Designer’s Guide to Customer Addiction 01

Many new product ideas were good, but failed miserably after launch, could not drive more users, even though the research shows that there is a real need, the real pain to be solved.

Many entrepreneurs have risked their life’s savings, investor’s money, their reputations, promises to employees and partners, to build a product, but failed.

You can blame budgetary constraints for marketing and promotions, but if your product/service lags in essential elements, promoting the same with a huge budget is not sustainable.

Remarkable marketing is the art of building things worth noticing right into your product or service – Seth Godin

We have seen various products that have bombed in the market, even after huge marketing efforts. Yes, The marketing team can get initial users, but repeat users/buyers need a good product/service.

Designing a product with mere novelties is a subtle trap. Users may describe it as “Cool” the first time, when shown to them and may talk about the product to their friends, but many of them will not buy if it is rarely useful. Your marketing can make Early adopters buy cool stuff but will lie in closet, due to lack of usefulness.

There are more and more choices for the customer, and they don’t have time to listen and understand your pitch, making our product, service invisible.

ROI from TV Advertisements, Newspapers are dwindling down(People are changing channels, skip ads when commercials play. Can you remember what ads you saw in today’s newspaper). Permission marketing is drying up. Viral networks are jamming up.

People aren’t likely to have easily solvable problems. Satisfied customers are less likely to tell their friends unless the product Vows them. Quite a big challenge for present generation products/services.

So, how to make a product like Facebook or Whatsapp where customers regularly use on their own, again and again without any ads or promotions or aggressive messaging and help in promoting the product. How to create high user engagement with our products/services?

Most of the majority of product success stories are engineered from the first day to be successful.

PAINKILLERS AND VITAMINS

Most of our products and services are aimed at solving a major customer pain since that is the most profitable.

Vitamins, won’t solve any obvious pain, but satisfy our emotional needs. Vitamins are optional to use, so users may not be tempted or compelled to use.

What kind of pains does Facebook solve? Is it a Painkiller or Vitamin? You can call Facebook as a Vitamin, as it is not solving any obvious major pain. But after continuous usage of Facebook and Whatsapp for a longer period, if you stop using it for two weeks, how will you feel. Will you not feel some stress, tension, anxiety?

Facebook or Whatsapp is like a drug, where the usage starts like a vitamin, but after prolonged use, you feel pain if you stop using, thereby the Facebook becomes a painkiller drug.

Before Facebook or Whatsapp, we never needed a product like this, but after repeated use, we cannot live without them. So, some products can be called Painkillers, some can be called Vitamins, and few can be called DRUGS, a dangerous addiction. Based on your product category, we need to consider few more elements while designing our product/service. Is it possible to convert a product/service into a drug and addict users?

NEEDS/PAINS

One of the answers for most of the failures is that the product or service does not meet a real user need or solve a problem, people really care about. Often, users do not always recognize their needs, problems properly, nor do their needs match with what experts think. User research will help us to solve this conundrum.

Until Steve Jobs introduced iPhone in 2007, nobody knew they had a need for the smartphone.

Today, A smartphone is an integral part of every one of us. iPhone is an example for a User developing the need when he knows about the innovation/product.

Professor Edgar Dale was fond of saying:”We may want food but not need it. And we may need vitamins and minerals and fail to want them.”

It was a designer’s job to understand the need and not customer’s job to define those needs in ambiguous terms. Identifying need or pain is essential for the success of a product, but then we need also to identify the associated emotional items.

Denis J Hauptly says “We have to ask right questions to Users because our Frame of Reference is different from them. Sometimes, we are asking questions that we want to hear the answer to, not questions that we need to hear the answer to.”

Can you tell me what need/pain Facebook solves? Boredom? Loneliness? Frustration? Confusion? Sharing Joy? Social Acceptance? Looks like a more emotional need than functional need? But Facebook or Whatsapp has connected the Emotional Quotient with Utility. Without Utility, focussing on Emotional Quotient alone will not sustain the users.

USERS

Selection of users or customers plays a major role in spreading your idea. Making product for everybody is like a product for Nobody – Target a Niche, focus and try to overwhelm them.

As we know, that vast majority of consumers are happy, not looking for the replacement, don’t like adapting to anything new, our only chance is to sell to Innovators and Early adopters who like change, who like to explore and who are actively looking for Innovative ideas.

Among the early adopters, we have to locate people who can be Sneezers, Opinion Leaders and Change Agents – Basically who can spread the idea, and influence people.

We must design a product that is

  • Remarkable enough to attract Early Adopters,
  • Having triggers in product to Motivate them to try it out,
  • Simple enough to use,
  • Rewarding enough to Engage the users,
  • Easier to Customise to make users invest more time, and
  • “Easier to communicate the Design Benefits to Others” by Early adopters.

