3 Challenges of Innovating the 'Product Surround.'

Customer services representative symbolising the importance of service and support to customer purchasing decisions.

Don’t waste innovation on products! – That is what a recent article in Forbes magazine exhorts us to do.

The research that supports the article focused on the technology sector – but may be relevant to other sectors.

The study identified that it is not product innovation that customers value most, but rather the quality in areas such as customer support and relationships.

The researchers make the case that ‘the best product does not win’. In fact, they say, many customers are prepared to choose an inferior product from a supplier which offers high quality support and a trusted customer relationship, rather than go to an alternative supplier who can offer them a product with superior features and benefits.

Thus the authors encourage us not to waste innovation time on products but to focus on developing the service and support area.

Benefits of Innovating the 'Product Surround'.

Strategic marketers have long advocated that innovating in the 'product surround' – the service, support, and sales process that wraps round the product, is an effective way of differentiating products. They have argued that it can lead to much longer term gains in competitive advantage than can be achieved through product innovation.

However, innovating and upgrading the product surround as opposed to innovating the product presents its own challenges.

3 Challenges of Innovating the Product Surround.

Different Skill Sets.

Innovating the product surround requires quite different skills from product invention. Innovating the support and service can require investment in interpersonal and communication skills for support staff. Sales training may need to be enhanced with a particular focus on relationship building and customer insight gathering.

2. Long Term Commitment.

It takes time to develop improved customer services and support functions. The investment has to be for the long term and consistent. A short term approach to budgeting can lead to varying investment levels which will have adverse effects and take further time to correct.

3. Even Greater Customer Understanding and Customer Focus.

Product development requires customer insight and a customer focused approach. Product surround innovation can involve even greater investment in customer understanding and insight, and on an ongoing basis.

How to Innovate the product surround?

So, assuming you are in a position to invest and make a long term commitment to developing the product surround. How do you go about it?

One of the most comprehensive and effective ways of doing this is look at the challenge as a business model innovation project.

Business model innovation generally follows a three stage process. It requires both analytical and creative thinking at different stages of the process

Business model analysis or mapping
Business model assessment
Business model innovation.

A business model template is a good tool to use. Through this process no area of the business is left “unmapped” and “unanalyzed”. From propositions to customer relationships. From cost and revenues structures to assets and relationships.

Business model innovators looks at these areas individually and also at how they relate to each other.

At the heart of business model innovation is a business wide SWOT analysis.

It’s demanding, thought provoking, stimulating and can be hugely rewarding exercise for any business to undertake.

Smart companies are not giving up on innovating product. Rather, they are spreading their innovation efforts to ensure they include both product and product surround… In fact, there is enormous benefit in revisiting the whole business model as part of the annual planning process. This gives you the opportunity to innovate the business model and to both capitalize on the opportunities and respond to the threats that this approach can help you discover.