How to Innovate by Observing Customers

You probably think that innovation is something people do in bright conference rooms with flip charts, colored pens, and sticky notes. If your answer is Yes, you are right, that’s how a lot of innovation is done but it’s not the only way it is done. Sometimes the best innovation happens, not when you are in a conference room, but when you are observing customers in the field.

This is because when you are with customers several things happen.  You are watching a real customer in a real environment and you can experience this person’s world first hand.  You are better able to put yourself in the customer’s shoes and understand their needs and frustrations as well as really see the details of their environment—things you could never do in a lab.

To help illustrate this experience, let’s assume you are a product manager who is observing a customer in her home using the Web to shop. You sit next to her while she operates the computer. There is video camera trained on her face, on the computer screen, and on the area around her computer. The two observers in attendance make sure that the cameras are always focused on the right activities so that you can focus on the customer.

You observe that the area around the customer’s computer is cluttered with mail, pamphlets, and magazines and on top of all this stuff is a half empty coffee cup. You observe the sticky notes stuck to the frame of her monitor and the note pad next to her keyboard. You realize that her world is far from the clean and uncluttered environment that you imagined. It is a various and complicated place where every detail is a distraction in the making.

Your company’s product is well known Web site and it doesn’t surprise you when you ask her to go shopping that your site is the first one she goes to. She navigates to a new page, scans the page, then navigates to a different page. She does this several times.

The phone rings, a dog barks, and kids arrive home unexpectedly from school. She stops and restarts her work several times. You realize that your site is not the center of her world as you imagined it or, more importantly, not even for the hour or two that she decides to use it.

She frowns and, before you know it, she has landed on a competitor’s site. This is exactly what you didn’t want to happen. You wanted to observe her using your product —not the competitor’s. Now that she has left your site, you worry about how valuable this interview will be. You want to show her where option x and y are—these are the options that would allow her to continue the task she was doing  and remain on your site, but then you remember that as an observer you can’t tell her how to use the product. She is on her own.

You realize that, unlike you, she hasn’t committed every single feature of this product to memory—every radio button, drop down box, and system state. She doesn’t know that this is your site or how much work went into developing it, the processes with which you are well acquainted, such as product planning, system design, software development, and quality assurance—to name a few. You suspect that if she knew these things, maybe she would have given your site a second chance and, perhaps, remained on it longer.

She picks up her phone and calls her husband. After a moment, you realize she is asking him for advice. She pulls out a consumer research magazine from the pile of stuff on her desk —slightly rocking the coffee cup. She thumbs through several pages and then pauses to read something. You wonder why she leaves the computer when the computer should theoretically provide all the information she needs. It is the Internet, you tell yourself. She continues this process of navigating to a new page, scanning the page, then navigating to a different page.

But then it occurs to you that maybe this offline behavior —using the calculator and calling her husband—- is telling you what the product should be doing. In other words, maybe this behavior could provide clues as to how to design your product better. Perhaps the information that she enters into her calculator and writes on her pad is actually information that the product should be processing. Or, better yet, maybe it is information that doesn’t need to be processed at all. These insights are what is typically referred to as incremental innovation. You are not disrupting or challenging assumptions about the product. You are improving an existing feature so that it provides more value to the customer.

The fact that she telephoned her husband and browsed a consumer research magazine could be telling you something altogether different.  Maybe the product should provide more information, more specifically, information that helps the customer make decisions, sometimes referred to as decision support. Maybe the product should go a step further and actually guide the customer in making these decisions. These improvements may be innovation of the disruptive kind. You are not just improving an existing feature but actually introducing a whole new area of functionality. It challenges assumptions about the product and often means a significant change to the way the product is designed and developed— potentially big stuff.

You glance at the video cameras that are recording the sights and sounds of the interview. You realize that you can review everything that happened that day at a later time and this will allow you to see and hear things that you may have missed. At the end of the interview, you will have the opportunity to interact with the customer. You can ask her to return to pages she had visited and even walk through tasks if necessary. You will also have the opportunity to ask her why she did the things she did.

Even if the customer never returns to your site again, you realize that you learned a lot from the interview even though much of her time was spent observing her using a competitor’s site and doing things that had very little to do with the Internet. The fact that the customer did not succeed doesn’t seem to matter.

