Can Your Sales Team Capture the Voice of the Customer? It Depends
In my blog posts as well as in my book Built to Innovate, I’ve emphasized the importance of the voice of the customer as a source of innovative ideas. After all, the point of business innovation is to create new value for customers as well as for your organization—and who knows better what your customers will value than your customers themselves?
This is a simple point, even an obvious one. But the challenge for many companies is the gap that often exists between customers and the team members who need to envision, develop, and implement innovations. Many people inside companies, including those who are viewed as having special responsibilities for innovating, have few opportunities to interact with customers. And the staffers who connect with customers most frequently, such as those working in departments like sales and service, are often so intensely focused on their day-to-day tasks and goals that they have little time and bandwidth available for innovating.
Innovative companies have tried various ways to solve this problem. For example, Ecocem, an innovative cement manufacturer profiled in Built to Innovate, creates cross-functional teams of sales people and engineers who meet with clients together. The opportunity to hear first-hand from customers about their challenges, problems, and wishes helps Ecocem’s technical experts develop solutions that are not just scientifically sound but offer practical solutions to the real-world issues that customers care about most.
In other cases, companies try to close the gap between customer-facing employees and innovation specialists in an even more direct way—namely, by turning members of the first group into members of the second. In a recent Harvard Business Review article by Andy Wu, Goran Calic, and Min Basadur titled “4 Types of Innovators Every Organization Needs,” the authors report:
In a study of Japanese companies, we found that in the best performing organizations engineers and scientists hired into the R&D department began their careers in sales, not the R&D department. When we asked why, they said, “We don’t want them to think that we are going to give them problems to solve. We want them to learn the problems of the customer.”
The notion of turning sales professionals, with their intimate understanding of customers, into innovation specialists triggered an observation by my co-author Karl Weber, who has worked for decades in the American book publishing industry. He notes that, in book publishing, the crucial product innovating role is played by the editor, whose job it is to imagine concepts for new books, select authors who can produce them, and then publish them effectively. And he points out that, in college textbook publishing, most editors actually begin their careers with a stint in the sales department. They learn how to envision successful new books by selling the company’s current line of products and talking with customers about the kinds of books they’d like to buy in the future.
Thus, US textbook publishing uses the same innovating strategy employed by the Japanese companies studied by Wu, Calic, and Basadur. But Weber points out that, by contrast, US publishers of general-interest (or “trade”) books generally don’t turn sales people into editors. Most editors of trade books are former English majors who usually have little or no sales experience.
Why the difference? The explanation is simple. In textbook publishing, sales people have direct contact with customers—namely, the college professors who choose the books their students will read for class. The problems, preferences, and wishes of those professors can be turned directly into practical ideas for innovative textbooks that are likely to create value for customers and sell well.
Things are different in trade book publishing. Sales people in that industry don’t have direct contact with the ultimate customers (i.e. book readers), but only with the managers of retail bookstores, who are the people who purchase the books from publishers. The publishers’ sales reps hear about customer preferences only indirectly, via the retailers. The indirect customer insights that sales people collect in this way are useful, but not nearly as valuable as the direct insights to which textbook sales reps have access—which helps to explain why trade book sales reps rarely move into the editorial ranks.
The fact that feedback from sales people in trade book publishing is indirect and therefore only partially accurate helps to explain a perennial problem in the industry—the large quantities of books that are purchased by retail booksellers and displayed on their shelves, only to go unsold. According to long-standing industry practice, these books are returned to publishers who must refund their purchase price and also pay for the shipping costs. The high costs of these returns represent a huge drag on publisher profits—all caused by the gap between book customers and the in-house editors who are responsible for supplying innovative products those customers will love.
Today, future-oriented trade book publishers are looking for ways to use digital technology to forge more direct connections between customers and editorial staff. If they can bridge this gap, their ability to innovate effectively will be enormously enhanced.
Bridging the gap between customers and non-customer-facing staff—your organization’s would-be innovators—is a challenge most companies face. In some cases, the people in the sales department can play a crucial role in meeting the challenge—but in other cases, it may not be so simple. As book publishing illustrates, the difference is a matter of market structure.