More Growth - consumer insight, brand positioning, growth strategy

How are consumers reacting to the downturn?

We know that "things are going to be tough" this year and maybe "even tougher" next year.  What should we do about it?  Opinions seem to range from predictions of doom to a rather cosy feeling that maybe we will see it through and it will not be so bad.

In this post we try to apply the principles of the Growth Game to analyse the situation.  Analysis "Growth Game" style adheres to three principles.

Stop worrying about the future, but do beware of the Black Swan (see blog entry).  Avoid expert predictions of what will happen and instead concentrate on strengthening your ability to compete and the withstand future unexpected shocks.

Actively seek and acquire empirical evidence to understand what is actually happening.  Again try and avoid the expert opinions.  They tend to offer qualitative observations and are tempted to make predictions.  Instead concentrate on evidence of things that are actually changing.  In particular look to gain insights about things that directly affect your business.   

Avoid "interesting" and focus on "actionable" insights.  That means start with the decisions you need to take and then go after the insights that will help you make them. 

We have been reviewing some evidence, observations and opinion about how consumers and customers will react to higher prices and lower disposable incomes.  I have grouped them into expert opinions, hard empirical evidence, insights and conclusions.

Example predictions/observations from experts

• The cumulative effect of numerous cost increases has now reached a tipping point.  Consumers are really starting to feel more vulnerable and this has become more pronounced in the past 6 weeks.
• With pressure on personal finances people will be less willing to pay a premium for "nice to have" things like more local food and food provenance; sustainable foods, organic and fair trade.
• There will be a back to basics trend, grow your own food, more family cooking, use basic ingredients rather than ready meals and less willingness to pay for convenience.
• Under financial and moral pressure consumers will find ways to reduce food waste (30% of food bought currently ends up thrown away).
• People will switch more of their shopping to discount outlets and local shops reducing both prices and transport costs.
• People will eat out less and consumers will switch to more take outs
• Concern over climate change will affect what people buy.

A lot of these statements make sense and some may well happen, but remember they are either subjective or a prediction.  Remember that experts may well understand what is going on but their predictions are usually unreliable.  Take a look at our Black Swan blog post to see the potential pitfalls of listening to expert predictions.  We recommend you look at the empirical evidence and come to your own view about how this will affect your business.

Empirical evidence of what is actually happening now (data to May 2008)

• The polarisation of markets continues whereby the strongest growth is happening at the top and bottom of markets.  The highest growth rates are in premium added value and low price segments whilst the middle gets squeezed.
• In Grocery the strongest growth % rates are in discounter stores (Lidl, Netto) and internet grocery deliveries.  The biggest absolute cash growth is happening in megastores situated out of town.  However, this is not a feature of the downturn.  These trends are long term and have not yet changed in 2008.
• What has changed in the downturn is lower sales in eating out, clothing, household appliances and furniture.  Other sectors including holidays remain resilient.
• OL share of total grocery has not increased for 5 years and as yet there is no sustained trend for own label to increase its share.
• The % of volume that is offered on promotion has gone up sharply and this is more about multi-buys than price reductions except in Tesco who focus more on price reductions
• In 2008 consumers are making fewer big shopping trips, shoppers spend per basket is down and there is less promiscuity between retailers.
• Consumers are claiming to be influenced more by a number of ethical issues, CSR, environment, fair trade, food provenance etc.  Anecdotal evidence of sales growth in products with these claims suggests this is true.

What insights can we translate from this (whilst avoiding predictions)

• Consumers are under financial pressure and are adjusting spending behaviour, but they are choosing carefully where to make the changes.  Indulgences and treats remain important, but consumers selecting which ones matter most (quality food and holidays seem to be doing well).
• The fundamentals of what consumers want (the power drivers of choice) remain the same in slowdown or boom.  The mega trends of health, convenience, naturalness/food provenance and ethical concerns remain in force and continue to be the main sources of growth in markets.
• There is no sign of a flight from quality.  There is some smart shopping to get and be able to afford the quality (promotions, discounters, local sourcing).

Translating insights into action

Reducing waste is an insight that could offer opportunities.  We know consumers are making more frequent shopping trips.  This could correlate with reducing wasted food.   The other area of waste that is an environmental issue is packaging.  May be helping consumers reduce waste could offer opportunities for innovation.

