Lead User Research is a new way businesses are driving innovation, by identifying new trends before they happen. Lead User Research (LUR) is different, traditional market research collects information from the core target markets, where Lead User Research seeks out the early, early adopters. Once the company finds these individuals, they will then work with the lead users to solve a problem within an industry.
Lead users are no different than most people; in fact we are all lead users in some niche industry. These individuals are unique because they experience the same needs as your core target market but they experience them substantially before the general public.
How Can You Use LUR?
Lead User Research doesn’t assist incremental innovation; it is a facilitator for cutting edge, drastic innovation. LUR is great for mature businesses looking to regain competitive advantages within an industry, according to Creating Breakthroughs at 3M, by Eric Von Hippel, “to counter this trend, management set a bold objective: 30% of sales would come from products that had not existed four years earlier. For the company to meet that goal, many people at 3M- senior managers, marketers, product developers, scientists- would have to change their approach to their work.” If your company innovates incrementally, and has an “its better to seek forgiveness than ask for permission” stance on employee innovation, you are inefficiently innovating.
Phase 1. Laying the Foundation
Identify the type of markets your business wants to target, and create a team to facilitate the lead user process.
Phase 2. Determine Any Trends
Your companies lead user team will seek out experts in your desired market. You then will determine any trends or problems within the industry that need to be addressed.
Phase 3. Identifying Lead Users
One of the most unique advantages of lead user research is the insight you will get from different people. Selecting experts with a wide array of talents and skills in different industries may be challenging. For instance, 3M manufactured surgical drapes; they employed a theater makeup artist to give insight on how cloth fits the body, a veterinarian, and a handful of industry leading surgeons. In this stage you will begin to design preliminary product designs.
Phase 4. Developing the Breakthrough
Bringing together your lead users, lead user teams, and internal marketing department teams, the “aha!” moment should come in this stage. You will have pages and pages of notes from your lead users; and the problem in this stage is not finding what can be improved, it is deciding on the best innovation out of the bunch. Once you have decided the products you will innovate, push forward with all departments, keeping lead users on call for additional input.
You may think that all this sounds like “big business” budgeting, but Salesforce.com actually was able to startup their business on LUR. According to the presentation on Lead User Innovation at Salesforce.com, “Benioff and his partners saw an opportunity to serve a part of the market that was being overlooked by the big players like Oracle and Siebel. These customers included small businesses, nonprofits, and other firms that required unique CRM solutions. Within four years the company had acquired 8,700 customers, 127,000 subscribers, and numerous awards. By the end of 2007, Salesforce.com had over 38,000 customers and 1 million subscribers.” Salesforce used it’s own internal interface to extract valuable lead user input for product innovation. Playing where others aren’t is the key to creating a sustainable competitive advantage.
If your business is able to use the Lead User process to facilitate innovation you will be able to reap the profits for years to come. With the advent of the Internet, you should be able to successfully identify lead users in your industry, which will give you valuable insights. LUR doesn’t have to be a costly process; it can simply be a different methodology for innovation. Instead of waiting to copy, act to innovate.
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