How do you build a long-term, sustainable relationship with your customers? The key is to deliver services that make their lives easier, says Mr Lluis Martinez-Ribes, Associate Professor at the ESADE Business School of Barcelona’s Ramon Llull University, Spain. He suggests that while “best practices” have a place in a service business – often for back-end operations such as logistics and finance – it is “next practices” applied to the front-end of the business that will set it apart.
“To adopt a best practice is to jump on the bandwagon and be market-driven,” explains Mr Martinez-Ribes. “Next practices, on the other hand, involve creating a trend and driving the market, while staying focused on the customer.”
Such service innovation carries a risk, of course, but there is often an even greater risk associated with carrying on with business as usual. “Customers are always changing. This process is very gradual, but it adds up to significant changes in a surprisingly short period of time. Because the change is gradual, it can be difficult for businesses to notice it and adapt – and this is a danger,” notes Mr Martinez-Ribes.
Understanding your customer
To stay one step ahead, it is critical to have a strong understanding of your customers. Mr Martinez-Ribes notes that this is different from simply meeting their demands.
“The source of innovation is not to obey customers, but to understand them. Ask them questions so you know their needs,” he explains. “You need to put on the customers’ shoes to understand what they are experiencing and what can improve their lives.”
This can be achieved through in-depth interviews, focus groups and other research methods that use projective techniques – indirect research methods that allow you to infer what a participant wants, rather than asking them directly and getting a potentially biased or unrealistic answer.
The next step is to take this new understanding and look for opportunities to meet customer needs that have not been exploited yet. “Be open to the unexpected and think out of the box.”
“Customers are the source of innovation. As long as you have access to your customers, you can get started with customer-centric innovation.”
Associate Professor Lluis Martinez-Ribes,
ESADE Business School, Barcelona’s Ramon Llull University, Spain
Getting started
He suggests looking for opportunities to collaborate with partners and suppliers as a starting point. By working with others, it is possible to come up with new ideas and services that you could not create on your own.
It is also important to carefully consider your targeted market segment, instead of trying to cater to everyone. “The pre-requisite for service innovation is learning to say no to certain customer segments and targeting other segments by finding new ways to service them,” he says.
While customer-centric innovation may seem challenging, it is an avenue open to all companies, regardless of size.
“Trends are there to be broken, not just to be followed – and the good news is that this is possible even for SMEs,” notes Mr Martinez-Ribes. “Customers are the source of innovation. As long as you have access to your customers, you can get started with customercentric innovation.”
You can find Associate Professor Martinez-Ribes’ blog at www.martinez-ribes.com.
Reproduced with permission from SPRINGnews June 2013 Issue. Published by SPRING Singapore