Nielsen recently quoted a survey stating that the top 20 innovations have all been about packaging, format and convenience.  As marketers are we smart enough to come up with packaging formats that reduce waste and have less environmental impact whilst still delivering the merchandising impact and consumer convenience?  It must be worth a try.

The Growth Game takes these guiding principles of getting and translating insights into the practical steps for growth. The process rests on empirical observations and measurement and is all about engaging the business team to create practical and credible ideas.  To find out more take a look here

Boris v Ken - what can we learn about how customers make choices?

Using your existing data?

  How can you discover the Power Attributes that determine why consumers choose your brand without doing new and expensive surveys?  Our answer is that you can and should take a stab at it.  Whilst doing new research will be more robust, you can understand valuable insights about your Power Attributes by analysing whatever data or insight you already have or can easily gather.  This ezine shows you an example of how to do this.  We have analysed the result of the London Mayoral election to illustrate how this can work.

Analysis of Boris victory?

Voters' and customers' choices can seem a bit odd. So how come the electorate plumped for Boris, who had been seen as a bit a bit of a joke and prone to gaffs and offered an uncertain prospect of being competent?  We have analysed the Power Attributes to understand how voters made this choice.   

It is possible to take a good stab at understanding the Power Attributes using available published data.  In this case we have located two very different pre election polls to help us work out the Power Attributes.

Conquest's Metaphorix Poll for ITV London
IPSOS Mori poll for Unison

Power Attributes must possess both importance and uniqueness. So Power Attributes for the candidates are ones that are both important to voters and in some degree are unique to the candidate.  Attributes will have both functional and emotional elements and both will influence the customers decision to purchase.  In this case of this election functional really means policy issues and emotional attributes relate to the candidate's personality.  We started by looking at policy attributes.  MORI revealed the ranking of importance of the policy issues.

Importance ranking to voters

1. Crime/Policing
2. Transport
3. Healthcare/NHS
4. Cost of living
5. Education
6. Pollution/environment

It was difficult for the candidates to get uniqueness on these issues - even though the candidates were able to offer some differences in their policies.  Ken had a good track record on transport.  Brian Paddick had been a policeman.  Boris talked a lot about crime reduction. When you look beyond crime and transport, the next three issues lay completely outside the control of the Mayor (NHS, Cost of living, Education).

The personalities of the candidates offered much more scope for uniqueness

So personality attributes may offer more scope for real power. When we look for clues about these more emotional attributes, the metaphorix survey done by Conquest for ITV London was able to highlight the emotional beliefs about the personalities of the candidates.  If we start by looking at the importance of the different personality attributes, we discover that the most important attribute is

Trustworthy

However none of the candidates possessed this to any adequate or differential degree.  So despite trustworthy being important as an attribute, it lacked power as a means to choose between the candidates.  So we need to look further to find attributes that are powerful for each candidate.  Conquest discovered there were some attributes where the candidates differed.

 

Ken	Boris	Brian
arrogant	refreshing	boring
confident	confident	focused
capable	approachable	honest

We can eliminate confident as this did not distinguish Ken or Boris and also knock out boring as this is not a positive.  The remaining attributes provide the clues as to why Boris won. 

Boris won the day by being approachable and refreshing. Ken's lead on capable was outdone by Londoners' desire for a change. For Brian Paddick, being focused and honest was just not important enough to Londoners.

Power Attributes for London Mayor

The Power Attributes for this London Mayoral election were to offer a change from a tired and slightly arrogant incumbent and promise to address violent crime alongside transport issues.

No doubt the national issues of healthcare, cost of living and education played a part.  Ken would have suffered by his association with a struggling Labour government.   But since these issues remain outside the direct control of the Mayor and were difficult for the any candidates to discuss.

For an attribute to be powerful you must be able to create some uniqueness. The most powerful attributes were those where the candidates could establish some uniqueness.  It is the combination of an attribute being both important and unique, that creates the power to influence voters or consumers choices.

 

How do you know what is important to customers?

Why is it that once we walk through the door of the business each day we are programmed to want customers to believe that what we are doing is the answer to their problems and that the features and benefits of our products will be important and useful to them.  Suddenly the world seems to be centred around the products and brands that we sell.

Somehow the corporate mission or our own ambition can blind us to insights we acquire every day.   As we spend our home and shopping lives being customers and making choices between products we can develop a good understanding of what it means to be a customer.  We can understand what is important and how trivial or important different decisions are to us.

