Want to develop great new products? Ask and ye shall receive...

As I always say, if you can't beat 'em, re-publish 'em - with the proper sourcing, of course :)   With a career that has focused deeply on product (management, marketing, development), I'd like to think I'm quite the connoisseur of the finest of writings on such topics.  Below is a terrific set of questions for getting you out of your box and into your mind's innovation lab.  The questions were first published in an HBR article in December 2007.  Enjoy.

21 Great Questions for Developing New Products
“De-average” buyers and users

1. Which customers use or purchase our product in the most unusual way?
2. Do any customers need vastly more or less sales and service attention than most?
3. For which customers are the support costs (order entry, tracking, customer-specific design) either unusually high or unusually low?
4. Could we still meet the needs of a significant subset of customers if we stripped 25% of the hard or soft costs out of our product?
5. Who spends at least 50% of what our product costs to adapt it to their specific needs?

Explore unexpected successes

1. Who uses our product in ways we never expected or intended?
2. Who uses our product in surprisingly large quantities?
3. Look beyond the boundaries of our business
4. Who else is dealing with the same generic problem as we are but for an entirely different reason? How have they addressed it?
5. What major breakthroughs in efficiency or effectiveness have we made in our business that could be applied in another industry?
6. What information about customers and product use is created as a by-product of our business that could be the key to radically improving the economics of another business?

Examine binding constraints

1. What is the biggest hassle of purchasing or using our product?
2. What are some examples of ad hoc modifications that customers have made to our product?
3. For which current customers is our product least suited?
4. For what particular usage occasions is our product least suited?
5. Which customers does the industry prefer not to serve, and why?
6. Which customers could be major users, if only we could remove one specific barrier we’ve never previously considered?

Imagine perfection

1. How would we do things differently if we had perfect information about our buyers, usage, distribution channels, and so on?
2. How would our product change if it were tailored for every customer?
3. Revisit the premises underlying our processes and products
4. Which technologies embedded in our product have changed the most since the product was last redesigned?
5. Which technologies underlying our production processes have changed the most since we last rebuilt our manufacturing and distribution systems?
6. Which customers’ needs are shifting most rapidly? What will they be in five years?

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Strategic Marketing Framework to print out & hang on your wall at work

I've found this framework to be immensely helpful to me throughout my career.  Particularly during those fire-fighting, short-term focused periods of work that we all experience from time to time, this framework has always helped me to reorient myself & recalibrate.     

There's a lot more to come with the framework - I'll be drilling down into the different dimensions in more detail so you can have a richer understanding for how to use it to develop robust new marketing strategies and to improve existing ones.

Please feel free to email me if you have any questions about how to put the framework to use within your business.

download framework (pdf)

Related Posts

• Akin Arikan, author of Multichannel Marketing: Metrics and Methods for On and Offline Success, "digitizes" my strategic marketing framework

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What is customer segmentation?

Like so many buzz words in business & marketing, "customer segmentation" is one of those terms that is interpreted by folks to mean many different types of things. If the word "segmentation" were blurted out in a room of 20 business people, chances are it would conger up 20 different images. So what is customer segmentation, and how can it be used to propel one's business?


Segmentation defined
Customer segmentation is a method for grouping customers based upon similarities they share with respect to any dimensions you deem relevant to your business - whether it be customer needs, channel preferences, interest in certain product features, customer profitability, etc. The key is for you, the marketer, to first decide on what basis you wish to segment your customers (or prospects for that matter). And, the only way to answer this question is to first determine what your objective is for the segmentation, and thus what you want the segmentation to "do for you".


Common segmentation objectives

• Developing new products
• Creating differentiated marketing communications & ads
• Developing differentiated customer servicing & retention strategies
• Targeting prospects with the greatest profit potential
• Developing multi-channel distribution strategies

Once you have decided what your objective is for the segmentation, you can answer the question, "what do I want the segmentation to do for me?"



