Business Design In Practice (4/4)
A Guide To Business Design | Part Four of Four (4/4)
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There’s no better way to wrap this series up than to give you a real example of Business Design in practice. Without further adieu, here’s the story of Resonate, a recent client of my company Imagineers.
Resonate Health
James has a vision to transform how people access and engage with hearing healthcare. As the ex-CEO of the major players in the Audiology market in Asia Pacific, James knows the industry inside and out. He’s seen it all. His insight is everyone needing hearing augmentation should be using top-of-the-line hearing aids, yet the price tag of $10,000 is prohibitively unaffordable for most people. James’ startup, Resonate, aims to put people first and disrupt the hearing health industry.
Here’s how it works; Resonate gives people access to the absolute best hearing aids (and only the absolute best) for a monthly subscription of $90. No more having to pay $10,000 up-front. As part of their service, customers get free upgrades every three years, free servicing, unlimited support, and the entire fitting process is done in just one appointment. Take the devices back anytime to cancel for free, no strings. Pretty cool if you ask me.
James partnered with a group that owns significant retail and restaurant businesses in New Zealand, securing funding and support to launch the first group of Resonate studios, and he asked us to help with the go-to-market strategy. As Creative Strategists and Business Designers, we don’t immediately hear ‘go-to-market strategy’ and jump into creating a marketing or advertising solution. We aim to truly understand customer needs and market dynamics to gain insight into how we can disrupt the category at scale.
Remember, the true goal of business design is not to compete — it’s to make other business models obsolete.
Yes, we still need to do marketing and advertising, but I believe the best marketing strategy is to market the truth in unique, compelling and emotive ways — from why you exist to what you offer and how it works — and so we started by asking ourselves “what should the offer REALLY be?”.
Here’s the process we used to get started:
- Analyse: Market analysis, research and discovery. Speak to real people. Put yourself in their shoes. Learn about the industry. The more information we can gather, the better.
- Synthesise: Based on what we find, what can we learn? We make observations and search for insights that will enable us to understand problems, consumer needs and market dynamics.
- Hypothesise: How can we solve these problems and shift the market dynamics in desirable, feasible and viable ways? What’s the target business design at a high level?
Here are a few of our key insights and observations:
- The traditional Audiology market is all about selling hearing aids. From what we could see, the Audiology being practised was primarily in the form of free hearing tests used to sell hearing aids. This isn’t the fault of Audiologists; it’s simply how the major businesses make money. To align with James’ vision, and because we’re real human beings, we also wanted to put people first; we felt strongly that Audiology needs to be about health, not sales.
- James asserted that the 55–65 and 65–75 age groups were the real opportunities for his subscription service; however, if you plot need on one axis, and willingness on the other, the need in these groups is high, and willingness is low. The reality is most people don’t want to wear hearing aids. Things need to get pretty bad before people become open to the idea, which is why 75+ is the usual market for hearing aids. A single marketing campaign isn’t likely to convince anyone they need hearing aids if they’re not already in the market for hearing aids.
- There are some alarming statistics many people don’t know about hearing health. For example, even mild untreated hearing loss can double your risk of dementia. We felt a real need to raise public awareness of these issues.
- We felt that Resonate’s subscription model, whilst fantastic in its own right, wasn’t enough to build a leading brand around. In our minds, something was missing. A subscription-based service alone didn’t feel as compelling or defensible as we’d like. We felt Resonate needed more.
- As is often the case with startups, and certainly not unique to Resonate, the targets we’d been given versus the go-to-market budget didn’t stack up. Great ad creative can go a long way, but you have to be able to buy the media to get it out there, especially with the state of the algorithms right now. There wasn’t a killer campaign that would work here. The business first needed to establish a strong brand, service and foundation for disruption.
We used this process to form a hypothesis for Resonate’s Business Design:
- What creative territories can we own as a brand?
- What creative territories are relevant to each prospective audience?
- What compelling offer intersects each creative territory and audience?
We devised an array of creative territories that had merit. These included ‘$3 a day’ (price focus), ‘Netflix for your ears’ (subscription focus), ‘Fitbit for your ears’ (technology focus), and ‘Superhuman’ (experience focus). As we considered the different audiences, the distinction between people in the market for hearing aids and people who aren’t, which was most of the demographics we’d been given as the target audiences, was painfully clear.
There’s a big difference between capturing current demand and creating future demand. How do we create demand for a solution people don’t want today? How do we put the business in a position to be successful without the funding to take on the big players directly and carve out market share through clever advertising right now? How can we create a competitive advantage with Branding? How can we effectively market Resonate’s subscription service to audiences who will buy now and lay a foundation for creating future demand?
By matching creative territories with audiences, we allowed ourselves to imagine what the business would look like in each scenario. Remembering that Business Design is all about going from the current state architecture to the future state architecture, this is where we define the future state.
