Voice of the Emergent Customer

by Drew Boyd

Are some customers better than others at developing new concepts? Professor Donna L. Hoffman at the University of California Riverside thinks so. Emergent customers have a unique ability to "wrap their head" around a new concept and improve it. She created a scale to identify them so companies hear the voice of the 'right' customer during new product development.

Emergent customers are better at imagining how concepts address latent unmet needs. Dr. Hoffman describes it as a "unique constellation of personality traits and processing abilities that enables such consumers to engage in a synergistic process of visualization and rationalization to improve product concepts." Those characteristics are:

• Openness to new experiences
  
• Reflection
  
• Experiential and rational processing style
  
• Verbal (rational style) and Visual (experiential style)
  
• Creativity (self perceived)
  
• Creative personality
  
• Optimism

The study included 1,124 respondents and compared performance of those identified as emergent customers against those of lead users, early adopters, and a control group. The emergent customers significantly outperformed the other groups.

How would you put this to use?

• Market research firms could use the scale to screen research candidates. Emergent customers focus on improving concepts, while 'non-emergent' customers judge marketplace acceptance.


• Companies could learn about their emergent customer's behaviors and beliefs. Do they buy more, use more, or pay more for certain products? Do they use products in a different way? Do they influence other customers?


• Companies could set up advisory panels of emergent customers to watch for opportunities and threats.

How would emergent customers perform using a structured innovation method? It is tempting to assume they would do better using methods like S.I.T. These people are more motivated and optimistic. They are more hopeful about the output of innovation workshops and are likely to push harder. Star performers "Google" their mind to make innovative connections and associations in rapid fire fashion. This relates to Dr. Hoffman's factor of "experiential and rational processing style."

For innovation workshops, my 'dream team' would include a mix of emergent and non-emergent participants. Perhaps the ideal scenario is pairing them together. As the emergent thinker pushes ideas into new territory, the non-emergent thinker can offer quick feedback. Innovation is a team sport after all.

Researchers have long noted that the "voice of the mainstream customer" is not that useful in developing new products. Instead, finding the 'Voice of the Emergent Customer' could be a new source of competitive advantage.


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Drew Boyd is Director of Marketing Mastery for Johnson & Johnson (Ethicon Endo-Surgery division). He is also Visiting Assistant Professor of Marketing and Innovation at the University of Cincinnati and Executive Director of the MS-Marketing program. Follow him at www.innovationinpractice.com and at http://twitter.com/drewboyd

What's in a Name?

Lessons in Insights & Innovation From Anti Monkey Butt Powder

by Mark Prus

I am a professional name developer, and I like to gather opinions about product names. Earlier this year I posted a Twitter Poll to gather opinions on Anti Monkey Butt Powder... Good Name or Bad Name? The results indicated that about 70% of people thought Anti Monkey Butt Powder was a bad name.

However, the real learning came from the comments I received about the posting. The people who thought it was a bad name were making fun of the name and the product. The people who thought it was a good name were people who suffered from what might be described as a "chafed butt" due to extended horseback riding or motorcycle riding or truck driving. Several claimed to be consumers of the product and they were very defensive about the name... they thought it was perfect.

So what is the lesson on insights and innovation? It is very simple... do a great job of developing consumer insights behind your product and those insights will lead you to terrific ideas, such as a novel name for your product that speaks loudly to your target market. Who cares about the majority of people who might ridicule your product? What you should really care about is the "passionate minority" who will turn into loyal fans!

The owners of Anti Monkey Butt Powder did a terrific job of identifying with their very narrow target market. The "problem" of having a chafed butt is not one that everyone has, but if you do have it, you understand what Anti Monkey Butt Powder is designed to do. If you do not have this "problem" then it really does not matter what you think because you will never buy this product.

I chose Anti Monkey Butt Powder for the Good Name Bad Name poll because I thought it was a clever name, but when the passionate responses came in from people who identified with the product, I loved the name even more!


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Mark Prus is a marketing consultant who offers a name development service called NameFlash^SM.

Innovation vs Commoditization

by Steve McKee

You can hardly turn around these days without running into some sort of reference to innovation. Dozens of books about the topic line the shelves at Borders and Barnes & Noble, from "The Art of Innovation" to "The Myths of Innovation." Innovation is rapidly becoming the latest business buzzword.

But before you dump 'innovation' into the jargon dustbin along with 'reengineering', 'rightsizing' and 'paradigm shift', consider this: the need for innovation has never been greater than it is today.

Doug Hall is founder and CEO of Eureka! Ranch, an organization that helps companies define, refine and improve their new ideas. In an interview with SmallBiz magazine, Hall defined innovation as that which:


"moves companies and their offerings along a continuum from providing commodity products or services to having a monopoly that is extremely difficult to combat."