I have been reading Nassim Nicholas Taleb's book, The Black Swan,

The Black Swan: The Impact of the Highly Improbable

See our discussion  click here   

He has been reminding me how easily we can get persuaded by the "narrative" explanations that exist within the business.  How easily we tend to seek confirmation of what we would like to believe in the anecdotes and events around us.  How difficult and more challenging it is to rigorously assess the evidence. 

How do you deal with this?

As a successful business person you know you must cut through this and you should understand what is important to your customers.   

But how much time and money do you devote specifically to find out what is really important to customers so you can act on it?   And if you do spend time on it, what is the best way to discover what is important to our customers?

But you may be thinking that you already know what is important to customers.  Why should you invest more money and time in finding out what is important to customers.  Just stay with us for 2 more minutes reading this ezine and we will give you the chance to assess whether you have done enough.

What we have found

We have frequently observed in project after project and study after study is that successful business people do know a lot about what is important to their customers.  Especially sales people who are talking regularly with customers and marketers who choose to spend time listening to consumers.

We have noticed that the managers in the business tend to get it 80% to 90% right.  Which sounds great.  And would that we could get everything 80-90% right!  But the problem is the thing you miss out or get wrong is often the important attribute feature or benefit that could make all the difference.

Here are some examples from our own studies

Examples where managers think something is important but consumers think is less important than other things

Healthy snacks - less than 3% fat, not embarrassing to eat in public
Gardening - used by professionals, use less peat
Reinsurance - can offer independent advice, harnesses innovation.

Examples where consumers think something is important but managers did not spot it

Healthy Snacks - is a satisfying eat
Gardening - Is attractive to wild life, forgives me if I forget to water it.
Reinsurance - Flexible to my needs, fixes problems rapidly

How can you know what is important to customers?

Inevitably the most straightforward answer is to ask them and we would be the first to say that asking them in any form is better than not asking them.  But there are a few pointers that we have learned.

• We have found the concept of an attribute is valuable to help distinguish what is more important or less important
• Don't get too tangled up in whether the attribute is a feature a benefit an emotion or an image, it does not matter.  What matters is which attributes are important
• Ask the customers/consumers to help you prepare your list of attributes.  They will often come up with some attributes that you did not think of.
• A third party conversation is more likely to reveal the truth, if you have a relationship with your customers, this can get in the way of a truly transparent conversation.  On line or paper survey tools can also do this very well
• Plan the approach so you do not lead them to give you the answer you want to hear.
• Ranking attributes from 1-10 or 1-20 is more revealing than asking for a score on a scale where 1 is not important and 5 is very important.

Attribute importance is a fundamentally important part of helping our clients understand how customers make choices between brands.  The really useful concept of Power Attributes is based around what is important to customers and how you can differentiate yourself to them.

You can download our paper on this click here

You can see our website discussion on this click here

You can see our case study examples click here

You can see our blog posts on Power Attributes click here

Why you should worry less about the future?

I was listening to this fascinating discussion on Start the Week on BBC Radio 4 on Monday

We are hard-wired not to truly estimate risk, too vulnerable to the impulse to simplify, narrate and categorize – and we don’t even realise it. What we should understand, argues the academic and city trader NASSIM NICHOLAS TALEB, is that our world is dominated by 'black swans', highly improbable events that have a massive impact and are nearly impossible to predict. Black swans, he says, mean we should ignore ‘experts’, stop reading newspapers and learn to take advantage of uncertainty. Nassim Nicholas Taleb will be delivering lectures on The Black Swan at the University of Oxford on Wednesday 5 March and at the London School of Economics on Thursday 6 March. The Black Swan: The Impact of the Highly Improbable is published by Penguin.

Here is the podcast link  Nassim is in the last 15 minutes

I got 5 points from the discussion

• What actually happens is often not possible to predict
• Measuring (empirical?) what is happening is more useful
• Projecting current trends is more reliable than expert predictions
• Our assessment of the risks we take will be wrong.
• Newspapers, colleagues and experts often try to convince us we can predict and manage risk.

It got me thinking, so what does this mean for businesses in pursuit of more growth? 

