Everyone wants to know what the “drivers of decisions” are in their product or service category. These typically become the basis for innovation, marketing, advertising, and strategic sales planning. The problem is that what they most often discover are not the clues to future growth, but rather the path to becoming a follower in the pack.
Only by looking beyond current drivers of decisions to possible drivers can you uncover the path to future market dominance and sustainable growth. Possible drivers of decisions point to how you can change customer expectations to your favor in a sustainable way.
That means greater ROI on the revenue side. Identifying and addressing these high-ROI possible drivers of decisions leads to significantly higher success rates, dramatically greater price leverage, and sustainably increased market dominance.
When drivers of decisions are measured in most research, what is discovered are the current drivers – the factors currently being considered by customers, because that’s all that are being offered for consideration by the competitors in the marketplace. Customers are being artificially limited to considering those factors, because that’s all there is available.
Even worse, much research on this subject only reflects customer perceptions of what the marketers in that category think is important. What marketers offer and push as being the important factors to consider become the stated drivers of decisions for most customers, even if they are not the things customers would really like to be offered.
That’s why price, convenience, product features, availability, referral of a friend, recommendation of store personnel, and other marketer-defined or marketer-created factors are among the most stated drivers of decisions in any product category. Sadly, none of these factors are what customers really wish they were being offered. And that gap in understanding is why most categories have no Alpha and the competitive situation never gets any better despite constant innovation.
Discovering what customers really want to drive innovation
The only way to discover what customers really want is to understand that there is a set of factors hidden behind the stated drivers of decisions. These hidden factors are the real core of what drives every customer decision. They are also the secret to creating a new future for your company and your category as a whole, which by default will make you the Alpha leader.
Looking at the Alpha pyramid model of how people make buying decisions, there are three sets of factors considered:
First, there is “function,” which could be generally defined as product performance. This is where most marketers start and end their quest for growth or innovation. They look for improvements in technology, performance, features or options offered, new business models, and other “hard” factors that can be offered to attract customers away from competitive offerings.
What we discovered through the entire Alpha Factor Project of research into real factors that create dominant, sustainable success is that function is only the first consideration. And, initially, it is only considered by customers as to whether it meets the minimum performance requirements needed. If it and several other offerings do, they are all considered essentially equal initially. If only one offering does, then it is the only one considered.
Any consideration beyond minimum functional requirement moves immediately into the two mutually supporting factors at the top of the pyramid: “self-satisfaction” (how we feel about ourselves when we buy or use the product or service) and “personal significance” (how we believe others feel about us or value us when we buy or use the product or service). Added features or performance or technology or business models have to deliver more in one or both of these two “ego-satisfaction” factor sets in order to create more perceived “value.” Just because something works better than a competitive product does not automatically mean that customers will perceive it as being worth more.
Any move beyond minimum functionality is a trade up. And any trade up requires one or both of the ego-satisfaction factor sets to be fulfilled better than they are by competitive products.
To many, this may sound counter-intuitive. But most of the Alpha companies I discuss in The Alpha Factor do not have superior functional performance. They provide superior ego-satisfaction fulfillment, and that allows them to not only charge more but also to generate more control and dominance in the marketplace. Harley-Davidson, McDonalds, Wal-Mart, Mercedes, BMW, Tiffany’s, John Deere, and Apple are just a few examples of Alpha products or companies that have little or no functional advantage over competitors but have made themselves capable of maintaining dominant control over customer decisions and even decisions made by competitors.
When we measure drivers of decisions, we always look beyond current drivers to discover possible drivers. The value of these possible drivers to a marketer is immense, because they are the key to creating higher customer expectations that can be controlled and driven by the innovator who created them. A new technology may not necessarily create sustainable new customer expectations, because another competitor may outdo it in a few months. A new, more complete fulfillment of ego-satisfaction that is “proven” through functional performance is both sustainable and immensely powerful.
This concept of driving new and higher expectations is the real key to successful innovation, whether it includes product and technology creation or just new processes and methods to approach the market. Apple has finally broken its self-imposed barrier to becoming an Alpha by allowing itself to meet minimum functional performance (it can now run Microsoft programs more easily and it has opened up its platform to allow more programming among software creators). But what gave it the potential to become the Alpha has always been the ego-satisfaction factors that made it worthy of becoming a cult brand.
Apples’ newest innovations with Macbooks, iPods, and iPhones have not been technology driven as much as they have been ego-satisfaction driven. There are both self-satisfaction elements (from performance, to design, to tactile aesthetics) and personal significance factors (who would believe that someone would squeal with delight to see a Macbook Air, as I witnessed occur in an airport or that you might see people huddled around someone who just got an iPhone?).
The tools to finding these possible drivers of decisions
Finding such possible drivers takes both quantitative and qualitative research. Neither alone can provide enough insight to reduce risk and all but guarantee success.
When we do this kind of assessment, we use a combination of both quantitative and qualitative tools in our Key Drivers and Growth Opportunities Assessment. The quantitative assessment uses a questionnaire based upon what we learned in the Alpha Project to help us uncover unstated unmet needs and unstated desired drivers of decisions at the core level. This assessment shows both what prospective customers wish they could be offered and how they wish it were offered to them. This gives us insights at a predictive level, so we have already segmented the marketplace and determined the potential appeal of such new drivers, if we could address them well.
We then use the qualitative phase as a testing platform to create, test, and modify potential innovations and implementation. Through two stages of creation and testing (using real-time conjoint analysis in a qualitative setting coupled with live recreation of concepts), we not only discover what the solutions should look like, but we can also carry those solutions to the point that they can be implemented quickly and profitably… typically without large investment in R&D and test marketing.
The answer is in the pyramid
Understanding drivers of decisions is only as valuable as which drivers you are recognizing. Current drivers only allow you to see how to be part of the pack, following the leader. Possible future drivers are the secret path to future dominance and sustainable success.
Use the Alpha pyramid, and you can innovate more successfully by driving new and higher customer expectations, which will then become the current drivers of decisions that others desire to copy. That will make you the leader and force everyone else into a following mode. Ignore the Alpha pyramid, and you will only uncover the current drivers of decisions and become one more follower.
To understand more about how methodologies like our Key Drivers and Growth Opportunities Assessment can help you find the real secrets to growth, give us a call. We would be happy to show you how easy it is to see the future.