"If you're not serving the customer, you better be serving someone who is." - Karl Albrecht

In the world of innovation management and new product development, there is a lot of ongoing discussion on how to discover what the customer needs, wants, will pay for, will follow along like lemmings, etc. 

Many times, the discussion starts with "Voice of the Customer" or VOC, which honestly has many definitions, but here is a common one from Wikipedia...

Voice of the Customer describes the process of capturing a customer's requirements. Specifically, the Voice of the Customer is a market research technique that produces a detailed set of customer wants and needs, organized into a hierarchical structure, and then prioritized in terms of relative importance and satisfaction with current alternatives. Voice of the Customer studies typically consist of both qualitative and quantitative research steps. They are generally conducted at the start of any new product, process, or service design initiative in order to better understand the customer’s wants and needs, and as the key input for new product definition, Quality Function Deployment (QFD), and the setting of detailed design specifications.

In general, there are a number of weaknesses with this approach as it relates to new product development and innovation management.  This is because customers are very poor at envisioning the future.  They are more interested in getting their hands on improvements and upgrades to things they know already work.  They cannot see the things they "may" want in the future. Stuff like cars...when horse and buggies worked fine.  Stuff like iPods...when the portable CD player worked fine.  Stuff like text messaging...when the cell phone worked fine.  If what you are looking to get are incremental improvements, this is a great tool.

Another way to look at discovering the needs and wants of a customer is something called "Customer Ethnography" which is defined as:

Ethnographic studies are usually holistic, founded on the idea that humans are best understood in the fullest possible context, including: the place where they live, the improvements they've made to that place, how they are making a living and providing food, housing, energy and water for themselves, what their marriage customs are, what language(s) they speak and so on.  One of the most common methods for collecting data in an ethnographic study is direct, first-hand observation of daily participation. This can include participant observation.  (Wikipedia)

Ethnographic studies are very useful for discovering what the customer currently struggles with, desires to have, has already developed work-arounds for, etc.  This leads to new insights in what "job the customer wants done" and will hopefully pay for to get done.  For example, watching customers struggle with with messy brooms and dust pans led to the development of Proctor & Gamble's Swiffer product.  There was no existing customer demand, or pull, for this product.  But it solved a customer's "job to be done" of efficient cleaning.

Yet another method of using customers in your innovation research is the usage of "Focus Groups," which are defined as:

A form of qualitative research in which a group of people are asked about their attitude towards a product, service, concept, advertisement, idea, or packaging. Questions are asked in an interactive group setting where participants are free to talk with other group members.  Focus groups allow companies wishing to develop, package, name, or test market a new product, to discuss, view, and/or test the new product before it is made available to the public. This can provide invaluable information about the potential market acceptance of the product. (Wikipedia)

Focus groups are typically used once an idea has already been prototyped.  Outcomes from the focus group then drive additional changes, ideas, new directions, etc.  Results of focus groups are very subjective.  Skilled focus group leaders and facilitators are required to reduce the common pitfalls associated with focus groups.  Despite these ominous warnings, focus group sessions are a very valuable tool in the product development lifecycle and for innovation management in general.

The last method we will look at in our search for finding out what the customer will buy, is to just put the product in their hands.  It is called "push innovation":

Push Innovation occurs when a new invention, technology, process is pushed through R&D, production and sales functions onto the market without proper consideration of whether or not it satisfies a user need. (Wikipedia)

Push innovation happens when new technology is discovered and developed into a new product or service regardless of customer demand.  Great examples are iPod/iTunes and Facebook.  Advances in technology, business models and services made those innovation success stories happen.  It was pushed into customer's hands and the customer quickly embraced them.  Many, many other products are pushed into customer hands that are just as quickly dropped or ignored.

In the end, and by definition, innovation happens when a new idea delivers a value for which someone is willing to pay.  Sometimes that "someone" knows what they will pay for and therefore, will pull it out of organizations that produce products/services.  Sometimes that "someone" has ideas around changes, improvements and extensions.  Sometimes that "someone" needs to have it "pushed" or handed to them in order to discover the value.

Remember...without a product or service that provides value, you have no customer...and if you have no customer, you have no business!