You should spend less time worrying less about the future.  So reduce the time you spend

• Worrying about things you cannot control
• Forecasting future events (since we will be wrong)
  
• Predicting competitor reaction
• Reacting to the latest hot topic in the marketing press

You should spend more time strengthening your ability to withstand unexpected shocks. To do this, measure what is actually happening to the business and assume it will continue until you create change by doing these things

• Discover your customers frustrations and unmet needs
• Know and measure what is important to customers
• Discover how to make this more available to customers
• Take action based on these insights and measure the results

You can do a simple audit to see where the balance of your time is spent.  Is it more on worrying about the future or could you do more to strengthen your competitive ability.

Corporate teams can easily get sucked into worrying about the future, whereas entrepreneurs tend to focus on things they can do now.

In the meantime.  I am off to the LSE on Thursday to gain some more insight into how we can strengthen our approach to helping you translate insights about customers into practical steps that will create more growth.

If you would like a free telephone audit to discover if you are worrying about the future too much or are doing enough to get on with the present, then email us or phone us on 020 8334 7202 to arrange it.

P. S.  This is exactly what Power Categories and Power Attributes and Power Channels will help you achieve this action orientation and address the business fundamentals.  The approach is about translating insights about customers into practical steps that will strengthen your competitive position in the market.

Do you promote what you do well or what matters to customers?

If you want to discover the Power Attributes that drive your customers to choose your brand rather than the competition, you have to have start by generating a list of possible attributes.  When we help clients do this, we get the initial attribute list from talking to the customers.  You can only really rely on customers to think like customers.    However, the business team can think of attributes that customers cannot even begin to imagine, so we also get some valuable attribute ideas from the client management team.

We do this through our facilitated workshop approach.  These workshop events often attract a senior audience.   When we work with these knowledgeable and experienced managers we often find that the list of attributes is a list of features or things that the company does well.   But that is not always what we need.  We know that what will be powerful for the customer is a specific benefit or a special way the business helps the customer solve a problem. 

So for example the director of a financial services firm tells us that what really matters to the customers is "we give independent advice",  which we translate  into a more customer focused benefit "has independent advice I can trust", but when we talk to the customers, this is still not good enough, the most powerful attribute turns out to be "makes my business more successful" .

Time after time, we discover that the hot power attributes are all about the customer and the cold attributes are all about the business and the brand.

Experience this week brought this home to me and showed that directors may not always be the best choice when we are generating potential insights about what matters to customers.

In one of our current projects we are trying to discover some Power Attributes in a whole new category for the business.  We ran a workshop this week where we wanted to generate a list of candidate attributes that we plan to investigate with customers.  The investigation and consumer research will establish which attributes are most powerful in influencing customers to choose a product. 

The project is being led by the sales director who helped us bring a fresh approach. Rather than directors, he invited a number of the PA's and front line team to the session and this proved to be an inspired choice.  They seemed to think more like customers and in a more natural way.  As a result, we have come up with a list I am confident is much closer to what customers will suggest.  This means when we do workshops with the customers we are already part of the way there and we will be able to spend time discovering why the attributes are powerful rather than just generating the list.

Our ezine always aims to deliver practical advice, so I would suggest you can take two things out of this When you are thinking about what is important to your customers,

1.    always challenge yourself to think "is this about the brand or about the customer"  I can pretty much guarantee that if it is about the brand it will not be that important to the customer.
2.    go and ask some customers or at least a few "real" people around the office, they might just shed some insight on your thinking.

Our Power Attributes paper discusses how you can come up with this insight in more detail click here

Is your growth constrained by a lack of resources or a lack of action?

Last post we discussed marketing influence across the whole business.  But according to some commentators, there might be a recession soon.  Does this mean marketers influence will decline even further.  You may have less money to spend and fewer resources.  It will put pressure on costs as growth gets more difficult.

So should you react in a different way as a result.  This week we show how "internal entrepreneurs" get growth.  This is the same whether the market is growing rapidly or stagnant.

The first thing is to focus on action; doing things rather than analysis, research and meetings.  I was reminded of this when reading Tom Peters blog and saw this quote.

Any project worth doing is worth doing because in some small or large way it challenges "the way we do things around here." Moreover, it is a given that bosses are primarily hired to be cops who make sure that we do things "the way we do things around here."

This dilemma is often resolved by a select band of individuals who drive for practical steps that will create growth.  These team members refuse to accept the processes, always find ways around the restrictions and "kick down doors" to make things happen.

