November 27, 2007
his book "The Innovator's Solution: Creating and Sustaining Successful Growth", Clayton Christensen writes:
"How do you create products that customers want to buy–ones that become so successful they "disrupt" the market? It's not easy.
Three in five new-product-development efforts are scuttled before they ever reach the market. Of the ones that do see the light of day, 40% never become profitable and simply disappear.
Most of these failures are predictable–and avoidable. Why? Because most managers trying to come up with new products don't properly consider the circumstances in which customers find themselves when making purchasing decisions. Or as marketing expert Theodore Levitt once told his M.B.A. students at Harvard: "People don't want to buy a quarter-inch drill. They want a quarter-inch hole.""
Put another way, people aren't looking for that thing you are marketing; they're looking for the best tool to get a job done. Unless your product is some sort of "collectible", your customers are only buying your product because they believe it will help them achieve that objective. Product features and functions may change at an ever increasing rate, but the things that people want to accomplish in their lives don't change that quickly. Brands that help customers accomplish their objectives more effectively and conveniently than their competition are the ones that will be successful.
Given this, why do so many companies attempt to market their products and build their brands using an approach focused internally on the thing and not externally on the customer's need? They conduct focus groups, assembling panels of customers to ask if adding this bell or that whistle to their thing would make it more appealing. They do extensive demographical analysis to determine those target customer segments that will find their thing appealing and then spend lots of resources convincing those customers to buy their new and improved thing. Sure, they get clear inputs on what customers want, but don't typically take the time to understand what customers were trying to get done for themselves when they use the company's thing. And this approach isn't isolated to just manufacturers. It carries over to retailers who are focused on the products they are selling and not the job the customer is trying to get done.
Consumer Electronics retailers (my background) are particularly guilty of this. They are constantly telling customers that they have "all the great technology you want (or need) at prices you can afford".
The fact is, very few people "want (or need) technology". Customers don't just wake up one morning and decide they need to go down to Circuit City to pick up some great new technology.
They DO want to have an incredible theater experience in their home. They DO want to capture and share family memories. They DO want to be able to print documents from any computer in their home.
How do the marketers respond to these needs? They dish out specs like 1080p, HDMI2.3, megapixels, and 801.11B, G or N. Whatever the latest spec is, that's what you want. For the customer, none of this hype guarantees a great experience. Marketers who choose to promote their things this way will have a hard time building a powerful brand.
Marketers who understand what customers are really looking for will succeed by focusing on the experience enabled by their brand. Apple is, of course, the often-cited poster child for this. The iPod has never been the best in class from a technical standpoint, but the way Apple enables the music listening experience is what has put their brand miles ahead of the competition. In fact, the term "iPod" is often used generically in place of "MP3 player". Customers looking for a portable media player will almost always think of Apple and iPod first.
My friend Ryan Karpeles wrote a great post on what he calls Reverse Branding which echoes this idea:
"People rarely think of your actual brand first. They think about what they want. Then they decide who, specifically, can fulfill that desire. Being that "who" is the essence of Reverse Branding."
Getting customers to drive your brand in this way is the holy grail of marketing. To get there, you first need to understand that it's the hole they want, not the drill. Once you get that, focus your efforts on being the best damned hole maker in the business.
Drew's Note: Doug recently took a job with IBM as a Retail Consultant. Before that, he was with Circuit City, focusing on their Innovation and Strategic efforts. Doug is another Disney regular, which makes him a good guy in my book!
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