Competitiveness in technology-driven businesses is strongly dependent on the innovation they can bring. Successful innovation is crucial to guarantee a company’s survival. To efficiently develop new products or services, customer services are invaluable. However, companies indicate that this process can be organized differently and better. That’s why we have a research project, within Business Design & Innovation, that focuses on this: Project Valerie.
Etap Lighting was one of the businesses that participated in the project and has recently completed it. We talked with the officer of New Business Development, Chris van Bellegem, about the issues that let Etap Lighting to Valerie and the answers they have already found.
The Flemish lighting company Etap Lighting is an international player that carries out large scale lighting projects for business customers. True to their sustainability mission, they started a search for new ergonomic and energy-efficient lighting solutions based on the most recent scientific evolutions in the sector. “There is a whole scientific branch that studies the effects of lighting on people: human-centric lighting. We integrate those insights in our development process,” Chris says.
"Our product developers are continuously occupied with innovation, but we notice that the pricing of our new projects isn’t always logical.”
Chris’ function as innovator in the company is mainly focused on the design of a new earning model. “The focus is on finding areas in which we aren’t active yet. Our product developers are continuously occupied with innovation, but we notice that the pricing of our new projects isn’t always logical.” And that’s where Project Valerie comes in.
“We usually work with a cost-plus pricing and I can’t say that’s totally unusual, but there was a common belief we could do better,” Chris explains. Thanks to the project, a few innovation plans were spun. “First and foremost, we want a pricing that is independent of the production cost, is logical for our clients, and doesn’t follow a formula blindly.” When the selling price increases in proportion to the production cost, that doesn’t always respond to the clients’ expectations.
“First and foremost, we want a pricing that is independent of the production cost, is logical for our clients, and doesn’t follow a formula blindly.”
Etap Lighting learned to work with a price waterfall as a tool to limit the difference between their published price and the realized price and get a clear image of this difference. “You learn to map out certain mechanisms, which you don’t always pay attention to when calculating the selling price.” Furthermore, the insights of the everyday client contact were strengthened by insights in stakeholder mapping, personas, and qualitative interviews. “By working in a structured way, you can dig much deeper.”
Stakeholder mapping as an eyeopener
“In principle, there was communication between product development and the buyer, but there was no methodology behind it.” An unexpected windfall was, according to Chris, that working with those methods didn’t automatically mean a rigid academical regime should be implemented. Documentation happens in function of the development process, not the other way around. “You don’t need to overdo reports and statistics. The essence is that there is enough documentation for later reference and smooth communication.”
“Because we had prepared questions and had systemized the way of reporting, it suddenly became possible to compare conversations of different clients and formulate a decision.”
According to Chris, the qualitative interviews were an important step in the feedback process between client and company. “Because we had prepared questions and had systemized the way of reporting, it suddenly became possible to compare conversations of different clients and formulate a decision.” He regrets they couldn’t reach the set number of interviews. “The process is time-consuming, but a valuable source of insights. The integrations of stakeholder enquiries in the development process is high on Etap Lighting’s agenda.”
“For the people in product development, the project results were an eye opener; they can’t find the client willingness to pay for every innovation they think of.”
Above that, communication within the company has improved. People from various departments have priorities that are hard to reconcile. Salesmen are confronted daily with the price wars and want to stay competitive; product developers are interested in the attributes of their product. “For the people in product development, the project results were an eye opener; they can’t find the client willingness to pay for every innovation they think of. For the salesmen, this was an acknowledgment of their own experiences.”
Light As A Service
From product development, Etap Lighting closely follows the technological innovations in the sector, but that isn’t always self-evident in an industry where you create the demand yourself. "The market isn’t always ready for the very latest products. In the past, we have come up with a product that we found fantastic, but then failed miserably on the market." It is important to include the customers’ feedback efficiently in the production strategy. “That way, you have a product that has a selling market and a pricing that is marketable to everyone."
“The market isn’t always ready for the very latest products. In the past, we have come up with a product that we found fantastic, but then failed miserably on the market."
In concrete terms, Etap is now looking at services with their Light As A Service project. According to them, light as a service with an eye on sustainability through circular models and refurbishing is a potentially fruitful innovation in the sector. But first, of course, they must test the customer.