers, rather than customers)
Government Services Administration – “Great Ideas Hunt” – 600 ideas from employees. Five were implemented and saved $5.5 million and another 40 are in consideration.
Corning – B2B – They actually did B2B2C – using Radian6 they listened to people complaining about dropping phones and breaking glass. They approached manufacturers with stronger glass (Gorilla Glass) and successfully sold a product they had shelved years earlier (and helped cell phone manufacturers decrease R&D cycle time).
Bottom Line – You Have Product Experts Out There…Your Customers
Don’t just engage with your customers – engage with them in a meaningful way; throw the doors of innovation wide open; and gain better products and more profitable customers.