Have you ever thought about how banking has evolved over the past 20 years? The other day, as I maneuvered my car past the drive-up ATM, I was telling my kids about the way things used to be. Like when I had to plan ahead and make sure I got to the bank by 3 on Friday to deposit my paycheck and get spending money for the weekend. Or how I had to buy travelers checks so I didn't risk losing a wad of cash while on vacation. Or when I actually had to hand-write checks, one at a time, then stuff, seal, stamp, and mail the envelopes to pay my bills. My kids, not surprisingly, found this description of how banking used to be rather quaint. With access to ATMs, direct deposit, online banking, and debit cards, they'll never experience the ties that used to bind you and me to physical banks with limited hours. Whether your bank has thousands of branches or a single location down on the corner, it no doubt understands that staying relevant to consumers' changing needs is critical in our fast-paced, competitive economy. Staying with the TimesMaintaining relevance is essential in every industry, not just financial services. As long as competition thrives and technology continues its relentless march forward, companies that don't evolve are destined for extinction. The good news is that innovation doesn't always have to be radical. In fact, a steady stream of minor enhancements to a product, service, or experience can help a company maintain relevance quite nicely. Innovation is like investing—small gains over time compound to deliver longstanding benefits. Apple (AAPL) is a company that knows how to stay relevant. Just about every time I visit the App Store, I find updates to several of my iPhone applications. Some correct little frustrations I've been experiencing, while others add helpful features or simply make a good user experience better. These minor innovations come with such frequency that I've become convinced that any little bug that annoys me today will soon be addressed. That gives me confidence that Apple is committed to keeping the iPhone relevant to my needs. As a result, it keeps me a loyal Apple customer. Of course, most companies don't have the resources to invest in innovation that big banks or leading computer companies do. But a strategy of staying relevant doesn't necessarily require significant time or money. You just have to know where to focus. Start With the WhoAny discussion of relevance presupposes an audience to whom relevance is required. For most companies, that audience comprises your most loyal customers. Not only do you have a relationshihp with them, it's a lot cheaper to keep them on board than it is to win new ones. In addition, the more relevant you become to your best customers, the more likely you are to attract people like them. And since you already are familiar with your customers, you have a good opportunity to understand their evolving needs. And understanding is what you'll need. There's a difference between knowing facts about your customers (names, Zip Codes, annual household income, purchase history, etc.), and truly knowing them. Step 1 in a continuous innovation program is to put in place an ongoing consumer discovery process. Get to know your customers as well as you possibly can—not just what makes them happy, but also their frustrations and disappointments. Ask them what hassles and inconveniences surround the occasions when they do business with you. Find out what alternative solutions they may consider, what substitutes they sometimes choose, and what they do (and why) before and after they transact business with you. You can gather this insight through formal research methods or by informally observing, listening to, and having conversations with your customers. Ideally, you'll do all of it on a continual basis. While they may take the initiative to suggest product or service enhancements, you can't depend on customer ideas alone to keep your company relevant. After all, they aren't likely to have a sense of the newest developments within your industry or understand the technical details behind what's possible. Nor are they likely to care as much as you do about the health of your company. Very few products or services are irreplaceable, and your customers have a lot more important things to worry about. What Are the Pain Points?As you study your customers, look for things that aren't working for them. The better you understand the pain points within and around your industry, the better you can enhance your brand's relevance. Run-flat tires reduce the inconvenience (and danger) people feel when they run over a nail. Satellite radio eliminates the annoyance of static on lonely interstate highways. The Egg McMuffin lessens the hassle of eating in the car. Even minor enhancements can have a major impact on customer satisfaction, from a curved shower rod (who would have thought you could keep that clingy curtain at bay) to a Web form that remembers personal data (key in my address? again?) to a simple apple slicer (great for you and me, even if it's not so good for Band-Aid). Once you have a solid list of pain points, brainstorm about how you might relieve them. This is where understanding the changing lifestyles of your target is vital, as it gives you a sense of what they'll be wanting/needing/expecting down the road. Some new ideas may require a costly and significant overhaul of the way you do business, while others will only require a simple process change, ordering option, or service enhancement. Over time you'll probably implement a variety of ideas encompassing all of the above. Need a head start? Try imagining solutions from the perspective of well-known, well-respected brands. For each pain point, ask: "How would Nordstrom (JWN) overcome this problem if they were in our business?" "How would Southwest Airlines (LUV) approach this challenge?" "What would the Marines Corps do about this issue?" Nike (NKE), Ritz-Carlton, Harley-Davidson (HOG), the Mayo Clinic—you can drop any number of companies into this equation that will cause you to consider different ways of relieving the pain. Many of your ideas won't be practical (and some may not even be possible), but the exercise will open your mind to creative solutions. Regardless of how you go about innovating, make sure you're continually pursuing the next thing, because a company's commitment to staying relevant must never cease. As you consistently address your customers' evolving expectations and overcome the things that frustrate them, improvements that by themselves may only be measured in inches will move your company miles from where it is today. That's where your customers will be. As long as you're there to meet them, they're likely to stick around.