A brief example: segmenting for customer win-backs
Let's say you worked for a subscription-based magazine such as Newsweek. Your boss has asked you to optimize Newsweek's retention strategy utilizing the current save tactic of sending people who have recently canceled their subscriptions (aka "attritors") 1 of 3 "win-back" mailers. This existing save tactic has been employed by Newsweek for the past 2 years, and the method for determining which attritor receives which mailer has been based largely on "intuition" (aka random selection).


Step 1: Your first step in undertaking this project would be to clearly state your objective. Your objective, as per your boss, is to optimize Newsweek's retention strategy for recent attritors. This is shorthand for saying, "I want you to maximize your return on your retention-dollars invested". Without getting into the nitty gritty of the approach, what you essentially want to do is determine the relative ROIs for each of the 3 mailers at the individual attritor level. For each mailer, you then want to identify those attritors with high ROIs (i.e., those attritors who re-instated their magazine subscriptions after receiving the mailer and provided you with future profits that well-exceeded the cost of the mailer).

Step 2: For each win-back mailer you want to identify those attributes which the high-ROI attritors have in common, essentially creating a profile for "high-ROI attritors" for each mailer.

Step 3: The final step is to operationalize the three profiles you've created so you can use them to determine which of the 3 mailers, if any, to send to future attritors. This essentially entails implementing a process in which new attritors are matched up against the 3 profiles to determine which, if any, best describe them. A more sophisticated approach would be to build predictive models that would calculate the expected ROI for each mailer for each attritor, and then send out the mailer with the highest expected ROI to the attritor. And, for those attritors in which all 3 mailers have negative expected ROIs you might choose not to send any win-back mailers.

Closing thoughts on segmentation
In closing, segmentation can be tricky and complex, and no doubt requires a great deal of expertise & experience. Putting in place flawed segmentation strategies can be far more detrimental to a business than not having them at all. However, when designed the right way, segmentation strategies can provide tremendous returns relative to one-size-fits-all approaches. In future posts I will tackle some other types of segmentation strategies, including those involving new product development and portfolio management. As always, feel free to email me with any of your questions, comments or thoughts. As always, feel free to email me if you have any questions about segmentation and how to most effectively use it within your business.






More posts on segmentation & marketing strategy:

• Segmentation and targeting
• Using the 5Ws for segmentation & marketing innovation
• Using segmentation to develop your marketing strategy
• Marketing Strategy Framework to hang on your wall
• My Frameworks Library - many empowering segmentation tools!

Great books & articles on segmentation:

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An ode to Robert Cialdini... and another tool to print out & tape to your wall (or clip to your fridge at home)

"Influence: The Psychology of Persuasion" is one of my favorite business books of all time.  As someone who has always been fascinated by those factors that most influence behavior & decision-making, I'm naturally interested in the "art of persuasion".  Not to mention the little fact that persuasion, done well and through an ethical prism, is a key success factor for developing effective, sustainable marketing programs.

In expressing my reverence for Mr. Cialdini while still (hopefully) providing readers with valuable marketing nuggets, I've put together a little cheat sheet of his famed laws of persuasion.  For each "commandment", I've included examples of how it is commonly employed within marketing.  However, each of these laws can be leveraged across many of life's little domains - from getting your child into that perfect school to getting bumped up to first class en route from Dallas to San Francisco.  

Enjoy, and please share your experiences with these laws - the good, the bad and the ugly.  Be they related to marketing or how you've employed them in other facets of your life.

