Finding the Diamond in the Rough: The Magic of the Customer Utility Table

In my last blog post, I spoke about the importance of innovating not just when developing new products or services, but in everything you do. But this raises the question: How can you help your team members discover innovative ideas related to all of their workday activities—including ones they take for granted and rarely even think about? What’s needed is a systematic method for uncovering such innovative opportunities—a tool that will help your people focus on specific areas in which unrecognized customer needs and wishes may be hiding.

These unrecognized needs and wishes are like precious diamonds that have been hidden somewhere in an open field. If you were leading a team in a search for those gems, how would you maximize your chance of finding them?

The answer: By using a grid to divide the field into a number of distinct sections, each relatively limited in size. Then you can assign team members to scour each of those sections. This method ensures that no corner of the field goes unexamined.

There’s a tool you can use in the same way when you are searching for innovative business ideas. It’s called the Customer Utility Table (CUT).

The CUT contains vertical columns representing the various stages of the customer experience—for example, searching for the solution to a problem, choosing from a set of options, buying a product, bringing it home, using it, and so on. The horizontal rows in the CUT represent various forms of utility that customers may need or want as they work on solving their problem.

I suggest that innovating teams start with the six generic forms of utility as listed by Blue Ocean Strategy authors W. Chan Kim and Renée Mauborgne for the diagram they refer to as a Buyer Utility Map—namely, Customer Productivity, Simplicity, Convenience, Risk Reduction, Fun, and Environmental Friendliness. The team can modify this list of “utility levers” based on the specific innovating subject and the industry or business context.

When the vertical columns and the horizontal rows are combined, the CUT table subdivides the universe of the customer experience into a finite number of cells, each representing the intersection of one stage in the customer experience with a particular utility lever. Now you can send your team members out into the field to watch, speak to, and interact with customers and noncustomers. As they bring back notes based on what they hear and see, the CUT gets filled up with comments, each assigned to an appropriate cell in the table.

Not every cell in the CUT may contain a comment. But some cells may end up being filled with comments based on customer complaints, requests, or behaviors. These cells represent opportunities to innovate by creating new or improved forms of customer utility.

Here’s a simple example. Auto insurance is a product that virtually all car owners must buy—and one that most customers hope they will rarely or never need to use. So for many customers, the most difficult and frustrating stages of the car insurance experience are the first two—searching for an insurance solution and choosing among options. It’s difficult to get unbiased information about the many insurance companies and policy options, and the brokers who sell car insurance tend to describe the product using jargon that few laypeople comprehend.

After the advent of the Internet, a handful of car insurance companies, including Progressive and Geico, recognized that this customer problem created an opportunity to innovate. They created online information tools that make it easy for customers to get comparative price and coverage quotes from many insurance companies. This new service enhances the customer experience during the option-choosing stage, especially in the cells focused on Simplicity, Convenience, and Risk Reduction. Customers now have a great reason to visit the websites of Progressive and Geico rather than competing sites—which increases the chances they will end up buying from Progressive or Geico.

By dividing the space for exploration into distinct, smaller units, the CUT table makes it easier to search for specific opportunities to improve the customer experience. This tool greatly increases the chances that the precious diamond of a brilliant innovating idea will be discovered—no matter where in the customer experience space it may be hidden.

You can learn more about using the Customer Utility Table, as well as a number of other tools for innovating, in chapter ten of my book Built to Innovate. And if you are an organizational leader whose team could benefit from a master class—or a refresher course—in innovating, learn more about the speaking and training services I offer.

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