Brands need to move away from finished products and get closer to dynamic and open-ended solutions through intense engagement. Are you ready for the era of the ever-changing product?
Supply & Demand
The traditional view of markets in economics is clear: companies are responsible for the supply of goods while customers for the demand. The supply/demand model focuses on different entities, with different goals and different gains. The only meeting point is a theoretical (imaginary, artificial?) equilibrium based on quantity and price. It’s not hard to see that this transaction-based model involves more conflict than collaboration, more interest-protection than interest-sharing.
But is this still the case today? Consider for a moment what US-based authors and consultants, Heskett, Sasser and Wheeler, are saying for some time now:
“Treat customers like employees and employees like customers”.
In the light of the supply/demand mindset this is nothing less than a revolution. It changes everything we traditionally knew, destroying the dividing line between the two. No more separate entities, separate intentions and separate actions. Customers now help companies to improve their assets, processes and products, as if they work for the company, while companies treat their own human resources as if representing the demand side. Supply and demand are blending into one. Companies and customers (Supply & Demand) working together as partners under a common vision and with common goals.
Products, the Center of Marketing
If you were ever formally trained in marketing, you will probably remember the marketing mix concept of the 4Ps. The model was conceived in mid 60’s for explaining, in a straight-forward way, what marketers were doing daily. It consists of four basic elements: Product, Price, Place, and Promotion. Regardless criticism against the model and numerous alternatives in marketing literature (4Cs, 4Es, 4Ss, 4Ws etc.) 4Ps have proved surprisingly resilient and are still present in marketing books and classrooms around the world. It’s not by accident then that, taking into account the supply/demand divide, the first element in the marketing mix model, and in almost all other models, is the product, service or experience (the last one usually representing a combination of the first two). Without a product, service or experience to sell you have nothing to put a price on, to distribute or to promote. The first P, Product, was the beginning and the center of all marketing.
But what if the product/service/experience does not exist anymore as it used to be? What if companies are not selling fixed products anymore but dynamic solutions that are constantly evolving and changing with the active participation of their customers?
Dynamic Products, Never Fully Completed
Kanye West, the celebrated and controversial artist, launched his latest music album on the 24th of February 2016, few days after a grandiose launch event in New York. Even after the official launch and the first purchases of the album, West is reportedly still working on the album, tweaking its elements to produce a better musical product.
This would make very little sense to a seasoned music executive. Music albums were always conceived, produced, released and then supported by tours in separate, sequential and somewhat rigid phases. Yes, remixes existed and an occasional album got a production makeover decades after its first release, but albums were always ready-to-market products. Kanye West has changed that overnight. We don’t know yet if his move will be successful. The main point though is that, with all the problems the music industry is facing with album sales, West has probably started the future of a new music paradigm: the never-finished, ever-changing, dynamic music album.
Music is a digital product so the same approach could be applied in other digital products too. Indeed, computer software and online games are sold (or “shipped” in the software development jargon) when they achieve a certain level of completion and improvement updates/upgrades are constantly downloaded as people use them.
But can this be done with physical products as well?
Tesla, the famous car brand, faced a serious problem few years ago with fire in its vehicles. Traditionally, car companies solved such problems with massive recalls and huge costs. Not to mentioned the blow in brand confidence among customers.
Tesla solved the problem with a simple upgrade of the car’s software transmitted into the car. The upgrade changed slightly the car’s behavior when driving in a highway and eliminated the chance of fire. This is revolutionary, showcasing that the Internet of Things (IoT) is changing the view of what a finished product is. Physical products, when connected to the internet and with software as an integral part, are now able to change, improve, evolve everyday.
Developing a new concept, producing it, selling it, servicing clients, and then going into the whole process again is not how the future will most probably look like. Conception, production, usage and alteration will be combined in a seamless processthat will involve all of us constantly and actively. Customers will be invited to act as company employees all the time.
Quality is NOT a Standard
However, if products are not fully finished how can we ever measure quality? Shouldn’t quality be a standard to check all output against? Quality control, total quality management and relevant qualifications were based on the simple premise that you first need to set quality standards and then to measure your actual products/services in relation to those standards. Any output that did not meet the criteria was disposed and “zero defects” was a dream of many organizational and production professionals. Consequently, quality control evolved as a major component of management. All managers do it.