CIALDINI LAW OF INFLUENCE	MARKETING EXAMPLE
Reciprocity You giving to me makes me really want to give back to you – I feel indebted. I owe you! Call it a form of closed-loop Karma if you like.	The free trial, an unexpected free gift with your purchase A free whitepaper, free e-newsletter Telling customers you’ve donated $15 to the charity of their choice before they’ve even completed a purchase (there are many ways to engineer this)
Scarcity People hate to miss out on something, even if it’s something they don’t like! Human evolution made us into hoarders, and we can't seem to shake the habit.	The “closing window” – “last chance”, “only one week left!” “Act now while supplies last!” “Here today, gone tomorrow – don’t delay!” “Limited-edition” products – art prints, coins, Barbies, Star Wars figures
Likability We want to do nice things for people we like. We’re also more likely to trust & listen to them. So whom do we tend to like? 1) People we have lots in common with 2) people who love to tell us how great & good-looking we are! (We just can’t get enough praise)	Celebrity & athlete endorsements “Our product is for smart, attractive people, just like YOU!” (Oh, how I blush… keep talking!) Why car salespeople try to learn early on what you both have in common. The closer you feel to her, the more you like her and are liable to trust her.
Authority People wearing nice suits. Police officers. Firefighters. Doctors. We become zombies in the presence of such authority figures in their domains of expertise. “I’ll do whatever you say…”	Power of “Opinion Leaders” – featuring Consumer Reports’ positive review of your product, including an endorsement from Seth Godin on the back of your book (although he has been kind of spreading the wealth lately…) Getting H&R Block to endorse your new tax software or Suze Orman to endorse your new no-load mutual fund)
Social Proof They seem to like it, so there must be something good about it. Aka, “the bandwagon effect”, “wisdom of the crowds”.	Testimonials (especially from people like yourself) Power of word-of-mouth, customer reviews Long lines outside a night club (even though the club is often half-empty).
Consistency / Commitment My current actions must align with my prior actions & commitments. Contradictory behavior makes me very uneasy.	“Foot-in-the-door” technique - getting someone to make small commitments to lead up to much bigger commitment. Getting user to register for free e-newsletter or to become “fan” on Facebook before offering user fee-based offerings.
Contrast We always evaluate our situations using some type of reference point – whether we’re evaluating the “goodness” of our incomes, spouses, children, education, etc. Marketers & salespeople engineer reference points for you for certain purchase settings. E.g., when you’re buying a new car, the salesperson wants you to think about the $1k “option” to install heated tush warmers relative to the $40k you’re already spending for the car, and not the 3% interest you’d earn by instead putting the $1k into your savings account.	For only $19 you can get 6 more inches of legroom for your flight from NYC to LA! The flight’s already $450 – what’s $19 more for 5-hours of comfort? “How about this nice $200 tie to go with your new $2k suit? You’re already spending $2k, why not spend a mere 10% more and make the suit perfect!”

Click here to download PDF of Cialdini persuasion table

How can I start using this information today?

• Clarify your goal or objective.  For example, "I want to increase the ROI on my email acquisition spend" 

• Go through each Cialdini law one-by-one and ask, "How might I use it to improve my email acquisition efforts?"  For example, for "social proof", you may decide to test the inclusion of testimonials or "seals of approval" from leading authorities within the body of your email.  For "likability", you may test emails with imagery of people who closely resemble your target market - from the clothes they wear to the surroundings in which they live.   

No Moral Judgments
A quick side note to those who feel "persuasion" is a four-letter word. To be clear, I'm not looking to generate a forum for moral soap-boxing. These laws exist whether we like it or not; a consequence of human evolution, and without their development we'd likely have gone the way of dinosaurs.  Like Cialdini, I believe these laws can be used for good, for bad, and for everything in between.  At a minimum we should all be aware of them since they do have such a profound impact on our daily lives.  Now that I got that off my chest... enjoy!




More from R. Cialdini plus other great persuasion content 

• Yes!: 50 Scientifically Proven Ways to Be Persuasive ("Applied Cialdini" - terrific book!)

• DishyMix podcast interview with Robert Cialdini

• Great presentation with the supporting audio on persuasive UX design from Andy Budd. 

• 6 elements for creating influential web experiences - copyblogger podcast

• How To Win Friends And Influence People by Dale Carnegie (I consider Dale the grandfather of persuasion, particularly within the work context)

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Another framework to print out and put on your wall at work

Akin Arikan, author of Multichannel Marketing: Metrics and Methods for On and Offline Success, did a beautiful job grafting a digital/web 2.0 layer onto my strategic marketing framework. (His terrific framework is just below)

 


Also, I highly recommend you read his post describing his digital marketing framework so you can get a better understand of the concepts behind it. Powerful, useful stuff.  Very nicely done, Akin!

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