Consumer Insighting for Continuous Product Innovations

Prepared & Presented by:

Ned Roberto, Ph.D.

Salt & Light Ventures, Inc.

Note: No part of this briefing material may be circulated, quoted, or

reproduced for distribution without the written approval from

Roberto & Associates, Inc.

©2002- 2011 by Dr. Ned Roberto. All rights reserved.

An Invited Presentation at:

The 12th SLV’s ALS

27 July 2011, New World Hotel

“Underpinning every marketing strategy model

that worked is an appropriate consumer behavior model.”

Basic Proposition …

Ned Roberto (2010)

So, 1st things 1st …

Start by understanding where the consumers are, and not from where you are as marketers.

Where you are as marketers must come after.

So, begin with consumer insighting.

And What’s

Consumer Insighting in the First

Place?

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Consumer Insighting is about …

… uncovering, unlocking business and

market growing opportunities.

There are several types.

Here, we focus on 2.

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1st. Let’s consider …

… this consumer insight:

“What everyone has seen but THINKING

what nobody has thought.”

… to paraphrase Albert von Szent-Gyorgyi,

Hungarian medical scientist & Nobel

Laureate in physiology.

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2nd. We next consider …

… this consumer insight:

What competitors DO NOT SEE or do

not YET see NOR do consumers.

… the Consumer Insight that: “Everyone

has seen but thinking what nobody has

thought.”

And now to …

“How can you get electric cars to run more

cost-effectively than gas-based ones?”

Case: ELECTRIC CARS

Why are automobile consumers not switching to electric cars?

Is the value of eco-friendliness, the values for clean energy vehicles & pollution control, efficient fuel consumption & emission control, recycling & energy conservation not a priority with them?

Yes, these are priority consumer values.

So what is holding them back?

Consumer Insighting Research …

… where an IDI* found most car owners saying:

“I think electric cars are good. But I’m a sales manager. I drive to work everyday and I go around accompanying 1 or 2 of my sales reps visiting clients who have problems. And that’s everyday too and most of the time we’re driving. Using an electric car in this kind of job means we have to recharge every so often. Depends. Maybe once or twice during the day. That’s not the real problem. It’s the recharging time. It takes so long. If recharging will take only as long as it takes me to fill up at the gas station, I’d immediately go for an electric car. Why not?”

*From a “Deconstruction” role playing workshop among ExecDev Workshop attendees.

So, here’s the consumer’s …

… perceived problem = a real here-&-now felt problem of inconvenience.

What’s the consumer’s own idea of what’s “convenient?”

Convenient = “If recharging will take only as long as it takes me to fill up at the gas station.”

Another Respondent Said:*

“During weekends especially come summer months, I like driving and taking the kids to the beach. Vacation time is either up north or down south and really far away from Manila. When it’s a 4 or 5 or 10 hours driving, my wife and I take turns. So how long or how far can a fully charged battery of an electric car last? I read somewhere about 100 or at most 150 km. And then when fully discharged you’ll have to have it fully charged overnight or for 8 hours. The time of the electric car has not come yet … not for me and my family. If electric cars can offer a prepaid card for their electric battery, then and only will I say that it finally has arrived. In the U.S., you can subscribe to electric power on a prepaid and postpaid basis. So why not for the electric power in electric cars?”

*From a “Deconstruction” role playing workshop among ExecDev Workshop attendees.

So, here’s a clue …

… from the consumer about the problem solution.

And what’s that problem solution idea?

Problem solution idea = “If electric cars can offer (something like) a prepaid card for their electric battery …” [Parenthetical phrase inserted]

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And what is that …

… “something like?” It comes from insighting

that yields our kind of consumer insight:

“What everyone has seen but THINKING

what nobody has thought.”

… to paraphrase Albert von Szent-Gyorgyi,

Hungarian medical scientist & Nobel

Laureate in physiology.

And This Was Precisely …

… the kind of insight that Shai Agassi uncovered on which he founded and organized his company to create the battery-swapping innovation.

Shai Agassi’s Battery Distribution Strategy Model …

1st. Think of car batteries as part of the electric infrastructure.

This way, you separate car ownership from battery ownership.

Then build that infrastructure so that you have a network of charge spots where motorists can hook up to all along the way.

2nd. At each battery switching station, do battery swapping = to like filling up gas.

Travelers drive in their cars to a battery switching, swapping station.

Then the depleted battery, removed.

Next, fully charged one installed in less than it takes to fill a gas tank.

Batteries then charged at night when electricity costs = low to allow a by-use pricing formula for the swapped battery < gas price.

.

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And as this was on-going …

… and as Shai Agassi persuaded Israel, Denmark and Australia to set up and test nationwide the “Better Place” innovation.

In another place, another related innovation was under testing and incubation.

