Books
Customer-focused activity
Outside Innovation
Patricia B. Seybold
Collins, £14.15/$26.95
When procurement leaders talk about external innovation, they generally think in terms of their suppliers rather than their companies' end customers. The notion of involving both groups in the development process is winning a growing audience, but it is customers who are the focus of author and consultant Patricia Seybold's book. She aims to encourage the widest view of innovation: not only products and in-house R&D but also services, new industry models (eBay and Dell, for example) and supporting the activities and ideas of end customers.
Can it work? Well, "outside innovation" already accounts for more than half of R&D spending in software, in the form of open-source programming.
Elsewhere, parents were used to test children's toy Bob the Builder Click Bricks, but they also proposed new shapes, textures and bricks and cut the development process by eight weeks.
Pros: makes a still-novel idea seem like common sense
Cons: largely US-focused, apart from a BBC case study
Predicting Market Success
Robert Passikoff
John Wiley & Sons, £29.99/$55
Some books have "takeaways" or "key points" at the end of each chapter: Robert Passikoff, founder and president of Brand Keys, exceeds expectations by using cartoons from the New Yorker. He claims that products, places, prices and promotion (the traditional 4Ps of successful marketing) have been replaced by his - rather tortuous - 3Cs of customer engagement, customer expectations and customer loyalty.
The key to profiting is the ability to measure and predict this customer loyalty. Price is not a decisive factor: "Most customers leave a brand because another brand better meets or exceeds their expectations about specific attributes and benefits." Teasing out the emotional factors in a purchasing decision (far more important than the rational ones) means identifying category drivers and anticipating changes in their order and importance. Passikoff also explains how, for example, potential sponsors can pick the sports team that will boost sales furthest.
Pros: pithy and witty, with an extract from Yes, Minister
Cons: not always the easiest book to follow
Scoring Points
Clive Humby, Terry Hunt and Tim Phillips
Kogan Page, £25/$39.95
Tesco, which turned in a £1 billion profit in the first half of this year, is widely admired for its ability to inspire and maintain customer loyalty.
A major part of its astonishing growth has been the Clubcard, found in 10 million customers' wallets and purses. "We could not have created the dotcom business [whose sales in 2004 reached £700 million] without the data from these cards," said Sir Terry Leahy, chief executive.
The cards, launched in response to customers' comments that the retailer should reward its shoppers, provide the meat of the book. The authors' coverage includes the foundation of a loyalty scheme - is it an opt-in scheme or an automatic programme? and so on - the effect of Clubcard on sales, the "mass customisation" of its magazine for cardholders, and the launch of new products and services, including a bank.
Pros: packed with examples from a clear business leader
Cons: a bit self-congratulatory: two authors work with Tesco
Alliance Brand
Mark Darby
John Wiley & Sons, £29.99/$55
Enlisting customers into the search for new products and services is only one way of tapping ideas outside the organisation. For Mark Darby, "partnering" and "alliances" offer a wider expression of the concept, extending it to encompass suppliers, consultancies, other departments and even competitors.
The critical success factors are the capability to partner, picking the right partner, and an effective relationship structure. In the latter, Darby, who led the extended enterprise consulting team at Deloitte, touches on customers and the "complex relationships" in which two companies may be partners in one area of the business, each other's clients in another, and competitors in a third arena. Among the supply chain material is a neat example from Rank, which saved 30 per cent on seating for new venues through partnering.
Pros: clarity of design is matched by the words
Cons: weblinks to some footnote reports are broken
