Customer Crossroads

Reverse innovation: a story that's just getting started

We may finally solve our productivity issues by looking to emerging markets for ideas. [The government and any number of think tanks keep telling me I need to get my productivity up. Pretty much the pot calling the kettle black, but whatever, right?]

I read a marvellous article about this recently, that describes a phenomenon called Reverse Innovation. Here's the definition:

A reverse innovation is any innovation that is adopted first in the developing world.

The innovators could be anywhere, it's where the customers are that is crucial to the distinction. 

Author Chris Trimble, a professor at Dartmouth College's Tuck School of Business, provides some interesting examples that challenge the common assumption that the Third World will "gradually catch up" by adopting products. Kind of a trickle-down approach to development.

The implicit assumption is that their problems and aspirations are the same. Except they aren't.

Logitech mouse example

Prof. Trimble relates the example of Logitech finding itself being outpaced in China by Rapoo. Logitech had a product line that offered increasingly powerful wireless chips only in their high-priced models, because that matches the North American market structure. 

But Chinese consumers are often using a mouse to control a monitor that is being used like a television (or actually hooking the computer up to the tv monitor). Cable is too pricey, so internet video is used for entertainment. A mouse used in this way needs to have a much longer range, only available with the better chip. The other high-end features are not needed for this purpose.

Rapoo, with their better understanding of the customers' needs, provided a stripped down mouse with great range at a low price point.

Change your thinking in five ways

Prof. Trimble suggests five key differences in LDC markets that you need to get your head around if you want to innovate your way to success:

1. The performance gap. Emerging markets do not need your low-end product stripped down and reduced in price. They need a radically redesigned product that delivers good-enough functionality at a radically lower price, matching the disparity in incomes.

2. The infrastructure gap. You can't assume the presence of the same kinds of infrastructure that we enjoy in the First World, whether it's land lines, power, roads, or anything else. Everything from battery life to how to recharge to durability has to be considered from a fresh perspective.

3. The sustainability gap. Environmental concerns will play out differently in these markets.

4. The regulatory gap. Like infrastructure, the systems of regulatory approvals and consumer safety laws are still forming. This can work in your favor or against you.

5. The preferences gap. History, culture, ritual and access to different raw materials has generated different preferences in everything from food to decor to social rituals.

Clean slate product design is the prescription Prof. Trimble offers, and he describes the approach John Deere took to making a tractor for India as an example.He also suggests that teams working in this way cannot also work on First World innovation efforts, because the mindset is so different.

My take

Emerging markets offer tremendous potential for growth, but it isn't a simple export opportunity. Immersion in the customer experience is essential for success, and the kind of innovation needed is more radical than the sustaining innovations that often work in the home market.

Scary yes. But also exciting! Perhaps even fun.

Resources

Reverse innovation and the emerging market growth imperative, by Chris Trimble. Ivey Business Journal, March-April 2012

The great brainstorming debate

Tom Fishburne posted one of his great cartoons on the Marketoonist about the challenge of group creativity. Mr. Fishburne makes the case that we should honor different creative thinking styles [YES!] and that we should recognize that most groups have a tendency to negativity [sometimes, and more on that below].

Poor old brainstorming, such a hardworking tool, and so badly beaten up these days. Reading the post, and the comments, made me think a bit about my own experiences with brainstorming, both as a facilitator and a participant.

Here's my comment on the post, hopefully it makes sense even if you don't read the original post.

As both a focus group moderator, and a facilitator of innovation sessions, I see both sides of this issue, the strengths of brainstorming and the weaknesses.

Clients sometimes hope that consumers (e.g. focus group participants) can come up with the answer to some problem (e.g. think up a new product). This is not likely to happen, and not the best use of the insights of consumers.

There are a number of ways in which a good moderator can help a group. One of them is the anchoring technique mentioned by Bill Carlson in his comment above. This approach forces the participant to consider their own reaction first, before engaging in group discussion.