Hall's definition is spot-on, and made even more significant by the fact that no company's position along that continuum is static. If you're not actively moving your company away from commoditization, it's destined for it. The extent to which any business proposition or value equation is achieving success in the marketplace is the extent to which it will attract competitors who want what it's got. There's simply no free pass to sustainable success.

If you're making money you're making noise, and competitors are bound to notice. They'll deconstruct your products, mimic your pricing structure, duplicate your distribution system, infiltrate your customer relationships, and do anything else they can to take your margin and market share. In so doing, they'll be creating acceptable substitutes for your products and services, which without intervention will inevitably lead to a price war in which no one wins. Unless you can stay ahead of the game through continuous renewal and change (i.e. innovation), your competitors will commoditize you right out of business.

As frightening as this prospect might be, many companies are intimidated by the concept of innovation. They somehow think it's the purview only of organizations with massive R&D departments funded by equally massive budgets, not the typical small- or medium-sized business. But this reflects an incomplete and unrealistic understanding of what innovation is really all about.

One of the reasons executives think this way is because we tend to associate innovation with breakthrough leaps forward - advances that change the playing field, shift competitive dynamics, make the covers of Forbes and Business Week and end up as business school case studies. Certainly, big innovations can be big news, and for good reason (Doug Hall's research shows that major breakthroughs are worth four times as much as minor innovations). Naturally, they're the ones that get the most press.

But the systematic introduction of even small improvements along the commodity-monopoly continuum can compound to deliver just as much (if not more) impact as a single big breakthrough. Popular Science says of innovations:


"The objects don't necessarily need to be beautiful. They don't have to be eco-friendly. They don't even have to be difficult to build. They just have to push past what we thought was possible just twelve months ago."


To that I would add that they don't have to be big. They just have to be consistent.

If you spend just a few hours critically analyzing your industry from a customer's perspective (perhaps even involving customers themselves), you'll identify dozens of pain points about which somebody ought to do something. Airline seats should be comfortable. Take-out orders shouldn't be wrong. Physician's handwriting should be legible. The better you can anticipate what customers will be wanting/needing/expecting down the road, the more likely you can be the leader that first addresses the issue. No one, as they say, ever asked for a microwave oven. Or even a curved shower rod.

Want to keep commoditization at bay? Focus on innovation. No matter what size, shape or form your company is.


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Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Pretending to be a Customer

by Mike Brown

It's a challenge to objectively examine your own website as if a prospect or customer seeking information would. There's an approach you can follow to get ideas flowing though: Look at a direct competitor's online presence, trying to shoot holes in it based on how a customer might view it.

You should really be able to get into it by answering a few questions:

• What misleading or out-of-date information is presented?


• What's not compelling about the website?


• What's confusing about the navigation?


• How much unnecessary detail do I have to supply to get a copy of the "free" download?


• What questions do I have that the website doesn't answer?


• Do I know where to get my other questions answered?


• In what ways did I get smarter by browsing this website?


• In what ways were my information needs left wanting?

After doing this, go back and see how your own online presence compares. Looking at yourself from a customer perspective should now be much easier!


Editor's Note: When you're in a pinch (or without a research budget), you could also use this technique with employees (preferably new ones) for more than just web sites.


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Mike Brown is an award-winning marketer and strategist with extensive experience in research, strategy, branding, and sponsorship marketing. He's a frequent keynote presenter on innovation and authors Brainzooming!

Innovating Without Ignoring Today's Revenue

by Matt Heinz

Scott Cook, legendary founder of Intuit, discussed in a recent issue of Inc Magazine how today's entrepreneurs can continue to incubate new ideas while successfully focusing on today's day-to-day revenue generation. His answer can be broken down into four keys to achieving both innovation and execution today:

1. Make sure employees know which output metric they are responsible for and how it is measured. Focus on the metrics that matter most to growing the business (new customers, margin, top-line growth). These measures will ensure proper focus on today's business, and will also give employees a foundation from which to brainstorm and incubate new ideas focused on the same end-goal.


2. Enable all of your employees - not just a small group - to invest business ideas or product features. Don't predetermine which employees - based on rank or tenure or paycheck - will have your business's next great innovation. Oftentimes, it's the frontline employees who speak with your customers all day, every day who are first to see trends and identify new opportunities.


3. Run cheap, quick tests to make sure you are on the right track. The first step could be running the idea back by a few customers to gauge their feedback. But don't overthink these tests. Get enough feedback to hone the idea and mitigate risk/exposure of taking it to the next step.


