The Value of Hutch Carpenter’s Customer Feedback Innovation Model

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Hutch Carpenter‘s Three Models For Applying Customer Feedback to Innovation is the best post on business innovation and social media feedback that I have read. For two reasons, one is that it provides a nice, succinct business-oriented model, and secondly it doesn’t mention “creativity” – my pet hate when it comes to business innovation consultants.

image from www.business-strategy-innovation.comCarpenter simply plots a nice graph with the X-axis representing the difficulty of getting feedback relevant to a particular objective and the Y-axis representing the impact on company results for the different objectives.

What a great image – something that could be left on the screen for the duration of a half-day workshop on the subject.

He also gives specific examples, applying his categorisation to My Starbucks Ideas which shows very clearly and simply the power of his model. I previously wrote about My Starbucks Ideas, noting that 0.03% of ideas get through – a simplistic analysis in the light of Carpenter’s model.

Value = Benefits – Costs

I’m a bigot for my own model of Value = Benefits – Costs, along with the hierarchy:

  • Value; is a subset of
  • Benefits; which is a subset of
  • Advantages; which is a subset of
  • Features.

To my admittedly biased mind this maps nicely into Carpenter’s model, where he categorizes suggestions into three groups, those which describe Featuresproduct or service requests, or the Product’s “job”understanding the deeper purpose your product fulfills, or form a Proposalputting a new concept in front of customer’s to understand its key value drivers.

How the models align

Carpenter’s Features actually embrace my Features and Advantages. The reason? Features are just “messaging”, hoping to hook into a segment which will respond to them. Where they do evoke a response, then the first level of that response is because of perceived advantages, to that segment, for some of the features. Therefore some or all the Features become Advantages to that segment, while remaining of no advantage to other segments. Thus “Advantage” requires some form of engagement.

My Starbucks Ideas already has that engagement. By the very act of people saying that they want something it means that they see an advantage in having it. A segment of 1. Therefore the base level of input are Advantages, in my terminology.

These Advantages (Carpenter’s Features) are essentially context-free – they would probably work in many other coffee chains and are without any linkage to business objectives.

When a suggestion becomes a Benefit

Next come suggestions for which it is possible to link into or align with the context of Starbucks mission and business purpose and therefore transform themselves into Benefits, or what Carpenter labels the Products “job”.

By this definition, a Benefit can only come from a business perspective e.g. from a Starbucks’ perspective, whereas a Feature/Advantage is from a customer’s perspective. It drives at extending the purpose of the business, but not radically – that’s the role of the Proposal/Value category of suggestions and analysis.

Proposals require business analysis

Suggestions which go beyond Features, far beyond, and beyond alignment with the current business model, are those which become Value, or in Carpenter’s model Proposals. Here we are looking for ideas that are at the fringe, are potentially radical, are from the edge inwards, and are somehow visionary. Carpenter notes that Roberto Verganti would also say that they have to be “attractive, sustainable, and profitable” and that’s the link to Value = Benefits – Cost.

At this Proposal level, the value can only be determined after clear definition of the benefits, and the costs, which would form part of a normal business case. Developing that kind of case, for a new visionary offer, is certainly hard work but with potentially outstanding business results, and that’s reflected by its top position on Carpenter’s Y-axis.

For me, combining Carpenter’s model with the “Value = Benefits – Cost” equation and the hierarchy of Features, Advantages, Benefits and Value delivered clarity and new insight into how to apply customer feedback to business innovation.

http://xeesm.com/walter

What value do you get form one or both or the combined models?

Have you seen better models for applying social media customer feedback to business innovation?

What’s your best example of these different forms of customer feedback and their results?

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