Engaging with customers begins as soon a a new product is discussed and sometimes years before a customer will use it. Such engaging to discern and understand customers needs establishes what customers value. Such discovery is critical to new product development. I call this ongoing discovery of value; value management.
NBN is a major infrastructure project in Australia, managed by NBN Co (http://www.nbnco.com.au/). NBN Co. is tasked with bringing high speed broadband to all Australians over the next ten years. Using fibre to the home (92% of homes), wireless and satellite technology, original capital estimates were around $43 billion (AUD). NBN Co. employs around 1000 staff to design the network while subcontractors build the network. NBN Co. customers are the Internet Service Providers that buy wholesale broadband services.
Whirlpool is Australia's premier broadband site for discussion and news (http://whirlpool.net.au/). Around ten years old, over that time Whirlpool has attracted 0.5 million members, 37 million posts on nearly 2 million threads.
NBN Co. had no dialogue with consumers beyond their presentations, media releases, Business and Annual Reports. This lead to much frustration that was vented in the NBN forum at Whirlpool. Fierce debate raged in the NBN forum over the pros and cons of the NBN with many torrid posts over the twists and turns of the project.
NBN Co.'s innovation was to engage with consumers, rather than the Internet Service Providers whom they sell to, in the Whirlpool NBN forum. Six weeks after I advised NBN Co. of the importance of engaging with consumers on Whirlpool. The response was significant. Within two weeks the first NBN Co. posts had attracted 12,000 view and 2,000 comments. The Whirlpool community was highly motivated to engage back with NBN Co.
Some 12 months later, the NBN Co. spokesman has made some 140 posts, still with major responses. A 29.03.12 post releasing the Three Year Rollout Plan attracted some 13,000 views and 1646 comments over two months.
NBN Co. is listenting and engaging with consumers, who while not the customers are the end users of NBN Co.'s services.
The key challenge to overcome for NBN Co. was getting past the assumption that consumers are not our customers and so we don't need to talk to them. While NBN Co. see themselves as an engineering company, all Australians will use their services as the NBN replaces landline phones.
The key benefits for NBN Co. will be improved consumer satisfaction. The Key Metric is to measure consumers' attitude towards NBN Co. In a gross sense this took place in the 2010 Australian election when the NBN became a major turning point for independent MPs deciding to form a coalition and government with the Labor Party. The NBN was decisive issue between Labor and the opposition conservative Liberal/National party.
Ongoing engagement with customers is an important business process. This process supports understanding what customers value, and how new products can meet customers' needs. An ongoing dialogue over value senses shifts in value and what customers value. I call this dialogue "value management".
Value Management derives from value research undertaken at University of Queenland Business School. This research examined 'how consumers understand value in 3G mobile phone' to develop a greater understanding of what value is, how the process of value works. In this way, the research aimed to shed light on how and why consumers adopt new technology, and how innovators and policy-makers can better encourage that adoption.
Research Title: A consumer value theory of innovation in 3G mobile phones: a grounded theory approach
Researcher: Richard Ferrers
Advisors: Assoc. Prof. David Rooney, Dr Josephine Previte.
This research builds from innovation and customer value literature.
Drucker, P. (1999). Management Challenges for the 21st Century. New York, NY: Harper Business.
Gronroos, C. (2011). Value Co-creation in Service Logic: A critical analysis. Marketing Theory, 11, 279-301.
Kim, C. and Mauborgne, R. (2005). Blue Ocean Strategy: How to create uncontested market space and make the competition irrelevant. Harvard, MA: Harvard Business School Press.
Porter, M. and Kramer, M. (2011). Creating Shared Value: how to reinvent capitalism and unleash a wave of innovation and growth. Harvard Business Review, 1, 62-77.
Prahalad, C.K. and Ramaswamy, V. (2004). The Future of Competition: Co-creating Unique Value with Customers. Boston, MA.: Harvard Busines School Press.
Vargo, S. and Lusch, R. (2004). Evolving to a New Dominant Logic of Marketing. Journal of Marketing, 68, 1, 1-17.
Vargo, S. and Lusch, R. (2008). Service-Dominant Logic: Continuing the Evolution. Journal of the Academy of Marketing Science, 36, 1-10.
Zuboff, S. and Maxmin, J. (2002). The Support Economy: Why Corporations are Failing Individuals and the Next Episode of Capitalism. New York: Viking.
Ferrers, R. (2008). TOWARD A VALUE THEORY OF INNOVATION - A GROUNDED THEORY APPROACH. DRUID Innovation Conference, Copenhagen Business School. Viewed online at: http://www2.druid.dk/conferences/viewabstract.php?id=3396&cf=29
Ferrers, R. (2012). Value Management: Innovation 2.0. Available online at: http://www.valman.blogspot.com/
See MixPrize Hack on value: http://www.mixprize.org/hack/focus-customer-value-not-shareholder-profit
Goldman Sachs estimates a similar NBN (National Broadband Network) in the US would cost $140 billion, around $1,000 per household.
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