Another important approach, when having participants look at a new idea or concept, is to get well past the “like it, don’t like it” discussion. Better questions for discussion are things like: what does the idea bring to the table, how might someone use it, what would make it better, etc. In recent years, I have found that consumers are so well schooled in the language of marketing that they will tell me all about how the product is “positioned incorrectly”, or “the execution is weak”, or needs “a fresher design aesthetic” etc. As you note in your article, there is a certain amount of negativity as well, as our “slow thinking” analytical processes kick in.

All of this does not mean that you cannot get great insights from consumers in a group, but it does mean you need clever and thoughtful approaches to setting up the discussion and interpreting what you get.

As a facilitator, I do agree that brainstorming all by itself is unlikely to get you where you want to go. Brainstorming is ONE creative thinking method, and it should not have to carry the full load. It is best used within a framework where we might help the team get immersed in the customer experience, look at parallel worlds (e.g. how others address similar challenges), and a multitude of other methods that prime the pump. These approaches take time, and planning – but they do pay off in a huge way if done well.

What does not work well is pulling people from the middle of a busy workday, plunking them in a boardroom for an hour, and asking them to just brainstorm. The only people who are good at this are those who have a lot of experience with creative thinking work, and can effectively self-facilitate.

Things we only notice when they don't work: the emotional landscape of utilities and banks

 

Life is full of things that we sort of don't pay much attention to until something goes clunk

Utilities are the originals. The gas and electricity we use in our homes, for example, is largely unappreciated except in two instances. One, when we pay the bill and may feel some annoyance at the cost. It's rare that we say,  

"Wow, for only a few hundred dollars, something ephermeral like gas that was formed millions of years ago and lives a mile underground was brought up from the ground, purified, transported thousands of miles, and has now been safely burned in my furnace to keep me warm all winter. Not a bad deal."

The other time we notice a utility is when it isn't working of course, and again, feel mainly negative emotions. Power failures would be the obvious example, but I also marvel at the land-line telephone. The uptime on the phone system is so amazing, that it's remarkable when it is NOT working. A symptom of a larger problem almost always -- a cut cable at the least, worst case perhaps a war-of-the-worlds Martian invasion scenario.

Interestingly, the problems utilities solve for us are big ones, right near the foundation of that familiar Maslow triangle. Being cold. Being in the dark. We are highly motivated to solve these problems, and communities will invest a lot in solving them. But once solved, we quickly habituate to all that warmth and light. We only experience their power in their absence -- irritation quickly building to rage and even fear as we face the elements as defenceless as a squirrel.

Other categories of services tend to behave this way too.

Bank machines do little to charm or endear themselves -- they generate emotion largely when they are out of order or being recharged with cash.

Support services in the business world tend to be that way. When everything is working, that's what we paid for, after all. It's when something goes wrong that we get all "what are you people thinking over there???"

Cloud computing / SaaS is surely in that category now -- a service that we get either for free (but still expect to work pretty much six sigma), or we pay a relatively small cost monthly, in which case our expectations are even higher.

I have to say that there are a few services in the cloud category that have made my life so much simpler I do actually appreciate them a lot -- Dropbox for example. But how long will it be before I am so dependent on it that any lapse of service causes major frustration?

You'll never be loved as a lifestyle brand

If you are in the position of marketing such services, you are working in a rather challenging emotional landscape. Your boss may be telling you they want to be as loved as Apple or Coach, but your reality looks more like the graphic above.

A bizarre flip side of these services is how we feel treated as consumers. We often feel like these providers barely notice us unless we try to leave. Or unless they are trying to gain our business. When we are just dutifully paying our bills, they appear to be as indifferent to us as we are to them.

For example, the phone company and cable company are all excited with offers for you if you'll move from a competitor. But once you are there, that's it. No more freebies for you! Same thing with your credit card company, who was all hot for your business until you moved, and you can no longer get in on all those great advertised offers.

With utilities, customers often feel unappreciated, even taken for granted. The same emotional play is working on both sides. If customers start leaving in droves, it's like the power went down at HQ -- suddenly everyone is paying attention.

