25TH AUGUST, 2020

How Customers Can Drive Your Business Innovation

Make your innovation relevant

When you’re busily designing and manufacturing creative new products and services, it’s easy to get carried away and forget your customers’ needs in the process. But customers are the lifeblood of your business, helping you decide what’s actually viable and what’s not. They are also an excellent tool for planning and executing your next innovative project.

The coronavirus COVID-19 has presented some enormous challenges for UK businesses, but also some excellent opportunities to innovate. In this article we look at how customers can help you drive innovative ideas at this challenging time.

First off, know exactly who your customers are

The fact is, it’s easy to waste hundreds or even thousands of pounds on a new product or service because you think it’s what your customers want. But you may not be right in your assumptions, which is why it’s so important to know exactly who your customers are that you’re trying to sell to.

When selling directly to individuals, carry out research to identify your customers' age, occupation, household income, gender and ethnicity for example. If you sell to other businesses, understand the size of their business, their goals, their location and the sector in which they operate. This will mean you can more accurately know which ones to target.

Get your customers engaged early

It’s well worth getting your customers involved where possible at the earliest stages of product development.

Firstly, you need to grab your customers’ attention. Secondly, you must work to understand their ‘reality’. If your customers simply can’t get on with your new product or service, or don’t feel it answers their particular needs, then you can use this feedback to make improvements as you go along. Thirdly, by getting your customers on board early you’re more likely to achieve the referrals you need to gain market traction. You’ll learn faster too, and get ahead of the market. Your early adopters will hopefully become your brand evangelists!

Know what your customers can spend

There’s no point in making a shiny new (rather expensive) product only to find it’s out of the economic reach of most of your customers.

Frankly, your time and money will be much better spent if you can match what you’re offering to what you know your customer can afford. Higher priced luxury or premium products are unlikely to be successful if the majority of your customers are on a limited budget. So keep in mind during your innovative projects that you need to match your products to the spending power of who is going to buy them.

Ask your customers what they think

This is again about getting customers engaged and also maintaining that engagement from design to marketing.

A good way to make your customers feel valued is in carrying out surveys - plus of course you’ll gain some valuable insights. But bear in mind you’re likely to get a mixture of responses, not all of which you’ll agree with! However, you must be prepared to act on the feedback, and make improvements. Don’t just treat surveys as advisory. And tell your customers what improvements you’ve made on the back of their suggestions too.

The beauty of a well-considered customer survey is that you will learn things about behaviour and buying habits particularly. If a customer is dissatisfied in some way this is also their chance to let you know. Unless you proactively consult your customers, you’ll never know for sure exactly what isn’t working out for them.

Don’t forget to keep consulting with them too, for example keep in touch with a customer contact programme. By harvesting the email addresses of previous customers, you can target any promotions, events or marketing activities towards them and further build your growth strategy.

Test your prototypes out on them

Got an amazing new recipe idea for your café or restaurant menu? Maybe you’ve designed some creative new sustainable packaging for your product? Whatever it is, most customers love to give their opinions (good and bad) so use them as your guinea pig (if it’s safe and practical to do so of course).

A good way of doing this is to offer freebie samples, or run a promotion. Get your brand out there with some effective local marketing on social media too - just make sure you continue to harness all that valuable feedback!

Got your innovative project up and running?

Did it involve a certain amount of scientific and/or technological research and development?

Then don’t forget to see if R&D Tax Credits can help with the costs.

R&D Tax Credits are highly lucrative - don’t miss out!

The R&D Tax Credits scheme was launched back in the early 2000s by the government. It’s essentially a tax incentive that encourages UK companies to innovate and grow, both to strengthen the local and national economy and to keep the country globally competitive.

In a nutshell, companies that have undertaken a project that makes an advance in science or technology, however small, may well be eligible. This could be by developing a new product, process or service or by enhancing an existing one.

The benefit is gained either as a cash lump sum (if the company made a loss) or as a reduction in Corporation Tax for those in profit.

Claimable costs include certain overheads and software used up in the R&D process, as well as staff wages, employer costs and more. Claims can easily run into thousands of pounds too, and any UK company in any sector can apply (we’re not just talking techie companies and scientists in lab coats here!)

Find out more about the scheme and how to apply on our R&D Tax Credits page, plus see our recent blog on the 8 Common Mistakes Companies Make When Claiming R&D Tax Credits. And when you’re ready to make your claim, don’t forget to use our great value Tax Cloud portal to expertly guide you through the process. Plus, our R&D tax experts are on hand every step of the way.

Simply call us on 0207 360 4437 or send us a message.

Barrie Dowsett, ACMA, GCMA
Author Barrie Dowsett, ACMA, GCMA CEO, Tax Cloud
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Meet some of the team behind Tax Cloud

Barrie Dowsett Barrie Dowsett ACMA CGMA Chief Executive Officer
Jillian Chambers Jillian Chambers Technical Analyst/Writer
Lauren Olson Lauren Olson Technical Analyst Manager
Rabia Mohammad Rabia Mohammad Corporate Tax Associate