4. Think big! For innovations to succeed, they must solve a large enough problem for the customer. This doesn't mean that every innovation is a new product, or new division, or fundamental shift in your business. It just means, to succeed, innovations need to make a profound impact on the customer. That impact can still be created by relatively small changes in policy, features, supply chain and more.

How does your company focus on innovation without ignoring today's revenue?

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Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at matt@heinzmarketing.com or visit www.heinzmarketing.com.

Scouting for Innovation

by Stefan Lindegaard

Nerac is a global research and advisory firm for companies developing innovative products and technologies. Two of their employees, Kristy Lutz Ulmer and Margaret Fiore, recently published a report on how companies scout for innovation.

I just got to read it and I find this to be great stuff that I want to share with you. You should also download the full report here - Innovation Scouting For 2009

The findings in the report fit well into a key thing being discussed in the open innovation community right now; the real effects of open innovation are due to behind-the-scenes activity rather than flashy portals and idea-generation campaigns.

The report has lots of great insights and the authors want to highlight these conclusions:

• Innovation scouts acknowledge a general lack of formal knowledge of the process of scouting, including how to find and evaluate ideas.


• The more integrated a company's products are into other companies' products, the higher the likelihood that scouting is considered important.


• There are many different approaches for implementing innovation scouting, with companies using internal innovation scouts, external partners, third party scouts, and consultants.


• Most companies operate with a small cadre of scouts, usually fewer than six resources.


• The scouting role is not always confined to internal R&D departments within an organization, but instead is often jointly sponsored across multiple business units.


• Innovation scouts use many methods for finding new ideas, with competitive intelligence the most prevalent source of ideas.

As we can see from the snippets below, the report is full of data and interesting conclusions:

Usage of Innovation Scouts:
Of the nearly 600 companies surveyed, approximately 30% of the respondents knew that their companies use innovation scouts. Another nearly 8% were aware of plans to begin using innovation scouts. Surprisingly, just over 42% were unsure whether or not their company employed scouts, so the usage rate could actually be higher.

Age of Scouting Program:
When asked how long scouts had been in place, 37% reported their companies have used innovation scouts for over five years, followed by another quarter that have used scouts between two and five years.

Size of Scouting Program:
Most companies operate with only a handful of innovation scouts. Our survey found that of the respondents who use innovation scouts, nearly one third have fewer than three employees in this role. Only 14% have more than 25 scouts.

Objectives of Scouting Programs:
The most important driver cited by 70% of respondents was "early identification of disruptive technologies." This is followed closely by building the product pipeline, leapfrogging the competition, and creating something novel.

Sponsorship of Scouting Program:
38% said that scouting was sponsored by their R&D organization. Another 24% reported that it was sponsored by Business Development followed by 21.8% respondents that indicated their scouting was jointly sponsored by several executives or groups.

Scouting Resources:
Our survey sought to identify norms regarding how scouting programs are staffed. We found that the most common staffing approach (at 63%) is to tap company employees on a part-time basis. However, over 25% have full time employees in this position. Over a third of the respondents characterize their scouts as technically oriented, and over one quarter as business/marketing oriented.

Scouting Methods:
We found the most common techniques for uncovering external ideas include conducting competitive intelligence (76%), attending relevant conferences and tradeshows (72%), leveraging academic connections (71%), and exploiting their network of innovators (55%). Other, less common methods include the use of third party networks (41%), innovation "bounty" challenges (18%), and crowd sourcing (8%).

Knowledge Gaps of Scouts:
Our survey asked an open-ended question regarding the biggest knowledge gaps or primary training needs for innovation scouting. The most common response, by a measure of over 3:1, was a lack of understanding the "process" of scouting, that is, how to actually go about doing the job.

Successes and Failures:
More than two-thirds of respondents rated their innovation scouting programs as just "moderately successful," with only 12% rating their efforts as "very successful." While a majority of companies surveyed feel their scouting programs are successful, this indicates there is certainly room for improvement.

Great job by Kristy and Margaret of Nerac! Check the full report here: Scouting For Innovation 2009

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Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

Panera Bread Rising

by Steve McKee

"Most of the world seems to be focused on the Americans who are unemployed. We're focused on the 90% that are still employed."


Those are the words of Ron Shaich, CEO of Panera Bread, the 1,300-unit bakery-cafe that has found a way to thrive in spite of the recession. Its formula? A combination of smart financial management and keen understanding of its core customers, most of whom remain gainfully employed (and ever-more attuned to good value).

Rather than cutting corners, Panera has focused on offering more to its broad range of middle income customers, including free wi-fi access and frequent new menu offerings. According to Shaich:


"In many ways, we're renting space to people and the food is the price of admission,"


Panera COO Rick Vanzura agrees, saying, "A bunch of folks have been cutting quality to cut price to go after the marginal customer. We said a better strategy that addresses a bigger group of people is providing better value."

