[EDITOR’S NOTE: I fully acknowledge from the start that this really has nothing to do with collections. But I have been sitting on this for a little while and I thought it was worth sharing, especially in the wake of all the great discussions at ARMTech last week.]
A major insight from recent research suggests that users — not just companies and technical experts — are behind some of the most groundbreaking innovations. From the invention of email to mountain biking and modern tech platforms, users have been solving their own problems and, in the process, disrupting entire industries. The credit and collection industry is undergoing a technological revolution and companies may feel like they are passengers on this ride, but that is definitely not the case. Especially if they are asking the right questions to the right people and listening to what those people say.
Why it matters: Professionals in credit, collections, and financial services are always on the lookout for new products and services that can stay a step ahead of shifting client demands. However, many organizations focus solely on their in-house R&D teams or partner firms for breakthrough ideas. This latest research shows that user insights — from customers or even your own employees — can be a powerful force for innovation.
Driving the news
- In 1971, engineer Ray Tomlinson turned an obscure @ symbol into a revolution by creating a system for sending messages between computers on the ARPANET network. Email, now a cornerstone of modern communication, was born from a user looking to solve a practical problem.
- A study in the Journal of Product Innovation Management (see below for link) analyzed 60 disruptive innovations (including LASIK surgery and electric power tools). Close to half were devised by users driven to fix a pain point.
- Airbnb, the telephone, and even the dishwasher were all spawned by user-innovators who saw a gap and filled it.
What they found
- When customer needs are changing fast, products with radically new functionalities often come from users rather than established producers.
- On the flip side, during periods of rapid technological change, producers with specialized technical knowledge typically lead the charge.
- Both forms of disruption can upend markets, meaning neither user innovators nor producer innovators should be underestimated.
Between the lines: Organizations tend to think of user feedback as minor tweaks to existing products. But users can generate truly game-changing ideas. Especially in times of flux, user-driven innovation can reveal entirely new product categories and markets.
What’s next
- Cultivate a culture of open innovation by soliciting user feedback and complaints, both online and offline.
- Seek out lead users who are ahead of emerging trends, but stay mindful that niche user needs don’t always translate directly to mass markets.
- Consider co-creation: contests, hackathons, or pilot programs that invite customers to collaborate on the next disruptive solution.
The bottom line: Don’t overlook the users in your quest to stand out in the credit and collection space (or any industry). By tapping into their “need knowledge,” companies can combine it with their own “solution knowledge” to transform complaints and unmet needs into disruptive, next-generation offerings.