Facebook initially targeted young people from Harvard and then IVY LEAGUE.

Boredom is a big factor in teens and young adults. People in this age bracket generally don’t have bills, jobs and all the stresses that go along with adulthood. So it’s easier to become bored and want to try something new and exciting.

Drug use by teens is often thought of as a way to escape the mundane world and enter an altered reality. Similarly, Facebook too is thought of as a way to escape boredom.

EMOTIONS and ROUTINES

As I already mentioned, whatever product/service we envision, if we can connect them with an emotion and a daily routine, we can create an internal urge to use the product.

Nir Eyal, “Emotions, particularly negative ones, are powerful internal triggers and greatly influence our daily routines. A need to share good news can also be thought of as an attempt to find and maintain social connections”

To tap right emotions, we need to dig deeper to understand how the user feels, what emotions motivate them to use a product/service or do an activity or task and look for discrepancies which can expose opportunities. Example – Why people take photos? Why do they want to show it to their friends? etc…

It is important to connect tasks of a product or service with an Emotion and a Daily Routine.

FREQUENCY OF USE

In design, we were taught “Less is more” and look for simplified designs, have fewer activities for user etc… But Facebook’s principle is “More of More”. This principle helped more occasions for a user to use the product and drives more viral growth.

Facebook instead of focusing on one Big Innovation, has focused on many small innovations, which when added, provided a significant change in the value proposition to users.

“More of More” principle along with smaller innovations have helped Facebook to leapfrog its competitors MySpace and Friendster, even though the competitors had healthy growth rate and millions of users.

The more frequent we use the product, the more the addiction. As a designer, we need to Amplify the utility factors, simplify the “Ability”(Ease of use) factor, which in turn will increase the motivation required to use the product frequently.

BJ Fogg’s model says, when our product is new to the market, the user will have less motivation to use the product. So we need to design the product in such a way that the initial tasks are easier to do and Users can feel like trying. Once they started using, our product or service, activities should motivate them to explore further(Increase Motivation), which in turn can make users to explore slightly harder activities and the cycle can be continued till the desired state.

CREATING A “ZONE”

From WISDEN, The cricket stadium is a whirlwind of noise; a vortex of people; a kaleidoscope of blurring colors. There are horns, flags, drums, humans – it is the anarchy of sporting fandom.

Then, in the eye of this storm, in the middle of the pitch, stands Sachin Tendulkar.

In the words of the man himself, “it’s like you are completely cut off from the crowd, from the noise they are making. Your subconscious has taken over.”

“ZONE” is an affective state of calm equilibrium, where environment disappears, including the sense of One’s own self and body. Once in the Zone, Sachin never thinks about winning or becoming a Hero or Conquering the bowler but Plays to just Keep playing and Stay in Zone as long as possible.

Can you relate the “ZONE EFFECT” of drugs and facebook? When we start scrolling through our timeline feed, next thing we know an hour has gone by.

Designer’s job is to create a system which will keep the users in the zone for as long as possible, by creating an irresistible cognitive, emotional and sensory embrace.

Mihály Csíkszentmihályi calls “Being in a Zone” is a psychological and he calls it as “flow”.

His Flow theory postulates three conditions that have to be met to achieve a flow state:

  1. Clear set of goals and progress
  2. Clear and immediate feedback
  3. Good balance between the perceived challenges of the task at hand and their own perceived skills.

How to Create the “Zone” – To create Zone, we need to understand type of Rewards, Ways to make people invest time, effort etc.., Ways to help users to modify or re-invent our product/service, How to make usage of our product/service being visible to other users, non-customers and some other factors. Hopefully, we can throw more light on “Creating the ZONE” in detail in our Part 2 Blog.

Open to receive your feedback to help us learn more. If you feel it will be useful to some of your friends, startup people, please share with them. Thanks.

How to Master Competitive Strategy – Part01

As a Designer, we were told not to look at competition or competitor product when starting the project. Instead, we have to focus on “User”.

We might be tempted to benchmark Competitor’s product to understand market signals, market behavior, market trends, what competition has already done, how it has already positioned itself. These competitor data is a noise and a distraction from our core activities. Product data about the market can be gathered more successfully by studying the community.

If you are trying to build every feature competition is doing, then you won’t be building things, what competition is not doing.

Have a look at the below picture of domestic water heaters from the market.

All are looking different in SAME Way and they race to the bottom in pricing.

As one brand released a new version of the product, other companies rushed to copy each feature and differentiation is lost. Every product looks good when you see them individually, but when you put together, we are lost for choices. There was no real focus on what people needed or wanted. Above similarity between products show that most of the products are based only on “Market Research” and not on “User Research”.

Instead of focusing on features, we need to focus on providing deep, meaningful engagement to the people who use our product/services.

It clearly shows that Incremental Features, Incremental Innovations will not help us to sustain and increase market share. Added features in any product will diminish the experience a person will have with any feature of the product.

