George S. Day and Christine Moorman

Intuit’s Death and Resurrection

Saturday Jan 29, 2011

I hope it’s clear by now that I think deep market insights fuel an outside-in approach to strategy. Generating and leveraging such insights puts the firm’s strategic focus on the customer, and because it is difficult for competitors to imitate, a market insights capability provides a basis for a durable competitive advantage. Like all capabilities, however, a market insights capability is vulnerable to a common problem—the focus shifts from linking the company to the customer through the capability to building the capability itself (including making it more cost-effective, building customer databases, adding features, or training people to do insights work) or to other priorities such as covering short-term costs. The goal—staying close to the customer—gets lost or submerged under these other agenda items.

Let’s look at Intuit—a textbook case on this point. Providing superior relational value to customers through “customer listening” earned Intuit the dominant share of the personal financial management, small business accounting, and tax preparation markets. Intuit began in a California basement in 1983 and by May 2000 its products dominated the retail market—Quicken had an 84 percent share, QuickBooks an 87 percent share, and TurboTax a 60 percent share—and controlled 83 percent of the online market!

However, at some point, Intuit turned inward and lost some of its legendary fixation on customer input. As a result, Intuit’s loyal customer base began to look elsewhere. Growth for the standard Quicken product flattened, and the company became vulnerable to attacks from venerable competitors, including H&R Block’s TaxCut and new web-based services like mint.com, that were easier to use and provided valued features, such as storage, and better customer support. Intuit had stopped listening to its customers and the decision had taken a toll.

But then company founder Scott Cook and his team developed a formal strategy to get Intuit back on track. To begin, Intuit turned its attention to its flagship product, Quicken, rescuing it from a marketing-driven, feature-adding rut and reorienting it to focus on customer needs. Peter Karpas, the new unit manager, reminded his staff: ”Your job isn’t to make marketing’s life easy. Your job is to find unmet needs we can solve well.” In response to the charge to find and solve customers’ unmet needs, the Quicken team developed a portfolio of products tailored to specific customer needs, such as medical bill management and investment property management, rather than trying to make one software package to handle every situation. The transition to a portfolio of specific and separate product offerings and the improved usability of the standard Quicken were the result of Intuit’s renewed focus on identifying and understanding customer needs.

Next, Cook acknowledged the need to bring a 20th century product into the 21st century by acquiring Mint.com, a company recognized by Money magazine for its leadership in online budgeting. Furthermore, Cook put Mint’s founder in charge of Quicken and Quicken.com to bring fresh thinking to those products. At the end of 2010, Intuit took customer engagement a step further and launched intuitcollaboratory.com, a formal channel to invite, acknowledge, and integrate customer collaboration into its products.

Intuit is listening again. Are you? Is your market insights capability serving your customers or serving your firm?

http://query.nytimes.com/gst/fullpage.html?res=9F04EFDD1030F932A05751C1A9639C8B63&sec=&spon=&pagewanted=all

http://www.inc.com/nadine-heintz/intuits-new-collaboration-initiative.html

2 Comments »

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November 16th, 2011 | 5:04 am
Christine Moorman:

Thanks for the compliment Prezent. I think the other case studies we examine on the site should also be useful to you.

November 16th, 2011 | 9:10 pm
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