26 Aug How Successful Companies Know How to Grow
On an airplane bound for Silicon Valley, I read an interesting article in The Financial Times about a book by Harvard Business School Professor Clayton Christensen entitled Competing Against Luck. The book discusses how successful companies know how to grow.
Christensen believes consumers “hire” — or “buy” in non-management speak — products or services for very specific functions. An example shares discusses a fast food restaurant chain wanting to sell more milkshakes. They embarked on a large market research initiative to figure out how to improve its shakes. However, the real insight was in understanding WHY and WHEN customers bought milkshakes. It wasn’t about the product, but customer habits an desires.
For example, customers purchasing milkshakes in the morning did so to help deal with long car rides or boring commutes. Customers buying shakes in the afternoon bought them to treat their children or themselves. Morning purchases meant a more enjoyable, potentially more interesting commute. Afternoon purchases meant peace-of-mind with happy kids and happy parents. The insight revealed shows that by segmenting customer purchases by times of day, reasoning and the motivation the purchase, the chain was able to more meaningfully market milkshakes and increase sales. It’s easy to question; what are they buying, the milkshake or the experience?
I thought about how or why the team involved with the market research missed the purchase context. Christensen explain it like this, “When you launch a product and it becomes successful, all of a sudden the data that swirls around you is about products and competitors and customers and brands and demands,” he says. “They frame their world in terms of stuff that data exists about, instead of relentlessly asking why.”
Context is the Key
At Axiom, context is THE key to any successful omnichannel marketing and sales effort — digital marketing initiative, direct marketing approach, public relations or social media campaign. How do we broaden and deepen our understanding with discussion around context?
#1 We seek answers to these questions
- Who buys the product and for what purpose?
- How, why and when are customers using the product?
- What are their unmet and underserved needs?
- How often do they recommend the product to others?
#2 We use context to find “aha” moments
- Conducting observational research, which may include videoing customer interactions with the product. Pictures may be worth a thousand words… video tells the whole story.
- Asking questions when customers are actively thinking about and interacting with a product.
- Eliminating bias by using response meters which record their true responses in a quantitative format vs. qualitative focus groups or in-depth interviews.
- Focusing clients on true customer benefits and advantages – not features.
To find more about customer research, see our post From Data to Actionable, Step-by-Step, published earlier this year.