Hick’s law states “Adding more features exponentially increases the amount of time a user takes to make a decision”

“Styling” or “Usability” alone cannot be a differentiator anymore. You cannot sell a product because you just look different when aesthetics has become a necessary element to survive now.

Twenty years back, Operational Effectiveness through programs such as TQM, Zero Defect, Benchmarking etc… was helping companies to achieve a competitive edge. Later Outsourcing, Virtual Co-operation, and Integration helped competitive edge, but this operation effectiveness strategies are now followed by everyone.

Constant improvement in operational effectiveness is necessary to achieve profitability but not sufficient enough for long-term sustainability of a business.

Cadbury and Design Thinking

In early 2000, Cadbury Schweppes was effectively locked into a form of “Red Queen Competition”, pushing the company to run faster just to stay in place. To maintain their market position, they need to increase investments, which may not justify the financial returns. Cadbury’s Chief Strategy officer Todd Stitzer(Who later became CEO) asked him, teammates

Look for a Strategy to grow the market rather than just the company’s market share. If I ask you to increase our market share, you will look at our competitors, and we may not succeed.

Instead of fighting in the existing market boundary, Todd Stitz understood, that he needs to create a new marketplace or extend the existing market boundary. He wanted to find a new way of skinning the cat.

Cadbury used the same strategical approach to U.S chewing gum market

In Chewing Gum Industry, Cadbury explored new consumer benefits beyond Breath Freshening and came ours with options like Teeth Whitening, Stain Prevention, Cavity Repair and New Fruit Flavours.

New value innovations helped Cadbury to achieve Growth rates, High consumer consumption at high price points. Focus on “User” and “Value Innovations”.

Why Competitive Strategy?

Design thinking helps in new product launch by creating a new product category and helps us to extend the market. Whatever competitive advantage we have, may evaporate in one year. In present competitive scenarios, your competitor will be on your heels. FMCG, Consumer electronics industry have turbulent market scenarios.

Thirty years back, Most Industries were relatively stable, having predictable market and malleability and you can define strategy. But now, the industry borders are invisible, have unpredictable market conditions.

We may have competitors from adjacent industries, like how Pepsi entered drinking water industry and created a ripple. Some unknown startup can suddenly enter and disrupt the market, like how cab aggregators like UBER and OLA disrupted Taxi industry(When people thought this industry is saturated).

Competitive Strategy is needed for following reasons

  • Understand root cause of future profits
  • Create frameworks for profitability over a period of time
  • Sustainability for a longer period
  • Remain non-vulnerable or adaptable to Technological Disruptions, Upstart Competitions, New regulatory regimes, Political changes, Unpredictable business environments.

Design thinking aims at creating at Adaptive Strategy through iterations, testing and then proceed to a deliberate strategy.

Design thinking will not help you to look at Strengths and Weaknesses of a competitor, as nobody can tell, from where our competitor will come.

UBER came to the market to satisfy the unmet customer need, which was clearly visible before UBER entered the market.

We may not predict the competitor or substitute product, but we know all those competitors are going to enter, survive, disrupt our market for only one reason – To satisfy the rational and emotional needs of user/customer.

How to connect Design Thinking and Competitive Strategy?

Design Thinking after creating Differentiation, Focus and Value Innovation in your product/service, can help and contribute to Positioning Strategy, Competitive Strategy, Growth Strategy and Operational Effectiveness Strategy.

Target Segment and Needs

As Michael Porter pointed out that first step for “Competitive Advantage” is to look at a market segment where competitive forces are weak.

By creating a new category or uncontested marketplace, we are entering a market where competition is weak. But soon, the competition will enter. So, let’s see how we move forward. We have to cover many elements to remain competitive. I’m listing down some of the elements to be taken care of.

Activities

There are hundreds of activities required to create, produce, sell and deliver their products and services. We can start from the activities from where Users interact(User Touchpoints with the Industry). We can analyze how those activities are different from existing rivals, and look at activities which are similar to existing rivals. If there are more similar activities, then we may lose competitive advantage, and the solution which you have designed is an incremental one. We need to have more of “Unique Activities”

Design Thinking uses “Customer Journey Map(Or Activity Map)” tool to travel along with user from Need Stage to Knowledge Stage to Persuasion to Decision making to the Implementation stage. (Each stage has many sub-activities)

Customer Journey Map is a framework that aims at providing Unified and Wonderful Customer experience by filling gaps, removing pain points, combining activities, creating an inter-relational lock between activities. Due to dissimilarity and interlocking of activities, competitor finds it tough to copy/imitate few activities alone. We need to apply Operational Effectiveness strategy to make the chosen activities more efficient.

