When you build a new house (I am and the roof is on!) how do you maximise value?
School of thought 1 - make it look like a mansion on an estate agents and newspapers adverts
School of thought 2 - build a good house that people would want to live in
and the winner is...... number 1.
The assumption is that there is perfect information for number 2, and of course there isn't and the majority of people wont search for it.
When you build speakers or amplifiers how important is the sound?
In the majority of shops you cannot hear the sound, and what percentage of the public will actually be able to compare? You buy from reviews - and yes as above - the picture.
If you want to buy windows, how many people really know what to buy? Where to buy it from? Or if they go on Google they will find a lot of "3 best quote" sites from businesses run at home by someone that may or may not know anything about windows.
If you are doing research in a traditional way you might get 3 quotes. In today's world you may only get 1.
Quite simply creative destruction is an economic concept that suggests that the entrepreneur will innovate to make new things that will replace the old. Yes this happens, but how many missed opportunities are there?
The team that you work with has a tendency to want to make the best product to give extra value. Alternatively they could think about cost, sourcing from abroad. You can get locked into team discussions, and in doing so forget to look at how the market is behaving, how the customer is buying. In other words a survey says "we want the best product" or "we want the cheapest product", but reality is "we buy what we think we need".
What does this mean? Working with technologists, scientists, engineers, or inventors will get a different product that could be really useful. Many innovations will fail as they don't provide enough value. Others will fail as they cannot define why people will really appreciate their product or service (even if it could). This makes the ones that succeed quite special not because of the product or service, but because of the person or team. The fruits of their labour may have taken some time (not invented overnight), its not just about determination, or a willingness to inform others that the product is really good, but a pragmatism to give what people think they want. (yes this may conflict with what they actually want, and yes you may have to compromise what you offer)
Would you like to buy a battery that has a high failure rate? Possibly not... but if it looks like a good solution will you take a chance and miss a better option?
So how do you give the customers what they want?
Consider the problems that they need to solve, and solve the blindingly obvious ones first.
Where will they look for the product or service?
What will the product look like on the shelf?
Will they understand what your product or service does in the time you have their attention?
How much of a risk will they feel they are taking in giving you (or your brand) a chance?
Will they understand how to purchase?
.... and yes do they know why want it?
and as above - if they want to buy a house - they will want to sell. Do you buy better sound, or do you want to enjoy a new sound system? I have to buy windows, its not out of choice.