The strategy is working. In 2008 (a very bad year for most fast-casual restaurants), Panera Bread grew by double digits. In 2009 - the worst economic year in generations - the company managed to keep same store sales from declining, and in the third quarter actually increased them by 3 percent. Food industry analyst Darren Tristano pinpoints why:


"Panera's on-trend with what consumers are asking for: fresh, customizable, convenient, won't break the bank."


Panera Bread has been able maintain its focus because of careful cash management. Rather than using debt to expand, assuming the good times of years past would keep on rolling, the company grew slowly and deliberately over the past decade. That kept it healthy from a cash flow perspective and prevented it from having to cut corners or cut margins (or both) when times got tough. As Shaich says:


"Every chain is cutting something - portion size, quality, hours of labor. The result is that ultimately the customer feels it."


Most players in the restaurant industry - in most industries, for that matter - think the current game is all about price. Panera Bread is an all-too-rare exception, demonstrating that companies that keep their focus, nerve, consensus and consistency can thrive even in bad times. I'm a fan.

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Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Don't Confuse User-Driven Innovation With Open Innovation

by Stefan Lindegaard

Denmark has its share of world-leading companies on user-driven innovation. Lego, the toy company, is a great example of this through their Adult Fan Of Lego groups and many other initiatives.

Another example is Coloplast which develops products and services that make life easier for people with very personal and private medical conditions. Their business includes ostomy care, urology and continence care, and wound and skin care. They are considered by many as a global pioneer of user-driven innovation due to their work with doctors, nurses and users of their products.

Last week, I read an article on how Coloplast has set-up communities for their users to share experiences and ideas. You can use Google to translate the Danish article and you can check out one of their communities here: International Stoma Innovation Community. In the article, Coloplast claims that they have halved their development time over the last couple of years partly due to the external input and they also mention that they are now using many more external partners than previously.

It sounds good, but nevertheless, I think Coloplast is a nice example of company that is still stuck in the user-driven mindset. The main idea of user-driven innovation is to get input from the users - and perhaps even the eco-system - of your products or services.

Open innovation is about integrating external partners in the entire innovation process. This should happen not just in the idea or technology development phase but also in all other phases towards market acceptance. User-driven innovation is great as it directs your innovation efforts towards market needs. Open innovation takes you to the next step by providing more opportunities through external partners as you address those market needs.

Which red flags did I pick up on Coloplast? First, take at look at their corporate website. I cannot find any guidelines on how to approach Coloplast with ideas or other contributions. Compare this to Procter & Gamble where you can find a very visible link to their Connect+Develop initiative.

Another red flag is the stoma community itself. It really gives you the feeling that it is about how Coloplast can tap into users rather than how they can work together and build relationships with external partners. This is what user-driven innovation is about. It should just not be confused with open innovation.

Furthermore, if you search for "innovation" on Coloplast' corporate website nothing shows up besides a links to their international stoma community. This is actually a bit scary for a company that perceives itself as being quite innovative. It makes me - and perhaps many others - wonder how serious they really are about innovation...

The reason for writing this blog post is that I want to caution Coloplast - and other companies - not to be confused by the two types of innovation. This can be misleading and damage the possibilities for a company to become the preferred partner of choice which is a key objective on the open innovation game. However, I also think user-driven and open innovation can be a powerful combination and hopefully we will experience great cases on this in the near future.

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Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

Innovate or Die - Tactics #17-42 of 110

by Tom Peters

This is the second of four parts of the list of 110 Innovation Tactics.

• Click here to view Part One - Innovation Tactics #1-16

We Are What We Eat. (And Who We Hang Out With.)

17. Hang out/"We are what we eat" We are what we eat/We are who we co-habit with, and variants thereof are of infinite importance to the effective innovator. Managing "the hang-out factor" is of the utmost strategic importance - and usually an under-tended lever.


18. Hang out/Basic axiom. Hang out with weird - get more weird. Hang out with dull - get more dull.


19. Hang out/Customer portfolio. Consider one's customer portfolio. Perhaps a few giant customers account for 85% of one's revenues. One must listen to them, but the odds are that these giants are relatively conservative. Hence one must purposefully and urgently recruit oddball-"on the frontier" customers. Their revenue stream may be limited, but these folks force you to play with novel products and services to meet their peculiar needs. Hence careful construction of the total customer portfolio is an essential practice.


20. Hang out/Customers everywhere. Customers at various staff meetings, on various teams, etc.


21. Hang out/Our folks at customer sites. Imbedded staff at lead customer locations. The success watchword is "intermingle."


