April 26, 2011 by Bob Hill
Posted in: In this week's e-newsletter - Sales & Marketing, Latest News & Views - Sales & Marketing, New Research, sales management
Should companies be more focused on engaging buyers or developing innovative products and services?
While both are positive strategies, a study conducted by the consulting firm Booz Allen Hamilton, Inc., found: “Companies that directly engaged their customers had superior results regardless of innovation strategy.”
The study also revealed companies that ask customers for targeted feedback prior to making changes, then act on that feedback have superior results in two areas:
- Profits. Average income for new product launches is three times higher than competitors, and
- Returns. The ROI on promotional costs, production and marketing
is 65% higher on average.
The study makes a clear distinction, however, between companies that claim they take the customer into account, and those that specialize in gathering and acting on feedback.
Companies are generally labeled as either having:
- Indirect customer insight. The customer is considered when the company designs a new campaign, but the company bases its choices on past feedback or “knowing the marketplace,” or
- Direct customer feedback. The company uses focus research, social media, one-on-one interviews and solid numbers to determine how it will produce and market its products (and why).
The latter was found to produce stellar results time and again.
Based in part on “Customer Engagement: Your Secret Weapon for an Innovation Strategy that Rocks!” an article by Dan Adams.