This select band are the internal entrepreneurs.  They will work with limited resources.  Internal entrepreneurs push their ideas with conviction and energy.  They also recognize that they must win people over and cannot achieve their goals by just pushing their ideas.  However they are willing to push back and are not put off by objections and obstacles.  We have noticed they can exist at many levels of the organization.  This is not just a feature of senior management.  What are their behaviours?

We recently worked with someone in a 7m business who used this "internal entrepreneur" approach and it has worked, two years later this is now a 12m business.  They also operated with some of the constraints of a larger business since the business is owned by a multi billion global business.  But they did not have access to additional finance from this larger business.  The resources available to them were only those generated by the revenues of this 7m subsidiary. 

Here are our practical tips based on the behaviours we have observed in this case and others.

• Identify the five top drivers of growth on the business and ensuring the whole team understands them.   
• Translate the 5 drivers into practical actions and review them every month
• Refuse to accept that it is OK to miss objectives due to a need to adhere to process.  When obstacles arise, the question is how do you get around this?  What else could we do?
• Develop a great enthusiasm for celebrating successes.  Make the office area full of boards with updates on progress, pictures of successes, statements of intent and performance vs. targets.
• Evaluate all activities using three simple questions, what works, what does not work, what could we do better?  (Always start with the positive
• Always talk about the customer and understand the customer needs.  Underpin decisions by robust insight.  All ideas were tested with customers.  This can involve very low cost market research tools that the team created and managed themselves.
• Be clear about the working environment you want and the type of people this required.  Ensure all new recruits are interviewed and tested against this profile.

So if you are the boss, make sure you have some internal entrepreneurs in the team. If you are the team, try being an internal entrepreneur

If you want your team to understand how to do this look at  our programmes on  increasing marketing influence  (you can also read our papers on this.

Differentiate supports internal entrepreneurs with The Growth Game which is an approach that works to translate insights into practical steps for growth that have the support of the business team.   Our best clients are often "internal entrepreneurs; they know a lot of this stuff intuitively and use our approach to not only develop their ideas but to sell them to the business teams.

If any of you have experiences that relate to this, please let us know, either by private email or post comments under this article

Does your team ever struggle to win support for their plans?

The subject of marketing influence and effectiveness has hit the marketing press again.  Deloittes have done a global survey and Marketing published the findings last week.   It is a great survey based on authoritative opinions of 217 C level executives mainly CEOs, CMOs, and CFOs.

 

This reminded me that 10 years ago we published two papers in co-operation with The Marketing Forum.  These were based on survey findings from over 500 senior executives across all the business functions.  One paper was about marketing influence and the other about the future of marketing as a business function.

 

Get our papers click here

 

Some things have changed reading both 1998 and the 2008 papers I noticed that Marketing is now more central to strategy for the CEO.

Now 81% of CEO's see marketing as a key driver of growth  "the chief executive is much more open to talking about marketing these days"  CMO 2008

However what has not changed is that marketing teams remain detached from the rest of the business and often do not own the customer agenda within the business.

In 2008 - 77% of C-level respondents believe their employees do not fully appreciate the value of marketing  "I worry that I am seen as too specialised compared with my peers in other functions"  CMO 2008

In 1998 we found marketers do not communicate well with the rest of the business and are often seen as specialists who spend a lot of time talking to each other and their agencies but not enough time engaging with their own business.   Our report identified three characteristics of typical marketers that help to explain this

1. Marketers lack breadth and are conspicuously more loyal to their own professional development rather than broadening their career within the company
2. Marketers tend to be highly creative and analytical.  These strengths quite often go with weaker people and team player skills
3. Colleagues in other functions have much better people and influencing skills and this helps them exert more influence within the business.

Our conclusion in 1998 was 

The marketing profession was optimistic about its future.  The rest of the business wants it to succeed.  The role of marketing is to champion the cause of the customer throughout the business and ensure the business meets the needs of the customer in a profitable manner.  In many ways marketers are well equipped to do this.  The have the respect of the business for their creativity, intelligence, technical skills, energy and drive.

BUT

Marketing teams must develop new skills and operate in some different ways if they are to deliver this role in an effective manner.  It is essential that marketing earns the respect of the business so that the whole business becomes market led.  The key to this would seem to lie in new communication skills and having robust tools for identifying opportunities, analysis and measurement.  Without this the creative brilliance and smart analysis will lose its impact.

Since then, we have found that marketing teams who do spend more time working cross functionally and engage the whole business in their plans end up with much greater influence, are more highly regarded and create stronger top line growth.

