Customers Help Define Business Model

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I am fascinated by IT Conversations. This is an audio service using podcasting to deliver up to 140 megabytes of audio “conversations” daily with IT experts. The founder has a very useful service and apparently a large number of users.

Now he is asking for his customers to help him find a business model that will keep the service alive.

Using a Wiki, he posts his ideas about his business model (part advertising, part subscription or micropayment) and then asks for feedback. What he gets is hundreds (or at least dozens) of ideas freely contributed by his users–some of them avid users.

I love the idea of providing a free service which is widely adopted and then engaging your interested users in helping you create a sustainable business model. In this case, this approach is being taken by a highly technical company founder who has technical users (they’ve already embraced podcasting) and is capable of setting up a Wiki for feedback. Some of us can’t set up a Wiki, but we can easily create a Yahoo Group or Google Group and email our best customers so that they can talk to each other and to us about what they want most.

At MyFamily.com a private web site was created for hundreds of our top site administrators. One of our engineers visited the site every day. I visited it often. We received hundreds of excellent suggestions from our best customers, and in one case, one administrator created a spreadsheet of the top 100 enhancements they wanted on MyFamily.com. The value we received from our best customers was incredible. They loved our engineer because he truly cared about their opinions. He personally fixed problems they found and coded enhancements directly from their suggestions, without going through any product management layers. I loved this Rapid Development approach that brought the engineers and customers together onto the same team.

I think most companies don’t really care about their customers very much, don’t ask them questions, don’t engage them in discussions, and don’t create opportunities for them to discuss among themselves what should be done next.

Does you company have a way to continually be engaged with your customers? Do you personally? If so, tell me about it. If not, why not?

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2 Responses

  1. Micheal Green

    As a major player in the homebuilding boom in the west, we have had to re-evaluate our position on customer service. Being that our market is limited to those who are 55 years or better, we are compelled to focus on what our specific market will respond to. I have found the following things helpful in our quest for 100% customer service and satisfaction.

    – Focus Groups – I am a huge fan of these. If run correctly, they can have a huge impact on what my marketing plan will or will not include for the next year.

    – Surveys – I am grateful the automobile industry has had a huge re-focus on surveys the last few years. Again, if properly administered, a survey can net powerful, unadulterated results for a company.

    – Ask Questions – I have found that so often that retail companies seem to be afraid of their customers. I think this is ridicules. If you are afraid of what your customers are going to say about you and your business, then you either need to change your product or get out of business. I don’t think your business ego can get in the way of serving your customers.

    Let me offer a practical example. As I mentioned before we have a specific market of those who are 55 or better. The trend in the homebuilding industry is to focus on the internet for the bulk of marketing. However, often I hear that those in my market are not “computer literate” or that they are going to be turned off by not focusing on traditional marketing. However, after several focus groups and a gaggle of surveys we discovered that those in my market are not only hip to technology, but often value a company based on it. Rarely did we find someone who did not want information via the internet. So my challenge as marketing director was to develop a website that was attractive to the eyes of those 55+ rather than my 27 year old eyes. Again, enter the focus group. I feel confident now that we have a site that is not only functional but is also attractive to our market. At the end of the day, it will equal sales on the board.

    I know the solutions that I have offered are simple, but I just don?t believe that customer service and satisfaction needs to be a complex matter.

    Anyway, I hope that helps-

    Micheal Green

  2. Some companies are able to provide rapid development for their customer base as you’ve mentioned with MyFamily.com. For other software companies, however, customer enhancements must go through a careful review process; otherwise chaos would ensue. Software development for highly regulated industries (FDA pharmaceutical or device companies) demand a detailed audit trail of all changes, why they were created, what areas were affected, and how they were validated to work. This process does mean development may not be as responsive to the customer as they may like. However, the changes delivered are (in theory) higher quality because of the review process. It may not be instant gratification for the customer but the process does have the customer’s best (and long term) interests in mind.

    On a different note, is there any concern about losing competitive advantage when the creation of company strategy is so public?

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