But is quality the same in this new era? Not at all. James Freeman, CEO of the Blue Bottle Coffee Company, has stated that he does not want his people to have a quality standard trying to fit into it daily when they serve their clients. Instead, he prefers his people to constantly improve, evolve, re-invent the quality of the offered coffee and of the experience of their clients in his shops. Quality, not as a standard but as a dynamic tool, fits better the challenges of businesses today.
This actually means constant variation in quality. Many managers could get a heart attack only by hearing this… the risk seems too high to allow this to happen! It actually means that we need to trust our employees deeply for them to deliver such a constantly changing, evolving, re-invented experience every day. Can we do that?
Why not? If you start treating your employees as customers, engaging them actively and emotionally inside the company, it will actually boost your engagement outside the company. So, quality is NOT a standard. It’s a living-breathing memory and expectation in your customers’ brain every time they interact with your brand. Work with it and revolutionize it by allowing your people to do amazing things… or standardize it and kill it.
What Should We Do?
Attitude. Regardless if you are selling products, services or experiences you need to start considering them as an unfinished, work-in-progress, as-good-as-it-can-get-now offer that will drastically improve by constantly engaging customers and employees daily.
No Hostage Clients. If you are a bank, a telco, a consultancy or a university try not to sell your clients a service only to keep them hostages through a binding contract. Reinvent your service and their experience on the go, utilizing their input, regardless of what the contract says: offer to them better conditions often.
Take Control. As per my previous post, marketers need to lead such transformational changes within companies. They cannot just take the back seat and wait for others to provide the vision, strategy and passion. This is hardcore marketing stuff and marketing departments should act accordingly.
Listen Closely. In order to constantly identify your customers’ new wishes and potential problem alike, you need to practice more minute-to-minute marketing intelligence and less traditional marketing research. Try avoiding key misconceptions in online intelligence and you will become a better listener.
Minimize Scripts and Standards. Almost all companies develop scripts for their frontline staff as well as quality standards for their processes. What if quality consistency and process predictability are killing innovation and awesomeness? Hire, train, nurture and retain amazing talent to be able to minimize scripts and standards. That’s the only solution. Actually, there seems to be a negative correlation here: the less the management trusts its people’s talents the more it needs standards and scripts. Think about it.
Engage, Ship, Engage Again. Customers should start “working for you” very early in the development process of every new product and service. You should then ship/launch the product or service sooner than later… and then continue working with them in the eternal process of reaching perfection. Most innovation and R&D models fall short of recognizing this.
Be Honest, Transparent, Relational and Playful (HTRP). In order for customers to want to engage with you, or “work for you”, they need to see you as honest (you do as you say), transparent (not withholding key info from them), relational (you pursue long-term, win-win benefits) and playful (always excited to try new things with them). Apply the HTRP approach to your employees first. Choose HTRP over RIP!
Disrupt. In the case that constant product improvement becomes slow, ineffective and complacent consider throwing the whole thing away and starting afresh. This is actually much easier if you are not emotionally attached to a specific finished product but to a never-ending path to greatness.
From Satisfaction to Symbiosis
There is always going to be some room for finished, closed-ended products. Even in such cases though, we will still see a much higher degree of collaboration and engagement in almost all steps of the process.
The more you engage customers to help you solve problems, improve offerings, and re-create products on the go, the more their brains will relate to you, accept you and even love you. Love and loyalty do not come from satisfaction. Satisfaction is sterile, lukewarm and expected. It is a supply/demand related concept. But today, in super-competitive markets, people are spoiled for choice and satisfaction is a necessity, not a competitive advantage. Go beyond satisfaction, beyond finished products and beyond standardized quality, and deliver constant innovation together with people: your customers and your employees. Go from supply/demand thinking to symbiotic living and working. We can do so much more together. Open innovation, open source coding, crowdsourcing and crowdfunding, design thinking, even IKEA with its assemble-it-yourself furniture, are already well-accepted concepts of a modern business ecosystem that blurs all possible division lines. What’s stopping you?
Dr Nikolaos Dimitriadis (PhD, MBA) is a Certified Neuromarketer and the author of the book “Neuroscience for Leaders: A Brain Adaptive Leadership Approach” (Kogan Page). He works as the Development Director at The University of Sheffield International Faculty.