This insight shaped the development of the Growth Game.  Our whole approach is  designed to overcome these issues 

 

Get the Marketing influence report click here

It is also instructive to examine Deloittes conclusions in 2008

• There is often a misalignment about the role of marketing amongst board members
• CEOs must help the CMO to align the organisation around growth
• The role of marketing is often misunderstood
• Marketers need to broaden their commercial skills to play an increasingly strategic role in organisations
• The focus on marketing measures is intensifying

Access to Deloittes report click here

If you recognise any of this, then take a look at our marketing influence programme.  This works with the marketing team and includes a 360 degree department feedback.  This programme encourages the team to think about why they should view the rest of the business as their customers, how this will help them achieve their goals, where they need to improve their communication skills and how to engage other colleagues to accomplish this.

 

Marketing influence programme - click here

 

 

Do you struggle with too much data or not enough insight?

Tabloid newspapers are powerful communicators and can exert influence on how people think.  One of the most effective tools they use (and abuse?) are concepts that simplify reality and allow people to see what is happening.  So a politician is "beleaguered", a celebrity is on the way "up" or "down",  a government is either "on a roll" or "stumbling".  Many people say that the papers influence opinion and they argue they just reflect it.  But whichever of these is true they cut through lots of data and create insight.

 

As marketers we need to create insight and become powerful communicators to win over the business to our ideas for growth.  There are often many ideas but this is accompanied by great uncertainty about which will produce the right results.  This uncertainty seems to derive from two sources.  Either there is too much data, so it is difficult to sift out what is important or there is a shortage of real customer driven insight because there is little market research available or affordable.

 

 

Have you found yourself sitting through analytical or descriptive presentations that provide some interesting content, but few actionable recommendations? 

 

Or sometimes have you found yourself struggling to come up with insights and unable to justify the investment in high price market research to create the customer understanding that will bring clarity to your decisions?

 

One of the breakthrough tools we have developed to cut through data and create insight is to develop "really useful concepts" that help you to see through the mist and bring clarity to decisions about what to do.  We have found it makes a huge difference and supports a cost effective approach.

• When there is too much data, the "really useful concept" slices through the data to bring out the compelling insights.
• When there is not enough money for new research, the "really useful concept" supports a structured approach to thinking through the issues and coming up with answers.  This approach may be done with customers or just your colleagues in the business.

You will probably have heard us talk about the concepts we use. What characterises all of them, is that they are built around an important business decision rather than just descriptive of an approach to analysis or discussion.

 

• Power Categories - where should we invest to get the most profitable growth?
• Power Attributes - what features and benefits most powerfully influence customers to choose our products?
• Power Propositions - products and services that deliver power attributes.
• Power Channels - where does the product or service need to be seen and be available so our customers will discover it and can buy it?

We also have two additional ideas that have provided valuable support.

• Rocketing - the tendency for customers to trade up and spend disproportionately on things that are really important to them
• Internal Entrepreneur - describes the skills and behaviours of the people who can make things happen and influence the organisation to change and actively create growth.

We were recently challenged about why our website and our conversation does not use the conventional language of the brand marketing world. So why we do not talk about market segmentation, brand positioning, marketing communications, brand pyramids, brand wheels and so forth? The question caused me to think about this and reflect on whether by being different, we are just confusing the issue.  In our experience this marketing speak can encourage debate, but often does not lead to decisions.  So we plan to stick to these "really useful concepts" because they are just that "really useful".
                                  
We know that internal entrepreneurs succeed when they become great communicators. Maybe we can learn from the Tabloid press and use simpler more powerful concepts.  When our clients adopt these "really useful concepts" they find it helps to create a common understanding about the decisions that the business must make.  This helps engage the business team and win support for the ideas. 
                                  

What is it that makes a concept "really useful". It must have the following characteristics

• It creates insight about an important business decision or action.
• It communicates.  It is easy to grasp and possible to have an idea of what it is about from the title.
• It is adaptable and can help you derive insight from robust data or management discussion.
• It has been proven to work through robust analysis or previous practical examples.

 

 

 

What "really useful concepts" do you use to make decisions?  If you want to share them, you can look at the blog version of this article and post a comment.

                                  

 

 

 

 

 

Our next due date for an ezine is 25th December, so we will skip that one and the next issue will be a New Year perspective on 2nd January.