You also realize that the experience as simple as this was could help you improve the product and even make big changes. By observing the customer’s paint points and breakdowns with the competitor’s product, you were able to get a sense of what the ideal product might look like. By observing the offline activities (calculator, phone call, etc,) you were able to see beyond your assumptions about the product, detect important patterns in activities that at first might have seemed ordinary or irrelevant, and get a glimpse of a what a big change to the product could mean for the customer.


18 thoughts on “How to Innovate by Observing Customers

  1. Here’s another thought: how can the brand be a part of those “offline” interactions? Basically I mean this: if the problem is defined as “the consumer left the website and went elsewhere for information,” then the strategy is “add more information/functionality to the product/website.” This is by no means a poor strategy and I certainly think we should look to the behavioral clues that will help drive this kind of strategy, for the reasons described in the last few paragraphs.

    But I also like to think of ways to fulfill that need to check more than once source, the need she’s filling by turning to her husband and magazines. Is there a community that can be built that a customer can turn to as well? An engaging twitter contact? Certainly no easy task to develop truly innovative structures of this nature, but I like to think on it.

    Here’s to insightful observation. Something I absolutely love. Thanks for the thoughts!

    1. This is a thought provoking comment and I had to think about this one a few days. 🙂

      Social networking (Twitter, online communities) would be an interesting way to support this user. However, when it comes to large purchases, consumers are more likely to rely on offline advisors for shopping advice. The challenge is how can you make the online community or online advisor more like the trusted offline advisor. Are there any characteristics of the offline trusted advisor (accountant, auto mechanic, sibling, or spouse to name a few) that we could use to inform the social networking solution and make it more credible for these shoppers? This is a tall order and there may not be an easy solution to this but I thought that I would throw it out there.

      Thanks for commenting and I hope to hear from you again.

  2. If you do add functionality to your site, do it via n-tiering and syndication. A buyer has no reason to rely on a vendor’s information. They want to see other people’s info.

  3. Interesting. I like the notion that more insights could be gleamed from things that lie in the periphery of the product being researched (competitors, offline behaviors, access of different medium, etc.), rather than limited to the product itself.

    In solving problem, I always pay attention to the problem’s basic properties and elements, rather than its literal or conceptual description. I believe that this aligns closely with your research principle.

    It would be fascinating to have this talk and compare notes sometime, obviously!

    1. Actually, there is another research technique that I really didn’t touch on in this post called open ended interviewing. Open ended interviewing is different from observational research in that you ask the participant to talk about attitudes, values, and motivations rather than tasks and you are better able to probe the participant on language and meaning. (e.g. What does shopping mean to you?) Because you do not constrain the discussion by a tool, you are able to get a bigger picture of this “periphery” that you referred to.

      Would like to compare notes sometime.

  4. Whoa… nice fantasy… the sexy sexy part is where she *goes to her social network sites* to ask for info on the product. That’s what 75% of electronics consumers do now… and about 35% of retail.

    How’d ya miss that?

    1. Actually, customers rely more on offline trusted advisors for big purchases. Examples of these are spouses, children, and sibliings or people they have long standing business relationships with, such as mechanics, accountants, lawyers, and doctors. They rely on these offline advisors more than they do online social networks.

      1. Then support communications with those offline trusted advisors. Set up a password protected webpage that aggregates all the info they searched, so that their advisors can look at it with them. Enable free VoIP to phone, and text messaging as part of your cost of sale. And, there is email and RSS.

  5. Thomas Horan in his 2001 book “Digital Places: Building Our City Of Bits” said that “one of the things [digital technology] cannot provide is the deep love of a caring family.” I agree with Gibbs. When seeking trusted advice, people will tend to go offline.

  6. Definitely some great points here, Gibbs.

    You’re spot-on that the observer who only focuses his attention on when the participant is directly engaging the product/service/site is missing valuable insight.

    Of course, it helps to have a research veteran understand what occurrences are anomalies and what is predictable behavior, but there are always lessons to be learned.

    In one my gigs a little while ago, we conducted contextual inquiries during the early stages of a new form-based web app that was replacing a command-line interface. We quickly discovered the people/users had memorized basically every command and never looked up at the screen or removed their hands from the keyboard (shock, it was a command-line, right?). Anyway, it’s safe to say we quickly scrapped any thoughts of 3-level drop down menus and began prototyping a keyboard-command driven UI where the mouse would only provide access to ancillary or additional info.