We landed on three different conceptual business designs:
- Traditional: Compete with existing market players for existing market demand.
- Evolutionary: Evolve the market by selling to new audiences not serviced by existing players.
- Revolutionary: Leverage existing market demand elsewhere to create an entirely new market.
- The Traditional design aimed to beat the competition at its own game with better customer service, branding, design and a unique pricing model.
- The Evolutionary design aimed to become a full spectrum ear and hearing health business; its primary service focus is an innovative health profile to give people a clear snapshot of how healthy their ears and hearing are, regardless of age or need.
- The Revolutionary design aimed to transform market perception toward the idea that hearing augmentation devices are the best headphones you can buy, both from a sound quality and technology perspective, with the massive added benefit of preserving and augmenting your hearing health. Health meets technology meets performance.
Read more about each design below. These images are taken directly from the deck we used to pitch James and the Board.
It was the Evolutionary design that we liked the most. It was a foot in both worlds, so to speak. I’m the type of person who spends a lot of time in headphones or listening to music. I’ve done my dash with parties and festivals. I have no idea how healthy my hearing is, and I damn well don’t want to wear hearing aids if I can avoid it. I’d value proactively getting my ears and hearing checked.
And so, we invented a concept for a service called Ear360™.
Ear360™
The concept for Ear360™ was simple — we wanted to create the world’s most comprehensive ear and hearing health profile, analysing 10 points of ear and hearing health, including all the stuff you’d expect, like audibility and intelligibility in noise, but also things many people don’t know are associated with their hearing health including memory, sleep and balance.
Our market analysis led us to believe there would be substantial market demand for such a service, and we felt that Audiology as a field of medicine deserved to be about more than just selling hearing aids.
Here’s the kicker, though— the real ‘disruptive’ bit — we wanted to sell Ear360™ for $99. Audiology isn’t retail. This was risky. A health service like what we imagined has never been sold.
Our logic was pretty simple; we didn’t think another free hearing test model would move the needle, and we knew there was a clear gap in the market. We felt that a premium, proactive health service designed by the best Audiologists in the country was the answer. The market was ripe for change. We had identified an untapped opportunity to bring Audiology services to new audiences. We wanted to help everyone with ears take care of their hearing health, not just people who need hearing aids (plus Resonate already has a solution for these people).
Hearing health is essential to overall health and well-being, but it’s often overlooked because there isn’t any option for proactive professional profiling. Creating a premium health service and charging for it wouldn’t just make it distinctive for consumers; it raises the bar for credibility from the medical fraternity. We wanted to allow Audiologists to practice their craft. We wanted General Practitioners to recommend Ear360™ to their patients. We wanted to let people know that a free hearing test isn’t a proper health solution, and now they can get a clear and accurate picture of how healthy their ears and hearing are with Ear360™.
Below is an early prototype for Ear360™ designed by Craig, Resonate’s lead Audiologist. Craig masterminded the Ear360™ audiology formula to bring our concept for the service to the market.
One of the goals we had to work with was supporting sales of Resonate’s subscription service, and we designed Ear360™ to be a passive lead generator for Resonate’s core hearing aid subscription service. We asserted that new audiences are far more likely to come for a paid proactive health service precisely because it departs from a free hearing test.
When someone completes an Ear360™ and discovers issues that hearing aids will solve, they can immediately get fitted and walk out the door by signing up for the $90 monthly subscription service. If they don’t like it, they can return the devices and cancel with no strings. Game changer?
We pitched James and the Resonate Board the Ear360™ idea, and then it was game on. The focus on Ear360™ was a BIG change, so a tonne of work to be done relatively quickly, from creating Ear360™ itself to brand architecture and identity design to communications to new studio designs, website, new budgets and financials, etc. We worked with Resonate and their partners to make it all happen for launch.
Here are a few more essential points about Resonate’s Business Design:
- We knew that by gathering unique health data via Ear360™ (in secure, private and compliant ways), we could create unique data services, applications and algorithms that could act as a new generation of products and services. Applying machine learning to unique proprietary data will create numerous disruptive opportunities.
- We knew that by making our focus ‘ear and hearing health for everyone’, not just 75+, we would be able to have conversations in the market and that the existing players couldn’t because no matter how hard they try, they are in the business of selling hearing aids, not looking after people’s ear and hearing health for life. We devised the idea of healthy ears and hearing for life and used it as the foundation of Resonate’s brand architecture.
- To help the business win the search game, we also devised ‘Ear A-Z’, a repository of information related to ear and hearing health for their website, which in time will generate greater brand awareness and traffic organically, reducing the need for actual ad spend online, and support the brand in its mission to help people have healthy ears and hearing for life.
- The Business Design discussed in this article was developed by myself and Andrea Price (Pricey!). Many others contributed to bringing the business design to life — James, Kim, Craig, Matt Z, Murray, Jess, Elliot, Sophie, Scott, Shannon, Justin, Guy, Vaughan, MJ, Becky etc — you know who you are. Apologies if I’ve missed anyone.