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accelerating the transition to sustainable transportation

The Innovator …

… a word or 2 about “Deconstruction.”

Before proceeding …

And What Is Deconstruction?

It’s re-analyzing the past to see what it could,

even what it should have been.

Adapted, synthesized from:

Bill McMillon, The Archaeology Handbook (1991)

E. Agirre & P. Edwards, Word Sense

Disambiguation (2007)

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And Now, We Next Consider …

… this consumer insight:

What competitors DO NOT SEE and

NEITHER do the consumers.

Case: “How do you grow a

business in a niche market of young heavy T-shirt wearers, a niche

that partakes of the character of a club but

where you can not generate revenue by

membership fee nor by advertisements?”

Consumer Insighting Research …

… where an IDI* found many saying:

“Why should I buy my T-shirt from a club of T-shirt wearers? Sure. But let me tell you why I won’t. Even if I’m a T-shirt fan, or even if I’m a club member, what’s in it for me to get my next Tee through this club? You know, the T-shirt price will only be higher by how much commission the club will charge for selling. That’s why I won’t.”

*From a “Deconstruction” role playing workshop among ExecDev Workshop attendees.

So, here’s the consumer’s …

… felt barrier to buying = a demotivator problem.

So how can this barrier be overcome?

Do consumers themselves, or some of them have any practical ideas about how to remove the demotivator?

Another IDI Respondent Said:*

“What do I think they can do just among themselves to

generate T-shirt sales? You know, we have our

Church sponsor every so often a food fair or bazaar.

Each of us who bake or cook a specialty bring each

one’s thing and put it up for sale. At the end of that

day’s fair, I’m always amaze to see everyone’s item

sold. I guess if I want my cookies sold, I feel almost

obligated to buy someone’s beef stew. So why don’t

they think like that?”

*From a “Deconstruction” role playing workshop among ExecDev Workshop attendees.

So, here’s a clue …

… from the consumer about how to overcome the barrier.

And it’s a simple idea; it’s about side-tracking a problem or jujitsu-ing it in order to solve it.

It’s also problem solving by “analogy,” by “benchmarking.”

And Indeed, …

… & its co-founders, Jake Nickell and Jacob

deHart, thought along how the potluck and the

food fair people did things.

So the resultant marketing strategy model =

Crowd-source, Community-driven Model

Here are the steps in that …

… modeling process to answer that question:

Step #1. Each member of the Threadless Community works on a t-shirt design that each likes.

Step #2. The designers submit their t-shirt designs to the Threadless website.

Step #3. Community members and visitors are asked to score each submitted design on a 5-point scale.

Step #4. Each week, some 1,500 designs compete.

During the week, the Threadless staff selects the 10

most voted designs. The selected designer gets

$2,000 in cash, a $500 in GCs each of which can be

traded in for $200 in cash plus additional $500 for

every reprint.

These 10 winning designs are then printed and sold

through an online store.

Sold-out designs with unfilled orders are scheduled

for reprinting and second round selling.

“Underpinning every marketing strategy model

that worked is an appropriate consumer behavior model.”

Basic Proposition …

Ned Roberto (2010)

Why Be Theory Guided?

“Nothing is more practical than a good theory. If it’s bad in practice, it came from a bad theory. If it’s good

in practice, a good theory made it happen. A good theory is responsible

for a good practice.”

Kurt Lewin Pioneering Psychologist

“It’s more the consumers, the users who innovate

and less us, marketers and manufacturers.”

“CONSUMER-CREATED Innovations”

To successfully “innovate” =

“Watch, monitor how consumers,

users solve their daily as well as

emergent problems.”

The Eric von Hippel Model …

Threadless =“ a phenomenally successful T-shirt company

with more than 4 million tees sold since it began in 2000.”

It pioneered the online business model of crowd-sourced or

community-driven design.

Co-founders Jake Nickell and Jacob DeHart started the company

with $1,000 in seed money after entering an Internet t-shirt design

contest.

Threadless as a Company

Threadless: 10 Years

of T-Shirts from the

World’s Most Inspiring

Online Design Community

by Jake Nickell. 2010

… consumer insighting for 2 categories of continuous

innovations.

So, there’s your …

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1st. Continuous for …

… MARKETER-CREATED innovations.

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2nd. Continuous for …

… CONSUMER-CREATED innovations.

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So What’s …

… your choice?

What’s your choice about …

How to consumer insight for continuously innovating?

“In any choice situation, avoid framing your

choice decision as an either-this-or-that.

Instead frame it as a both-this-and-that kind

of choice. Either-or is a prisoner’s dilemma.

Both-and is win-win.”

Paul Schoemacher

On Making Choices

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Email me at:

ned.roberto@gmail.com

Questions you were unable to ask?