I'm reading Daniel Kahneman's wonderful book, Thinking, Fast and Slow. I'm hoping I'll learn some fresh insights into this scenario. If I do, I'll let you know.

Meanwhile, I'll try not to take you, my reader, for granted.

Research industry trends: under the covers in marketing with the GRIT report

Marketing is a function that runs on information much more than most people realize. From the outside, it looks like a beer commercial -- lots of cool people doing creative things. Under the covers, it's much more analytics driven.

Research is a big part of that analytics process -- so research trends tell us a lot about what's going on in the world of business.

Greenbook's Industry Trends Report (GRIT) comes out twice a year and tells the story. There's a wonderful infographic with the current issue, available here. The graphics below are extracted from same - the red circles are things I added.

Marketing wants results -- if innovation gets there, fine. If not, forget it

Innovation is on the list, but not if it compromises feasibility, budget and speed. Nobody in corporate life can afford to take a lot of risks these days -- so they're not trying out innovative methods unless they solve some other problem in a big way.

Social media analytics aren't just buzz -- it's happening

The longstanding buzz about social media measurement is finally warranted. People are using it. Which means that business is taking it very seriously indeed. Everyone is still learning, it's all still changing, but it's here to stay.

Budget isn't everything -- because research questions are getting tougher

Businesses are adopting some very expensive approaches, one of which is MROCs (aka insight communities). MROCs are an innovation that IS solving a problem for clients -- these communities provide more in-the-moment access to people as they go about their actual lives. But they require real skill to set up and manage, and they are anything but cheap.

They may be difficult and costly, but they are working and they are gaining traction. Clients are finding real value there, which is why their use is growing. The growth in MROCs also shows the need for deeper insights -- when you are swimming in data (as most large organizations are these days) what you need is deeper insights. Simple questions can be answered from all kinds of internally available data. What's left for research are relatively difficult questions.

I think Gamification is a trend that suffers from sounding "bigger" than it is -- it is really just making surveys more fun. Focus groups and other qualitative methods have been moving in this direction for a long time -- mostly we call this "projective techniques".

Mobile research is also coming of age, because it is solves a problem for clients (better insights in the moment) and leverages a technology that is ubiquitous. Unlike some of the other methods discussed, however, mobile research promises to be inexpensive (eventually). Mobile will include surveys, in-the-moment reactions on site ("how did we do today?") and mobile qualitative ("take a picture of what's happening right now, and send it to me with your thoughts about...")

This infographic is evidence of another important trend affecting everyone -- we all want information that is easy to consumer and easy to find.

Another great job from Lenny Murphy and the GRIT team.

 

The Secret to Delegating Work

Ben Yoskovitz on The Instigator Blog published a nice piece on delegation, apparently inspired by something I wrote here about the power of a good story.

There's no app for delegation -- but there are some great guidelines, and I like these a lot.

One of the things I have consistently encountered in organizations struggling to deliver a good customer experience is weak delegation. No one is allowed to do or decide anything.

You'll find just the opposite in leading organizations, for the most part. Within clearly specified limits, people can do whatever they think is right, using their own judgement.

Something new for QR codes: social condoms

 

Yes, you did read that correctly.

The phrase "social condom" sounds to me like something that gets you through an unpleasant party without becoming infected with boredom. Apparently not.

Planned Parenthood has created a condom that will let you check in on a social site as a way of promoting safe sex.The site is called Where did you wear it. And you can check in with the code and add too-much-information details.

The condom is not actually printed with the QR code -- the code is printed on the package.

Social marketing is something we're going to see more and more of.

What's the point here -- well, it's an innovative idea. And if you haven't done anything yet with a QR code, you might want to look into them a bit more.

Resources:

Time wrote about it here: http://healthland.time.com/2012/03/01/qr-coded-condom-check-ins-let-you-share-your-safe-sex/

Mashable has a video: (no models wearing the product) http://mashable.com/2012/03/02/qr-code-condoms/