Resonate today.
Resonate’s first six studios are live at the time of writing, and many more are planned to open in the next 18 months. You can check out Ear360™ on the Resonate website, and if you’re in New Zealand, book Ear360™ to experience it for yourself!
Update: as at 1 June 2024, Resonate Health has opened 20 studios in New Zealand!
Watch the Ear360™ explainer video.
Here’s what James has to say:
“We love Ear360™. Our mission is to put people at the centre, and Ear360™ is an expression of everything we stand for as a business, brand and team. The focus on Business Design has transformed and enhanced our commercial strategy and results. It’s not just customer feedback and the potential to use Ear360™ around the world that’s exciting, it’s the fact that it’s attracting the best-of-the-best Audiologists to work with us. Ear360™ reignites their passion for Audiology. I started Resonate with a clear vision of how I wanted to do things differently and improve people’s lives. Ear360™ and the Business Design we’ve invested in brought our ideas about change and transformation together, and crystallised them into a service that we’re immensely proud of.”
— James Whittaker, CEO, Resonate Health
Here’s an actual quote from an Ear360™ customer:
“I recently had an ear360 at Resonate… I was very pleased with the entire experience and glad I decided to make an appointment… I had no idea that my hearing, balance, sleep, memory was so closely linked together. The session was very pleasant and informative… The equipment they use is top notch, and it’s clear the entire team has a wealth of knowledge and passion for their work and truly care about their patients and the community. I highly recommend everyone get in touch with Resonate team”.
And another:
“After having some tinnitus issues I was please to see that Resonate had opened… It was simple to book and worth every dollar to have the care and attention to detail in regards to testing my hearing. Extremely knowledgeable, friendly and compassionate care was what I experienced… I was grateful for the ease of understanding the impact of my results with the 360 mapping chart along with the audiologists’ very helpful assessment. I highly recommend having an appointment to put any concerns to rest and to make a plan moving forwards, it was a breeze and I’ll be back in future to monitor my hearing with 100% trust. Thank you team Resonate”.
The local, national and global prospects for Resonate are enormous. It’s been a lot of fun helping James and his team disrupt the market, and the disruption has only just begun. Keep your eye out for Resonate.
A final note:
You may notice we didn’t explicitly use the frameworks or methods I outlined in Part Two of this series. We were originally engaged for go-to-market strategy, not Business Design, so we used a brand/marketing-led approach in this case. The thinking behind the aforementioned methods and frameworks was undoubtedly in my mind as Andrea and I collaborated on the strategy; we just made a remix to suit our needs at the time. I’ll definitely use this territory/audience/offer approach again, and I may even expand upon it in the future. Feel free to try the process for yourself.
The challenge for business designers.
While Resonate sought us out for a go-to-market strategy and not explicitly Business Design, it was Business Design that James and the company needed. This highlights a common challenge for Business Designers — Business Design itself is not something many clients explicitly ask for.
To illustrate the pervasive need for Business Design, let’s take a look at what CEOs and Directors are focussed on in 2023 as per the 2023 Deloitte CEO survey:
- CEO optimism is on the upswing, and pessimism is down, surpassing June 2022 levels — this may suggest CEOs did not anticipate or fully account for evolving market events that have transpired over the past month.
- CEOs are prioritizing core business transformation and new product and market innovation with a recognition there will be a strong dependence upon acquiring the right talent and digital maturity.
- CEOs appear to be taking a pragmatic approach with AI. While they recognize the compelling need to invest in and more deeply understand AI, their organizations may not be fully prepared to take advantage of more emerging applications like generative AI.
In all these cases, Business Design has a role to play. It’s common for businesses to recognise the need for digital and business transformation, a focus on customer centricity and experience, and even specific technologies like Cloud or AI, but it’s still rare for businesses to recognise their need for Business Design capabilities.
I hope that A Guide To Business Design helps to bring more awareness to the need for and power of Business Design.
Final word.
Make no mistake — Business Design IS business strategy. The way a business is designed will directly impact its performance. If you want better business performance, it’s time to invest in better business design.
Excellent Business Design will generate more significant revenues and create happy customers, shareholders and staff while putting businesses in a better position to positively impact communities and the environment.
As an established business, you don’t have to start from scratch; the best Business Designers will preserve, augment and enhance all the good things your business is doing whilst evolving and optimising your model.
The future will be better for everyone — if we design it to be.
Update – As at 1 June 2024, Resonate Health has opened 20 studios and are moving from strength to strength. Well done team!
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This article is one of a four-part series focused on Business Design. Part One is an introduction to Business Design. Part Two is an overview of relevant frameworks and methodologies. Part Three discusses the relationships between Business Design, knowledge and technology. Part Four is a case study of Business Design in practice.
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