Sunday, February 3, 2008

Planning on what's next, part II

Returning to the question of forecasting: And just to be clear I'm not talking about a product upgrade or line extension. Not another detergent which you inject into the fabric of clothes for a really deep clean or a new high-energy bar including micro-particles extracted from clouds above the Baltic Sea. The rules on line extensions are pretty clear. And you usually have the package goods machinery to back you up: the concept tests and volumetric projections and prototype usability tests to go on.

But we all know the limited usefulness of concept testing something that doesn’t yet exist. Consumers are famously unable to predict their interest in something they haven’t seen before. I think the most useless focus group question in existence is: “Would you like that?” Sure, why not? Right? But that’s not the topic at hand.

The topic at hand is what do we do when we’ve got nothing: On the conceptual level, you can retreat to the trusty war-horses: “best cases” and arguing from analogy. You turn to Facebook or Wikipedia or reach further back to Amazon. But if you’re used to building conclusions from multiple data sources in specific categories it can feel very flaky indeed to fill up slides with borrowed data, especially when you are staring at a bunch of engineers or VC’s.

Another option is scenario-planning. That way, you don’t feel like you’re predicting exactly what will happen so much as detailing the consequences of a range of outcomes. It enables some conceptual framework and doesn’t feel like an all or nothing bet. Of course, even this involves some prediction. You still have imagine a range of outcomes. And as Societe Generale recently found it: it’s not always easy to imagine what can happen. Scenario planning is best on the big picture. But it’s less useful for helping define the details.

So far I’ve gotten the most traction by retreating to my comfort zone: consumer behavior. Any new product, no matter how advanced, has to be tapping into some existing consumer behavior, generally among early adopters. In the example in the previous post—real-time gastro-intestinal observation—it might be people with serious conditions or people who think they do. Or maybe it’s people with a thing for medical imagery.

In any case, the strategic question becomes how far out does a brand want to lead consumer behavior. The brand can build the consumer base by serving the core behavior of the early adopters and hope there is enough of them or their freaky intense involvement catches on. Or you can identify the mainstream behavior that is likely to see GI imagery has the logical next step in their personal journeys to perfect digestion. It might be Prevention subscribers it might be people with regularity issues.

In any case, they both have risks. If you bet on the early adopters, your position could quickly get marginalized by a fast follower with easier technology. The bet on mainstreaming is a big opportunity but might never come to pass. But in this scheme, you can turn to real consumer data and some attempt to size the market to guide your decision.


Paul Soldera said...

I do freelance research/planning work for clients and a recent engagement had me encouraging them not to do any consumer research for the very reasons you describe. It just doesn't work. Instead, they looked at behavior, looked at attitudes, and launched a small-scale, real-world test that ended up telling them more about the idea than any other method would.

Of course, sometimes this doesn't work as it's cost prohibitive. But the real way to look at it is in terms of opportunity cost. The company in question was an airline, so they weren't dealing with pennies. They just had the right attitude.

Ok, so this example doesn't exactly fit into the 'new idea' box - but it was close.

But the attitude toward the idea was what was important. I see more new tech companies adopting a go-to-market early attitude as well. It's the best way to test anything. And these days much more realistic in terms of cost.

In terms of how far an idea wants to lead consumer behavior, do most ideas really get a choice? I like to think of ideas as water, they sooner or later find their level and it's dam hard to wish them higher - gravity is stubborn like that.

sk said...

great point on research. Totally agree. As one of our clients recently said, "There are no more light-switch brands like in the old days," by which she meant, You can't wait to get everything right before you flick the switch, we pretended to do back in 1998. You need to run and gun, and learn through doing, which is, I believe, one of the IDEO mantras.

Some of the new idea companies I'm been discussing by proxy are already in the market with various beta versions of various things, but hire us, a brand strategy company, when they need to make a big decision about whether to go one way or another. Why? Even when they have market data? To your second point, the early adopters are not always the best indicator of future opportunity. As for ideas finding their own level, not totally sure what you mean, but might clarify by saying, I should have said, products/brands not ideas, which can evolve more quickly.

But i'll let you know how it works out with the product I'm representing with the GI-track imagery proxy.

Paul Soldera said...

Completely agree regarding the light switch comment. Go-to-market strategies have changed considerably, and I think for the better.

I guess by 'finding it's own level', I mean once seeded and propagating (whether an idea, brand or product), you can tell if you're pushing it up a hill it might never have climbed on its own, and so will inevitably fall back down once not supported. I put products like Vonage into this category - an unremarkable product that essentially bought market share. Not a bad strategy, just an expensive one.

I used to work for a beer company that new in the first 8 weeks of launch if a new product was a flop or not. Having gone to market so many times, they new the difference between a struggling product and a star, and could spot it early.

Out of sheer intellectual curiosity, I'd love to get my hands on some of the data you have on new market entrants. I bet it's a goldmine.

belle.me09 said...

Just a comment on scenario planning. I think you might be right that it is not very useful in giving details. However, doing scenario planning means not being caught off guard. When a scenario happens you will be one step ahead of the others. Here's a helpful article on scenario planning which I found in