How Customer Input Is Important For Product Development Strategy

5 min readJul 10, 2020

The link between inter-firm relationships and product development has received a lot of attention in research and practice. Businesses access valuable information from key customers to understand their problems and needs in a better way. This helps the product developer to formulate his product development strategy. New product success is highly impacted by the involvement of the customers.

Businesses are able to execute a successful product development strategy only when they communicate with their key customers as it increases the amount and variety of information that overall improves the quality of the product development process.

Sellers need to decide how willingly they want to meet customer needs through product configuration and the best way to know this is just interacting with customers. Businesses involving customers in the product development process require commitment in the relationship from both, the customer as well as the seller.

The impact of customer involvement in product development depends mainly on two factors i.e- the marketing strategy of the firm and the level of specific investments. If the relationship between the customer and the seller is concrete, the investors will prefer investing in product development. Also, the level of investment depends on how successful are the marketing strategies of the firm.

Drawing On Customer Knowledge

Businesses require access to quick information on short notice to adapt their products and services in response to their competitor’s move. This crucial information can be obtained through market research and market intelligence. But businesses can also obtain the same information from a well informed and interested customers called lead customers.

This allows businesses to adjust their product offerings and match the moves of their competitors. Customers can suggest businesses in the product development part. They can suggest a particular design for a product, how to smartly price the products, adding new features, and so on.

Certain business investments that focus on customer relationships can be undertaken in response to the moves made by the competitor. Such investments upgrade the existing or a new product and overall provide great value to the customers purchasing the same. It also improves the way a customer looks at your firm’s offering when compared to your competitor’s product offering.

Defining Customer Relationship Profitability

Customer engagement in product development should enable the supplier to develop products and services that provide great value and fulfill the needs of the customers. Engaging customers should enable the supplier to develop functional requirements, modify product appearance to reduce the production costs, and develop personalized products in some cases when catering to a VIP customer or specific group of customers.

Furthermore, customer involvement should make the product distribution process to the customers more efficient. It involves using methods such as the integration of supply activities into customer’s processes. Businesses can also look into improving the procedures for communication and feedback.

Benefits Of Having Customer Inputs In Product Development Process And Strategy

Having customer input in your product development process ensures that you are moving in the right direction in terms of product development execution. Furthermore, businesses are able to control their spending and invest judicially in product development and managing risks at the same time. These include both, short term as well as long term risks. Businesses are able to monitor their spending by allocating budget to each step and move forward to the next step after achieving the desired outcome and output. Customer inputs help in making product changes and improvements earlier in the process when the production cost is likely to be less.

Companies get a very broad comprehensive customer response by collecting data from multiple channels. Repeated customer engagement ensures the brand building and retainment of the existing customers. Showing loyalty and trusting your customers through continuous engagement with them in the product development process shows how much you value your customers. This will help your firm to have a pool of happy and satisfied customers. Also, offer them early access programs, coupons, and strategy involvement schemes.

Customer input will help you to note down points and changes you want to make in an existing or an upcoming product. Furthermore, you can launch the same in a new or a second version. This way you will be able to provide a variety of products and services to your customers based purely on their recommendations and improvement suggestions.

Do a customer segmentation to understand and classify customer engagement in a better way. One group can consist of customers who are completely new to your business. Another group can consist of customers who have previously been involved in co-creating your product or service. The last group can have customers who are mixed, as in some are new to your product and service offerings while some are quite familiar with the same.

Once businesses offer their products in the market developed on the basis of customer inputs, the next step is to set up online forums. In these forums, customers can register online, upload product pictures, give feedback, and get in touch with other customers to give them a personal review of the product. Keep it transparent so that it gives enough flexibility to your customers. Firms can set up online surveys, use Co-Creation Methodologies, start community insights platforms, use innovation trackers, guessing games, and so on. Make sure to keep your customers connected and engaged with product development even after your product is launched in the market. If you do not do so, your customer might feel that they are not valued anymore.

Reap The Benefits Of The Customer Input Approach

Businesses should schedule businesses with their customers. Try scheduling 10 customer conversations for a starter. Even if some of them do not come up with the desired product betterment options, you will still end up making a stronger bond with them by just being present there with your customers.

Furthermore, the problem of one customer can be solved by other customers present in the meeting. This way it leads to the innovation for your product development teams as they are able to execute innovative inputs put in by the customers.

Also, remember that one meeting will not fetch you all the dates from customer inputs. Therefore, schedule multiple meetings to get the best of customer inputs. Try getting different sets of customers in every meeting. This way you will understand what different customer groups have to offer for the betterment of your product development. In case you’re not able to get customers onboard a meeting you can always schedule calls to take their valuable inputs. NeoDove is an AI-powered, end to end tech-enabled customer communication and reporting solution that allows you to actively engage with your customers. You can use the solution for taking feedbacks , informing customers about new features or even for conducting surveys all from the comfort of your home/ office.

Keep your customers updated on your product development so that they know that their valuable inputs are being put into action and the fact that your company strongly considers serving in their interest better than what their competitor is doing.




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