Innovation first? No! Simply Be Better.
Frank Buckler
Founder & CEO, CAUSAL AI Pioneer in Marketing ?? Addicted to "The Joy of Finding TRUTH"
Originally published on?www.cx-ai.com/newsletter
Differentiation and innovation are wasteful exercises when not focused on the basic category need. Instead, innovation should be concerned with becoming simply better at what customers, in essence, care about most. This is the learning of large-scale decade long marketing science research. Mostly overlooked is the crucial role of the ability to find those often hidden basic needs of a category.
Inspired by a recent guest of my podcast “Insights Rockstars” I am sharing here an amazingly important route of thoughts for Customer Experience professionals.
Although customer experience has gained importance in the last two decades, there is always debate about its value. CX has the image of incremental and minor improvements. As opposed to strategic product and business model moves, it might feel like just a “must do” but not the thing where you are winning the game.
Even worse research proves -known as the double jeopardy law- that big brands, by definition, have more loyal customers. It is an inevitable fact that the best strategy for loyal customers is to acquire market share. Market leaders do have better NPS scores even if their performance metrics are not leading. (just one of many reasons why benchmarking is a dysfunctional exercise)
Before you now stop reading and start quitting your CX or insights job, bare with me ??
The magic of great customer experience is not to be the delighter or to provide an emotional cream topping. The magic is that a great customer experience evolves AT the moment when you perfectly meet customers’ basic category needs. Here is why.
“Great CX creates competitive advantage. The consequences is brand and loyalty growth.”
Worlds largest and most reputed marketing science institute is the Ehrenberg-Bass Institute which builds its work on decades of global research, first led by Andrew Ehrenberg and Prof. Bass. Worlds largest brands, like Coca Cola, Colgate-Palmolive, Mars, or Unilever,? now sponsor this institute – a proof for its practical relevance.
A core fundamental law they discovered is that consumers do not seek differentiated or even unique products and services. They simply choose a brand that best satisfies the basic needs that a category is supposed to satisfy.?
Being able to do this consistently better will create a competitive advantage, will make customers come back, and will grow your brand.?
Customers may better recognize and remember distinct advertising and packaging, which may lead to more sales. But when it comes to the product and services, being different does not count – being better does.
Many brands that we think have introduced disrupting innovations, in truth have been incremental. Pampers just evolved as an improvement of a competing niche brand. The whole concept of Apple is to make devices more user-friendly and pleasing. All their successes had been incremental improvements, not disruptive inventions.
The Three Fundamentals of CX Strategy
All boils down to three fundamentals that you need to follow to succeed
1. INSIGHTS FIRST
Truly understanding what customers’ basic category needs are, is the foundation of every success. This sounds trivial, and it is where most companies fail because they underestimate the deceptive feeling of “knowing it all”.?
German beer brands, for instance, have been in the markets for centuries. It turns out that most of them still do not understand the core need behind a standard beer consumption: a refreshment drink for adults. A standard beer is not a craft beer that is consumed like a good glass of wine. Its main purpose is to be refreshed.
How can brands gain such fundamental insights? Asking customers? What customers answer is biased and superposed by many others things. Customers -especially in low involvement categories - are hardly aware of why they consume a product or category.?
Still, it is possible to find out. All starts with the understanding that this – like most important insights – is a question of cause and effect. What causes consumers to drink beer over wine, Budweiser over Becks??
It requires a causal analysis. Not just descriptive data, correlation, comparing groups, or just doing qualitative exploration. Luckily applying Causal AI is a common practice in insights. E.g.? www.cx-ai.com? is an approach that even integrates qualitative feedback.
2. BECOME SIMPLY BETTER: Be Better at Product & Service
Ones you know what’s important from the customers’ implicit viewpoint, you can start to work on this. This work should become a strategic long-term focus. Focusing means saying “no” to other relevant topics.?
A global leader in industrial packaging sticks in my mind. We took a look at customer feedback with the lens of finding the essence of the industry.?
Originally we were thinking of the company having a broad product range, being cost-competitive and have flexible delivery process is key in the industry. Oh boy, we were so wrong.
We finally understood that it is all about safety and security. Industrial packaging mostly carries nasty chemicals or other expensive liquid products. Any leakage, any delivery problem, any stacking issue, or any deviation from a norm is causing massive problems for the buying decision-makers and their stakeholders.?
In essence, most buyers look for “the safe choice”.? Along the way we needed to realize that “the safe choice” can not be just marketing claim and must be a commitment and promise towards the customers. It turned out that “the safe choice” needed to be an internal product and service strategy first.?
Just in a second step, it could become a positioning in communication.?
3. NO COMPROMISE?
While its key to simply become better in what really counts for customers, for communication, another topic kicks in.
Communication job is foremost to achieve that your brand is recognized and considered in the moment of purchase. This is done by being rememberable, by being distinct in all kinds of simple aspects.
This does not mean that your product or services should be distinct. It is of most importance to detangle and not mix both tasks.
CX Is The Winning Factor
Customer Experience Management is the holistic management of customers’ experience of a brand’s products and services.
As such the research described in this article suggest that CX Insights is the key enabler in developing a competitive advantage, which in turn will result in brand growth and loyal customers.
CX professionals are advised to use this route of thought to convince the company of the true cause of growth and prosperity
It takes?
Thoughts?
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