22. Hang out/Vendors/Outsourcing Partners Portfolio. Instead of a few "strategic suppliers," as important as they may be, one needs "far out" vendors and outsourcing partners whose innovations force you into an innovation mode. I.e., repeat #19 and #20 and #21 for vendors.


23. Hang out/Locale (Hotbed). Company or unit HQ location is important beyond measure. Working in a "hotbed" (e.g., Cambridge MA and biotech) is an immeasurable spur to innovation. (Beware: Hotbeds eventually become lookalike and-or complacent - think Detroit, 1920 vs 1980-2008.)


24. Hang out/Team placement. An offsite team in an innovation hotbed often takes on the attributes of a gang of on-the-make pirates. A team near a plant takes plant-derived considerations particularly seriously. Etc. Want weird? Start with consideration of locale.


25. Hang out/Space management. Space management is arguably the singlemost important strategic lever. Designer moved next to the CEO? Design vaults up the importance scale. Etc.


26. Hang out/Consultants Portfolio. Types of consultants brought in influences who we talk to-live with, how we approach problems. There are "hot" consultants, and "not-so-hot" consultants. Again, purposefully and strategically manage the portfolio.


27. Hang out/Crowdsourcing. Crowdsourcing stands a good chance of radically changing the world of innovation! You simply must experiment vigorously. The tool is powerful, but the process is not automatic - it needs lots of thought and oversight. (And it applies to every nook and every cranny of the enterprise - and to small enterprises.)


28. Hang out/Clubs, learning networks, etc. Electronic, physical, any and all formats. Turning the enterprise into a de facto university, with learning and growing honored and ubiquitous and fast and furious and fun, is the point here.


29. Hang out/Staff. Where staffers live relative to their line customers is critical. A finance person imbedded in the logistics department, for example, changes both perspectives.


30. Hang out/Lunchmates. Never waste a lunch!!!! Lunch is 5 opportunities per week, 220 opportunities per year, to get to know interesting outsiders, folks from other functions, customers, vendors, frontline staffers. This is remarkably important. "Lunch management," a "lunch culture" is not an amusing aside.


31. Hang out/Meeting Attendees. We spend enormous amounts of time in meetings. Never waste a meeting. Invite interesting outsiders, folks from other functions, etc. (See #30 immediately above.)

Diversity Per Se. Sine Qua Non.

32. Diversity/Every flavor/Management & Measurement. Diversity with a lower-case "d." Black, white, brown, purple ... tall, short ... North American, Asian ... public school, private school, no school ... etc. ... etc. (Etc.) Decision-making of every sort is far, far better with diverse views of any flavor. Period. I have come to view this as a gamechanger - for a 6-person project team, a 20-person company, a huge enterprise.


33. Diversity/Hiring. Search every oddball corner of the world for interesting people. Hire dull, get dull results. (Duh.) (This holds across the board - and irrespective of the size of the enterprise.)


34. Diversity/Freak Acquisitions. I'm an enemy of 99% of mega-mergers, and a vigorous ally of small acquisitions that allow skipping steps in obtaining interesting new pieces of the puzzle for an enterprise. This can be the purchase of an intriguing 2-person accountancy by a 15-person accountancy, as well as a small-acquisition overall strategy by the likes of Cisco Systems.


35. Diversity/Promoting. Diversity of every stripe at every level, achieved by design. Remember, diversity-qua-diversity works.

100% Enthusiasts. 100% Innovators. HR = Supercool.

36. "What do you think?" Innovation - an innovation culture engages one and all. (All = All.) Getting everyone to think about improvements small and large comes from, de facto, constantly asking "What do you think?" - perhaps the 4 most important words in the innovator's vocabulary. Treating every voice as valued yields more value from every voice.


37. Hire enthusiasts. Innovation is about active engagement. The more enthusiasts, the more people want to "opt in" and fully engage. Enthusiasts are innovators almost by definition. (Or, at the least, non-enthusiasts are guaranteed non-innovators.)


38. Promote enthusiasts. Enthusiasts are important in all roles. Enthusiasts as bosses is a "no option" imperative - if you want to create an "innovation machine" in organizations of any size.


39. Innovative behavior is the best predictor of innovative behavior. Want to discover an innovator? Best test: a history as an innovator, apparent at the latest by, perhaps, age 10 or 12 or 14.


40. Re-invent HR to be a Center of Innovative People. It's not that HR has to "support" a culture of innovation. HR must be a chief carrier of the culture of innovation, must model innovative behavior 100% of the time. An "innovation culture" in HR is arguably more important than an innovation culture in marketing and new product development. (Think about it.) (Alas, this is ever so rare.)