    Good post and I look forward to reading more…

  7. I think your contextual inquiry example is a great example because it underscores the need for the bottom up or inductive approach when it comes to user research. After you had an opportunity to observe your customer’s work practices, you realized that the three level drop down menus would not provide the value that you originally thought. You chose instead to design a keyboard-command driven UI which was presumably more suited for users who were doing repetitive tasks.

  8. Customer visits should never be conducted alone. Bring some folks from other departments; Marketing, Support, Engineering … yes even Sales.

    Each has the own way of perception. They’ll see things the current fantasy missed. But even if they don’t, you get more rapid buy-in.

    They are “our” observations instead of your observations. “Our” initiatives instead of another set of your initiatives.

    In this new situation the fantasy really begins. Innovation as a group, instead of all alone again.

    1. THanks for our reply. It brings up some interesting questions.

      When I conduct this kind of research, I usually try to bring some one from product management, interaction design, or visual design along. Depending on the organization, I may grab some one from Customer Support,QA, or Engineering. I usually conduct an hour debrief after each interview. When all the interviews are completed, I conduct several two hour analysis sessions with the people who attended the interviews. This really helps in getting to the “our” state that you talk about. This is where I try to get everyone on the same page. After the findings from the study are presented, then the productization phase starts. This is where the innovation happens. What’s important here is to make sure that everyone involved in productization is well grounded in the research findings. In my opinion, it is very difficult to innovate without being well versed in the customer visit data.

  9. Over time, the focus moves from functionality and UI to work and to meta management considerations like those tied to the Hype cycle.

    Marketing always translates features to benefits, aka task performance. Some features are just software features because it’s software. These are unrelated to the user tasks, but we are stuck with them because they are part of the platform, the carrier. The rest of the tasks are tied to user task performance, which aggregates into getting the job done.

    Moving from user task performance to getting the job done requires experience on the part of the user. They learn how to align and connect the software to their work. This is work design, trading off the application constraints against the requirements of the work to be done. This can be automated, but typically is missed.

    Management has roles at the interface, so management gets done within the application. The larger issues of value arrival requires another layer of management, the meta-management layer which like work is designed, meta-management design.

    We won’t arrive at meta-management the day we launch the product. The initial market doesn’t need it. We won’t deliver work design either, because the initial market doesn’t need it. But, as we move into our red ocean, our offer will expand beyond the software and deeper into the meta spaces.

    Observation will confirm this.

    1. You covered a lot ground in your reply. I will try to address the stages of the product development process that I am typically involved in. I would assume that meta management, for example, happens after the product has been launched and that’s long after I have exited. I will also say that there are several types of research that are conducted during product development and each type has its place.

      First, I try to establish the ideal user model independent of the constraints of monetization, technical limitations, business capabilities and so on. Weighing these priorities is really the job of the product manager, not a researcher. Prioritization is usually done during or after the productization phase, not the research phase. Concept testing is typically conducted during the productization phase. However, every organization is different and your model may be completely different from mine.

      Defining the ideal user model is important because constraints are often removed during the product development process. Establishing a user model can be very challenging depending on the scope of the research project. A user model with a narrow scope is usually more attainable.

      Task performance is more of a downstream consideration. Usability testing should be done after productization. Usability testing is where you test performance in a lab setting. Usability testing is often conducted long after the front end research stage I described in the post.

      I don’t know Agile should fit into this process. I suspect that Agile loops would begin somewhere during productization but I don’t know. I welcome comments on this.

      Awesome feedback. Thanks

  10. Given that the launch of a product is just the initial purchase, and software companies make their money on upgrades due to the lower cost of sale, the interface would evolve from tool tasks to user tasks to work to meta-management. I don’t know why you wouldn’t be involved with each release.

    1. I guess I would be involved in the any front end research and innovation activities that would occur before a new release or upgrade Because meta-management presumably involves managing the entire product mgmt cycle and my role is typically limited, I would probably not be the best person to drive that.

      1. Meta management is the assurance of the success of the last phase of they Hype Cycle, which focuses on value realization. It involves macro-scale managment processes. There should be some functionality involved.

        It’s not an product management cycle issue as much as a different target for functionality.

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