                                  

In the meantime have a great holiday break.  The Differentiate team will be taking the chance to get some skiing in.  But we are back shortly after Christmas and will be fired up for the New Year.

What is an insight? Does it matter?

Insight is a word that is often used, and abused, in business but what does it mean?  You might think that it doesn't really matter exactly what is "an insight".  But since nowadays the claim of insight is everywhere we need to make sure we recognise the real thing, so we confront it when we see it.

 

Insight is when you uncover the true nature of something.  The way things really are or the way the trends are moving.  Sometimes this can conflict with the way the business is today and so it is inconvenient or at least uncomfortable, especially if the business is doing well.  But we know we must confront it, since it it is always an uphill struggle to work against reality.  We can all name once successful businesses that failed to react to changing trends until it was too late.

 

Insight is a breakthrough.   While often "obvious" with the benefit of hindsight, at the time it causes you to stop and reassess how you do things.  There should be a bit of an "aha" moment.   Some of the most powerful insights can come from our own observations and ideas rather than formal research.  For example, the fact that people want "better for you" products is not new news.  We have been involved in developing these types of products in many food and drink markets for nearly 25 years now.  The one thing that we continually see (other!) businesses ignore is the fact that not many people will buy "better for you" if it doesn't also have "great taste".  Once you know you need both you get breakthrough ideas like smoothies.

 

Insight solves problems.  At first an inconvenient insight might seem to create problems based on the way we do business today, but true insight also highlights the way forward and how we might succeed.  Figuring out what is the minimum acceptable level of service for an airline has enabled Easyjet to strip it's business down to the essentials and recently post record profits despite a reduction in average fares and increases in fuel costs.

 

Insight is easily understood and communicated.  People "get it" straight away and easily know if what they are doing is working with or against the insight.  In fact clearly articulated insight helps everyone know whether an idea is a good one or not and so makes decision making much quicker and easier.

   

Insight creates change.  It is relevant to the business today and it's success in the future.  People know they ignore it at their peril. 

 

We have talked previously about the role of the internal entrepreneur in large organisations.  These are people who push their ideas with conviction and energy and don't let obstacles and objections get in their way.  Listen to their insights, give them the tools to create insights and you are half way to creating the growth you need.

How to charge twice as much and still sell the most

When people pay more for things and lots of people buy them, many will look in awe and think, how did they do that?  The answer is that somehow, the creator of the product or service has imbued it with some power attributes that make it more attractive than the alternatives.  If you can work out what these attributes are, then it might help you come up with Power Attributes for your business.

Lets take a current example.  The iPhone has created quite a buzz and is charging a huge premium price. They are charging £269 plus at least £35 a month for a minimum of 18 months, which comes to £899.  For most fancy new phones today, people either pay up to £200 for the phone or £35 a month for a contract which is far more generous than the iPhone contract.

So will it work for Apple, will enough people pay?  The early signs are that they will,  O2 assert it is the fastest selling handset ever.  This is despite a number of features that are missing from the phone.   The camera is only 2MB, the internet is not 3G, there is no MMS, the battery life is short, limited ring tones, it does not work as laptop modem, the on screen keyboard is unfamiliar etc.  Both iPhone competitors and the geeks on the blogosphere will point this out.  (type in "iphone sucks" into Google)

Judging by the initial reaction, iPhone have got some things right.   Obviously they have created a really cool image compared to a Nokia, Sony Ericsson on Samsung.  How did they do that?  In our experience there great image and reputation has a functional underpin.  Identifying the Power Attributes will help you to work out not just the image strengths but to understand the functional benefits the product delivers.  What might the attributes be in this case?  Here is a short list

• beautiful appearance,
• the latest gadget
• smooth easy to use operation
• real internet access (not wap)
• easy to use email
• multi tasking between functions
• my friends notice I have it
• the best handbag/briefcase jewelry
• a big screen so I can read the content
• can watch real video.

There will be 20 or 30 of these attributes that can be discovered through brainstorming or workshops with consumers.  The question is how to work out which are the real buzz attributes.  Once you know this, then you will understand why people choose the brand and why they pay more for some things rather than others.

Our paper on Power Attributes discusses how to do this in more detail  click here

Once you know which are your Power Attributes, then make sure you invest in them and tell your customers.  If you are not sure which are your Power Attributes, then find out quickly before your competitors find out and steal them from you.