What Comes First: The Product or The Consumer?
Thanks for checking out Stage 1 of Drafting InEchelon. The route this week attempts to answer the question as to whether, for a company, the product or the consumer comes first.
A good friend of mine, who was also one of my favorite managers, told me a brilliant story about an interview he had with an iconic CEO who leads a world class consumer products organization.
The CEO asked him, “Does the product or the consumer come first?”
While my friend was thinking it over the CEO continued — “85% of the candidates that I interview answer the question incorrectly.” Umm, wow, that’s scary!
The consumer, according to this iconic CEO, absolutely comes first and my friend got it right which is not surprising as he is a talented marketer and smart cookie.
You are probably thinking; “Of course the consumer comes first!” Well, congrats, that makes you a smart cookie too. Clearly, however, a fair number of people working in the consumer products industry would seem to believe that products come before the consumer at their company. That is not a good thing.
When I co-founded TRUE linkswear in 2010 our company created a product that was based on a very clear consumer insight we had about a golfer’s desire for more comfortable golf shoes. In fact, before we even considered raising capital we confirmed the insight with a survey of our core demographic. To make the shoes more comfortable, among other elements, we developed a “spikeless” sole. The “spikeless” insight, which Ecco also launched in 2010, was so compelling that three years later that type of golf shoe accounted for about 50% of the US Golf Footwear Market and every major brand was competing in the space.
So why does it appear that so many people in the consumer products industry believe that product leads and consumers follow?
One hypothesis is that focusing on “product first” is easier. If a company makes products then products should be the focus right?
While Consumer Insight Gathering and Analytics has long been important for most “best in class” companies it can add an unwelcome layer of complexity to the product strategy, design, development and marketing process for some fast moving organizations. It can also call into question the “industry knowledge” and “gut instinct” of a range of people in the company from product to marketing to sales to outside agencies to executives who, frankly, believe it has minimal value because they are “the experts.” The danger of getting stuck “inside the bubble” and perpetuating this type of “we know best” attitude can be problematic, especially in industries where product launch cycles are fairly established and an inability to inspire consumers and drive sell thru will lead to painful inventory management problems, markdowns, close outs, lack of profitability and, potentially, corporate restructuring. A lack of interest in the consumer’s point of view can result in years of poor performance and even the demise of a brand.
Another hypothesis is that people, especially leadership, believe that Consumer Insight gathering is too expensive for the ROI. Without a doubt, it can be costly to set up sophisticated insight gathering systems and strategies, although I have seen smaller companies develop wonderful processes on a shoe-string budget. At a minimum, companies should be encouraging and supporting the presence of their Product Marketing teams in the field to gather insights through feedback from consumers and retailers, along with those gained from Social Media, eCommerce and Customer Service. I have seen, on many occasions, the amazing impact that basic consumer and account interaction can have on product strategy, brief creation and go to market planning. Including, quite literally, the power to help catalyze a business turn around.
Most companies, based on my experience managing Product Marketing and Consumer Insight teams, would be well served by deploying at least 5% of their marketing budget on Consumer Insight Gathering and Analysis. The investment will help ensure that product briefs (price, positioning, competitive set, etc.) and go to market strategies align with the target consumer which will allow the remaining 95% of the marketing budget to engage and inspire those core customers to drive sell thru.
The final, and most frustrating reason, I hear people push back on consumer engagement is that “they don’t know what they want.” For example: Consumers did not know they wanted a car instead of a horse, a computer instead of a typewriter, or an iPhone instead of a cell phone. Really? All of these ideas brought to life very specific and timely consumer insights that can be generalized as “people are open to products that make their lives easier or better.” Yes, it can be challenging for consumers to see past the status quo, but understanding their wants and needs is what allows for not only iterative gains but revolutionary leaps in innovation and brand success.
The goal of consumer insight gathering is not necessarily to specify exactly what a product should look like or what the performance characteristics of a product should be. It is to engage and listen to consumers so we can understand what they like about a current product, what could make it work better for them, how they think the benefits could be communicated effectively, etc. Once ALL of that information has been compiled and analyzed, then it is time for the Product Marketing, Design, Development and Brand Marketing teams to strategize creatively on the trends in feedback and use that information to influence product and GTM strategy. Three cheers for left brain/right brain thinking!
It is amazing how often companies appear to put the cart before the horse and take an R&D concept, design sketch or product idea, build it and then try to develop a consumer engagement strategy. That is incredibly risky.
Instead, Consumer Insights should accomplish the following:
- Assist in guiding Advanced Innovation strategies and concepts along with any thoughts or plans to extend lines or move into new categories
- Provide Product Marketing teams with information that will lead to the creation of thoughtful, insightful and complete product briefs which construct a framework for Design and Development to excel
- Provide Marketing teams with meaningful feedback and ideas that can be used to develop and enhance the brand while shaping go to market strategies that will “surprise and delight” consumers resulting in strong product sell thru and brand awareness
While the product versus consumer topic is worthy of a book, and I am sure that there are several written about it, at the end of the day I believe that the answer as to which should come first is a simple one.
A company that puts the consumer first will achieve a high rate of success because knowledge is power. Listening to consumers and retailers while learning unemotionally from competitors and market trends is a recipe for consistent growth and profitability. Not every product will be a home run, but a defined “reason to exist” for every product in a line plan is an excellent foundation to build upon.
A company will very likely struggle if they create products in a bubble, fail to engage and understand their core consumers or stray from the foundational insights that made their brand and early products successful. The latter is a recipe for disaster that happens time and time again, often due to unrealistic business growth expectations or forced product launch timing requirements.
“The Consumer Decides” is the 5th of the 11 inspiring Nike Maxims and it seems like a good place to end the Stage. I totally agree with Mark Parker’s sentiments in the quote below because they are so true; Consumers have never held as much power as they do today and companies need to engage, listen to and love them.
MAXIM #5 — The Consumer Decides:
“Consumers have never held as much power as they do today. They have more choices and more access to those choices. They connect and collaborate with each other (all) over the world . . . Clearly, the power has shifted to consumers. For every Nike employee, there’s ten million consumers out there deciding whether or not the products and brands we offer really matter . . . The ability we have to connect with consumers is the single most important competitive advantage in business today . . . There is no substitute for connecting with consumers.” — Nike CEO Mark Parker
Thanks again for reading Stage 1 of Drafting InEchelon! I promise there will be more pictures next time, because everyone loves pictures . . . right?
Stage 2 of Drafting InEchelon will discuss several companies that inspired consumers in 2016 by leveraging compelling insights to capture their attention, build brand equity and increase demand for their products.