41. Get the incentives right! Profitability, quarter by quarter, is essential - in organizations of all sizes. But a commitment to innovation as evidenced by the likes of share of revenue from products introduced in the last 24 months should be a major component of discretionary compensation. Equivalent measures must be developed for logistics, purchasing, HR, IT, etc. Incentive schemes must "speak" innovation.


42. Get the evaluations right! Per #41 immediately above, the evaluation process must focus on risk-taking, innovations launched, "excellent failures" as one exec puts it. Department bosses might be evaluated by comparative innovativeness at similar departments in peer-competitor firms. Etc. Innovation-in-evaluation is a 100% affair.

If you missed Part One - Innovation Tactics #1-16 - Click here.

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Tom Peters is the author of "In Search of Excellence" and twelve other international bestsellers, and a consultant, columnist, seminar lecturer, and more at the Tom Peters Company

Creating Priceless Value

by Kevin Roberts

This week was a biggie - speaking at HSM World Business Forum at Radio City Music Hall in New York. I was onstage immediately before George Lucas, and as much as I would have loved to stay, I had the week from hell with speeches and meetings over the following three days in Miami, Washington DC, and Chicago.

In the lead up to the event I recently gave a webinar where I gave a preview of what I covered in my presentation, and I answered about 20 questions which poured in from all parts of the world.

In my webinar opening remarks I focused (again!) on Winning Ugly, which has been my mantra at Saatchi & Saatchi since the recession. There are a bunch of ways to win ugly, but one constant in the list is reframing your beliefs about value. With more choice, more connectivity, and less spend, consumer power is reframing the notion of value.

In this time of "new frugality" everyone is wanting more for less. People are evaluating more (71% of Americans shop online before buying a car), trying more, comparing more, and contemplating switching more. Online themselves, and online through others.

Here are the ways consumers are thinking about value; they're saying:

"I'm sorting true value from false economies."
People want smart abundance, not rubbish

"I'm not cutting back on luxuries, I've just redefined what luxuries are."
People still treat themselves, just not in the same way.

"I'm into the challenge of finding creative solutions."
Ingenuity is the new innovation.

Companies must jump-shift their value comparisons.

P&G invites consumers to compare Tide Total Care with the costs of dry cleaning.

Prius invites drivers to enjoy exhilarating motoring while at the same time refreshing the environment.

Tylenol shifted the goal posts in an admirably non-self-serving way: their advice for a headache? Drink a glass of water, wait 20 minutes - and if you still have one then take Tylenol.

Even a private jet company - Flexjet - reframed its private jets from a luxury item to a valuable business tool, from status-oriented cost center to commonsense transport investment.

Each of these examples represents an 'emotional bonus'. They check the rational value boxes but also deliver emotional value by improving your world.

I call this Priceless Value... uplifting life solutions tuned to how people are feeling, living, spending - and sharing.

I'll be talking again about reframing value, and creating priceless value, at Radio City. Now this, for me, is Priceless.


For more with Kevin Roberts, check out our video interview from the World Business Forum.

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Kevin Roberts is the CEO worldwide of The Lovemarks Company, Saatchi & Saatchi. For more information on Kevin, please go to www.saatchikevin.com. To see this blog at its original source, please go to www.krconnect.blogspot.com.

Generating Social Leads

by Matt Heinz

Let's face it, the term 'social media' doesn't mean much. It's passive, and speaks more to the channel vs. the intent or objective of what's actually happening there.

Your customers are talking to each other. They always have. Only now, they have tools to do it faster, in real-time, and in front of everybody else. That's social media.

But social media, as we know it now, is really the new PR. It's your best channel to reach prospective customers in their current environment. You have less control than you used to, sure, but make no mistake - social media is at the top of your sales funnel.

So let's stop calling it social media, and start calling it social lead generation. At least amongst ourselves.

Today's buyers are presenting themselves to you like never before. They're sharing their interests, their needs, their feelings, their pain. They're telling you, in front of everybody else (including your competitors), exactly what they want.

It's a perfect opportunity to meet them, engage them, earn their trust and respect, and give them exactly what they're asking for.

That's social lead generation.

Don't treat it like lead generation. That runs the risk of ruining its authenticity. But as a core component of building credibility, attention and respect for your products and services, know that - in the end - what you do with this opportunity is measured by its value in engaging and creating new customers.

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Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at matt@heinzmarketing.com or visit www.heinzmarketing.com.

Creating High Performance Customers

by Mike Brown

The past few weeks, I've been schlepping around fabric stores since Cyndi wants to recover several pieces of furniture. This is unfamiliar territory for me, which usually means an opportunity to hunt for different takes on Brainzooming-related ideas.

One can imagine the most asked question in a fabric store is, "How much material is it going to take to reupholster __________?" With many ways to fill in the blank, store staff must spend a lot of time answering the question, especially since customers could likely struggle to accurately describe (from memory) items they're looking to recover.

