Thursday, November 17, 2005

Chapter 6: Step Two: Decide What New Measures Are Needed

Chapter 6
Step Two: Decide What New Measures Are Needed

The material in this chapter expands upon pages 149-162 in The 2,000 Percent Solution.

Having used the questions in chapter 5 to find nth degree opportunities for the future, it’s time to return to the five best ways to grasp the opportunity you selected. So far in the workbook, you have been encouraged to expand your thinking and to be open minded about what you considered doing. Beginning with this chapter, you will be doing the opposite: Taking a critical look to find out what’s practical … and what’s not.

You could fill many shelves with business books that report how new strategic directions fail because those in the organization did not understand the new direction and lacked either the skills or the resources to create the new direction. Using your existing measurements and adding new ones can help you overcome these difficult problems.

In thinking about new measurements, you need information that helps you explore opportunities that interest you as well as information that helps you test your ideas about what could work. We’ll look first at measurements that can help you explore the opportunities you have identified.

To make this chapter easier to understand, we will continue with the publishing example from chapter 4. As you recall, nth degree thinking identified achieving rapid positive word-of-mouth comments as what the publisher wants to optimize. The following six complementary methods for accomplishing that result were identified:

- Publish books written by well-regarded celebrities with intriguing new information

- Authors dedicate royalties to popular charities which will promote the books

- Companies donate books as part of their product promotions due to the subject matter

- Tie the book launch timing to a series of related broad-scale media events

- Create an appealing corporate-sponsored contest related to the theme of the book

- Provide newsworthy disclosures daily related to the book.

Let’s concentrate on just the first item on this list to develop an example of what measures are needed. Feel free to add your own ideas to this example to enrich your understanding of this process. We selected a publishing example for you because we knew that our readers would all have some familiarity with what it takes to attract readers to a book.

First, it would be very helpful to know what influential book reviewers would like to read about and from what prominent authors. Book reviewers receive advance copies months before the publication date, and early reviews often help influential readers decide which books they want to read. In addition, book reviewers often informally tout new books that they like to their friends which gets the word-of-mouth process off to a fast start.

Second, we want to ask the same question to those who are eager to read and talk about books just as soon as they come out … and who have influence on a large number of other readers who also like to read books just after they come out (let’s call them “early influencers”).

Third, we would like to know what sources help these early influencers rely on to decide what books to read. We can then use that information to get the word out.

Fourth, we want to know what hints about the book’s contents these early influencers are most likely to be responsive to. That information will help shape the book’s design and publicity.

Fifth, we can benefit from finding out what nuggets of desirable information in the book would cause early influencers to send out e-mails and make telephone calls to share good news about the book.

Sixth, we can gain by finding out if early influencers want to see authors talking about their books. If yes, we need to define the venues where the early influencers are and would like to attend an author event.

Seventh, we will make faster progress when we explore the second through the sixth perspectives with those who make their decisions to buy and read books primarily from what the early influencers report (let’s call them “early readers”).

Eighth, we also want to build from the celebrity’s fame and influence. To do this, the second through the sixth dimensions should be measured for those who are the most avid and easily stimulated fans for that celebrity and who also purchase or read books.

Ninth, we should also use the book’s contents to identify those who are extremely interested in that subject, whether or not they are fixated on a particular celebrity. Again, the second through sixth perspectives should be captured for those who are book purchasers or readers.

Tenth, what other groups can you think of who would likely be early book purchasers or readers?

For those who would like more examples of this thinking process, we recommend Crossing the Chasm, revised edition (HarperBusiness, 2002). That book is focused on technology examples.

Questions to help your organization use new measurements to identify the best opportunities for implementing nth degree opportunities.

Implementation measurements are usually so finely tuned that it takes time to put them into place. As a result, it’s unlikely that you will have these measurements before exploring a particular aspect of an nth degree opportunity.

For that reason, you should use the following questions to help you identify as many helpful measurements as you can. With that perspective, you can do a better job of informing those who will make the measurements what you need to know. With good design, you may find that the full extent of your measurements can be made at only a moderately greater cost than performing an incomplete set of measurements. Here is an area where you should plan to sleep on your answers before concluding that you are done with this section.

1. What types of customers will be most interested in your nth degree opportunity?

If you have very few potential customers, feel free to identify them individually. If you have many potential customers, pick some method of describing how they are different from those who will be not as interested. In the publishing example, book reviewers who are interested in the celebrity and subject were one such category.

2. What types of the most interested customers will be most profitable to attract in the beginning?

These groups should be from among those you identified in question 1. In the publishing example, you will probably agree that the early influencers group is the most profitable both because they will be buying the books early and because they will be influencing a lot of other people to buy books.

3. What factors that you can influence will be most important in attracting these most interested and profitable customers?

In the publishing example, these factors included the identity of the celebrity and the new information being presented in the book. Undoubtedly, other factors will also be important. The new measures should identify what all of the important factors are. If you have ideas about what these factors are, be sure to write them down so that they are tested in the measurement process.

4. What other groups of relatively profitable customers will be impressed by positive experiences among those identified in question 2 with your nth degree opportunity offering?

In the publishing example, these customers are those who pay attention to the views of the early influencers and those who write the earliest book reviews. In other industries (especially for industrial goods and services), customers are skeptical of those who have employed something in other industries. But there are exceptions, particularly in the other industry is well known to have high standards or difficult requirements. It’s critical that your early successes be able to widen the market’s appreciation for what you offer.

5. What factors will be most influential with those you identified in question 4?

In our publishing example, factors could include specific examples of the new information that is not revealed in the marketing and publicity literature and the enthusiasm of the comments made by the early influencers and book reviewers. In another case, factors that relate to the credibility of who said what and what they said will often be important. For instance, a single endorsement of your nth degree opportunity offering from a highly admired executive at a highly admired company will carry a lot more weight than a hundred endorsements from unknowns at companies that people feel are failing. If your offering has definable performance parameters, information about what the performance has been in comparable situations that are important to the customer can be critical.

6. Assuming that you attract those you identified in question 4, what relatively profitable groups of current and potential customers will those customers help you attract?

In the publishing example, these next most attractive and available customers will be the early readers, the people who pay attention to what those who are influenced by the early influencers have to say about new books they have read.

7. What factors will be most influential with those you identified in question 6?

In the publishing example, you may find that these later readers pay attention to a variety of variables beyond what their influencers have to say. These other factors may include how well displayed the book is in libraries and book stores, the word of mouth they hear from those the early readers do not normally rely on for book recommendations and how well the book is doing on best seller lists.

8. How do the interests of and influences on the averagely profitable customers vary from those you identified in questions 4 and 6?

Celebrity appearances involving autographing, handshaking and talks might be a big swing factor for many of these customers in the publishing example. It is critical to know about these differences so that your marketing activities will include the right activities at the right time. Otherwise, you will have a strong reaction from those who are highly profitable … but will fail to ignite the mass market which will provide the bulk of your profits. For more on this subject, we recommend Crossing the Chasm (ibid) as well.

9. Will any of these target customers provide you with inexpensive opportunities to test your offering with them before it is finalized?

Publishers and authors often circulate draft copies of books to get feedback from those who are representative of the market they want to serve. In high technology, customers are often provided with free “beta” copies of software and hardware to help both the company make adjustments and to demonstrate the superiority of the new offering to what has been available before.

Copyright 2005 Donald W. Mitchell