That's where this photo shows such an innovative services marketing idea: a poster depicting 60 pieces of furniture with the approximate square yardage needed to recover them.

With the poster in place, the exchange on "How much material is it going to take to reupholster __________?" becomes a smile and a finger point to the nearest poster where a customer can find the item and the answer with much greater speed and certainty.

The poster creates higher performing customers which turns into time savings for customers and staff, which leads to better service and lower staffing costs. That's a strategic idea put into practice.

So what stumbling blocks to efficient customer-employee interaction exist in your business? What simple ideas might be lurking to address these issues as effectively as this poster does?

Spend a few minutes thinking about it and see what you can do to improve how you cover the situations you face.

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Mike Brown is an award-winning marketer and strategist with extensive experience in research, strategy, branding, and sponsorship marketing. He's a frequent keynote presenter on innovation and authors Brainzooming!

Seven Reasons Your Business Should Be On Twitter

by Matt Heinz

I can think of seven specific, revenue-producing reasons why most businesses should be on Twitter. If your customers are using Twitter, you probably should be to. But how, and why?

Here are seven places to start:


1. Get New Customers

What do you sell? There are prospective customers talking about it on Twitter right now. Do a search for that product or service or topic and you'll find them. Reply to their tweets, and engage with them directly as prospective new customers. Better yet, start sending your own tweets with the same keywords or hashtags (which is the keyword with a # in front of it to help others find it). That way you'll start attracting new customers to you with the same topics or products.


2. Keep In Touch With Customers & Fans

Find out which of your customers are using Twitter, ask them to follow you. Follow them in return. Share news about your business, your new products, and topics your customers collectively will care about. Reply directly to your customers & fans, and retweet their Twitter posts that would be interesting to the rest of your followers. Twitter is a great way to keep an ongoing, interactive conversation going with your customers between purchases.


3. Watch Your Competitors

Who do you compete with? They're either on Twitter too, or are being talked about there. Do searches for them directly, and you'll not only see what they're talking about to their customers and prospects, but you'll also see what their current customers are saying about them - good, bad and ugly. Not a bad way to find new prospective customers, but at minimum you'll keep closer tabs on the competition - including gleaning things you could be doing to grow your own business.


4. Announce Sales & Specials

Putting that summer line on sale? Tell your Twitter fans. Announce that anyone who retweets the discount to their own followers is entered in a drawing for free product. Send special coupons and offers exclusively to your Twitter followers (which will encourage more customers to follow you).


5. Generate Referrals

Contribute content or links that your followers will retweet to their own followers. This will drive new customers to discover and follow you. Run a contest for anyone who retweets about your business today - all new followers and those who retweet are entered in a drawing for a gift card, or free product.


6. Cross-Promote Neighboring Businesses

If you're in retail or a restaurant in particular, and physically sit with other businesses, you're in it together as far as foot traffic goes. Help promote your neighbor businesses to your followers - even if they themselves aren't yet on Twitter. The more business you help drive to them, the more they'll help drive to you - either directly or via the increased foot traffic to your general area.


7. Cross-promote Similar Businesses in Other Markets

You're a unique hotel in Seattle? Partner with similar hotels in other markets and cross-promote each other to travelers. High-end French restaurant? Do the same. Build a partner network via Twitter to quickly accelerate the volume of out-of-town traffic you generate.


What did I miss?


How are you using Twitter specifically to generate new customers and repeat business?

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Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at matt@heinzmarketing.com or visit www.heinzmarketing.com.

Abuse Customers at Your Own Risk

Long time readers of this blog will know that my love for most airlines in the US has never taken off. In fact, I'm constantly amazed by the continued indifference many of them have towards the consumer, not to mention the consumer's resigned acceptance of the service they're offered.

Not everybody is content to lie down and be trampled on by the commodification kings of the sky. Dave Carroll is an Internet hit after he wrote and uploaded a video to a song called "United Breaks Guitars" about...you guessed it, United Airlines breaking his prized Taylor guitar. Initially complaining, Dave was met with indifference from three flight attendants. A week or so later, he made a complaint which turned into weeks and months to call centers before his claim was inevitably refused. You know the story. So Dave has had his revenge, and another YouTube star was born.

As soon as United heard a public relations storm was brewing, they got in touch with Dave to put it right. Good on Dave Carroll for saying that United "has generously, but late, offered some compensation but would rather see the money go to a charity of their choice." I'm not sure if Dave needs the money now - he's gearing up for the second of his three promised songs on the subject, and has more PR for his band than he could have dreamed of.

This is another example of the increasing power of social media. Consumers have the ability to talk back and change things. The effect of Twitter on Sacha Baron Cohen's film Bruno is another example. It debuted at US$14.4 million at US and Canadian box offices, but fell to US$8.8 million the next day. The consumer is boss and in immediate control.

For their part, United Airlines have said "Dave's video is excellent, and we plan to use it internally as a unique learning and training opportunity."

A message to the US airline industry: It's not about doing things right some of the time, it's doing things right all of the time, even when you think it doesn't matter. YouTube, Twitter, and co. say it does matter. Customer relations can be a joyful experience, from both sides. Check out this guy to see how it's really done!

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Kevin Roberts is the CEO worldwide of The Lovemarks Company, Saatchi & Saatchi. For more information on Kevin, please go to www.saatchikevin.com. To see this blog at its original source, please go to www.krconnect.blogspot.com.

Toyota and Innovation by Design

Scion Exile Concept Sketch

by Matthew E May

I'm fortunate enough to count car designer Kevin Hunter, president of Toyota's CALTY Design Research, among my board of muses. CALTY (California+Toyota) is one of Toyota's most influential design centers, located in Newport Beach, CA.

CALTY is involved in nearly all of Toyota's major vehicle design programs. According to Kevin, Toyota wants constant movement forward, and design plays an enormous role in that effort. Design is the face of innovation. He has a few rules for the road warriors in his company that have now become mantra.

Rule #1: Balance Today and Tomorrow. "People can't tell you what they want in the future," says Kevin. "But they know what they want now. You have to balance creativity with market acceptability. You have to push the envelope and be progressive, but you can't get too far out there, because customers won't understand. Your design has to evoke something familiar or emotional while at the same time offering something new and unfamiliar." He adds, "You have to avoid a strict design bias and remember who you're designing for. You can't be selfish, you must focus outward, and on the problem you're trying to solve for customers."

Rule #2: Keep it Real and Resonant. Kevin will tell you that "there's a sense of urgency to make design count, to resonate with the buyer." He believes you can never stand still. The customer is always moving, changing, and if you're not out there all the time trying to understand the functional and emotional needs of consumers, your design will simply fall flat.

Rule #3: Blend Creativity and Competition. "We take creative contribution very seriously," Kevin notes. "It's part of every performance review and looked at closely from an evaluation perspective. We work as team, but it's always overlaid with intense competition for the winning ideas. For every design, we have a number of smaller teams in the hunt. To make creativity flow and give people the freedom to think, we've removed much of the layering that other organizations have. Hierarchy stifles innovation, and we need open and honest disagreement about every idea. Every idea counts!" In fact, all of Toyota's studios compete against each other to win the business; in other words, complacency is minimized by treating internal design centers as arms-length vendor-partners.

Here's a thought: send a link to this blog to the folks at the United States of General Motors. I think they need the insight.

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Matthew E. May is the author of "IN PURSUIT OF ELEGANCE: Why the Best Ideas Have Something Missing." He is constantly searching for creative ideas and innovative solutions that are 'elegant' - a unique and elusive combination of unusual simplicity and surprising power.

Broadcasting the Voice of the Customer

Business Strategy Innovation has published a white paper to its web site on "Broadcasting the Voice of the customer."

Here is an excerpt:

"Before the industrial revolution, most businesses in the United States were sole proprietorships or small family run businesses. In those days, every member of the business was in direct contact with the customers and had the opportunity to passively or actively hear the voice of the customer.

The voice of the customer tells us what about our product or service that customers find valuable, and what they find annoying or useless. By focusing on what customers found valuable and removing or reducing what they found annoying, these small businesses could accumulate financial success and customer loyalty.

In today's interconnected world, we are in the midst of a customer revolution. Today's customer has unparalleled access to pricing and product information to enable a more informed and economic purchasing decision. Today's customer benefits from marketing developments such as mass customization, mass personalization, and micro-segmentation. In addition, they have unrivaled access to communication channels to make their preferences known. But, who is really listening?

We live in a world of corporations and conglomerates, where most of the employee class has no direct access to the voice of the customer. The man or woman stitching up your clothing has no idea whether the stitching method worked well for you, or if you were happy with the product. They only know whether or not they made their daily quota and how much failed Quality Control. If the person stitching your clothing had access to the voice of the customer, would they do their job differently? Would they feel differently about their job?

In many of today's companies, the job of listening to the customer falls to someone in the marketing department, possibly even someone who does nothing but focus on brand and customer research. This person usually works with product management and possibly research and development to inform product revisions and new product development. Often, very few people outside of that core team have access to the voice of the customer. But why restrict customer feedback to a select few?"

Download the complete "Broadcasting the Voice of the Customer" white paper in PDF form.


What do you think?

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Braden Kelley is the founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.