Trade-Offs and Gains

A strategy is not sustainable unless there are trade-offs. Meeting all customer needs is not the best solution. Trade-offs may be guided by User Needs, Organisational Capabilities etc…

Neutrogena Soap is positioned more as a medicinal product than as a cleansing agent. The company says “No” to sales based on deodorizing, gives up large volume and sacrifices manufacturing efficiencies – M.Porter

Some activities are incompatible, so we may have to trade-off. A low-cost airline may want to reduce turnaround time at Gate, but serving meals may affect turnaround time, as food items have to be loaded on the flight, and increase the cost of travel. Trade-Offs create the need for choice and help in brand building, Consistencies in image creation, protect against competition.

Deep Understanding of Users will help in arriving at suitable Gains and Trade-offs

Some Design Thinking Tools which help in finalizing Trade-Offs and Gains are mentioned below. User Behaviour and Contexts need to be accounted.

Value Proposition Canvas

Trade-offs can be due to organization capabilities like inflexibilities in machinery, people or systems, which is outside the scope of this article.

Creating “Fit” among Company’s Activities

Choosing Value propositions, Trade-offs, Activities, interlocking them, combining them, depend on which activities company can perform, what kind of resources, key partners, communication channels, distributions channels the company has. As a designer, we need to understand Innate qualities of organization, operational processes, distinctive capabilities.

An organization culture is built up gradually, continuously reinforced through various practices and process. So, it is important to utilize the same to create distinct, coherent corporate identity

The way a company culture shapes the product/service is considerable and is largely irreproducible. Just visualize how an APPLE product and a MICROSOFT product feels. An IPOD and ZUNE mp3 player.

A competitor can copy features of market leader’s product features, but cannot get the feel of employee’s inputs, working environment effects, work ethic’s influence, and emotional resonance.

Let’s look at Zappos. Anybody can create an online shoe store, but very hard to match the customer service and trust the company is known.

Keeping track of Advancements in technology

The mouse was invented in 1964, but it remained relatively obscure till Apple launched LISA mouse in 1984.

Buxton, a futurist at Microsoft describes “Any technology which is going to be humanized in 10 years is already ten years old. “

To learn and follow this slow process of technological humanization, we have to duck our heads below the radar to find it, which can be used in our respective fields. Somebody has to read those tech journals and attend those high tech conferences.

Eliminate Uncertainties

Design Thinking is a generative process, where we use provocative thinking to brainstorm for future situations. We use “What If” statements and word “Po” predominantly to think about various future situations, fictional narratives, and solutions. It helps us to imagine future scenarios and plans to tackle the same.

What if a competitor launches a product with a similar feature in the same time frame?

What if a user of our product/service encounters a dangerous situation while using the product?

What if Government comes out with a regulation to ban certain features?

What if there is a negative review in the press?

There are other tools like “Analogous situations” to help us to understand future scenarios and be prepared for the same.

Conclusion

Design Thinking coupled with existing competitive strategy can help us to look beyond existing rivals and can detect wider competitive threats and be better prepared to address them.

What to expect in part 2 of Design Thinking and Competitive Strategy

In part 02, we will discuss how Design Thinking can contribute to handling forces that shape competition like Threat of Entry, How to create Barriers for entry, How to benefit from Demand-Side benefits of scale, How to increase Customer-Switching costs(Increase customer loyalty), Distribution channels etc…

Will be happy to know your feedback to keep exploring further, learn and spread the knowledge. One’s own Wealth when you share may decrease, but knowledge when you share increases manifold.

Target Segment and Design Thinking

Target Segment has many definitions, and one of the definitions can be “Group of customers to whom same product/service will appeal”. Generally, Target segmentation is based on the product type, by price point, demographics, psycho-graphics etc.. Design Thinking too has these research methods and data, but we as designers try to segment based on the needs, jobs to be done in different circumstances and emotional quotient.

An example from the book of Clayton Christensen

A Quick-service restaurant wanted to improve its milkshake sales and profit.The chain segmented its customers by characteristics of existing milkshake customers. They explored whether making the shakes thicker, chocolatier, cheaper or chunkier would satisfy the user better. The chain got clear inputs, but none of the improvements to the product altered sales or profits.

They approached designers to do a user study.

“As a designer we believe in observing users, acting like users, spending time with them. Then we would like to speak to customers, collecting data, insights indirectly through stories from the users”

After spending hours in the restaurant, traveling along with some users to their places, they chronicled the data. They recorded the time of each milkshake purchase, what other products customer purchased, reasons behind the same, whether the consumer was alone or with a group, whether they consumed in the premises or drove off, and so on.

“The most surprising insight was half of all the milkshakes were bought in the early morning. Most of the time, the milkshake was the only item these customers purchased, and it was rarely consumed in the restaurant”

Most of these morning customers faced a long, boring commute and needed something to make the commute more interesting. They were not hungry, but if they did not eat any, they would be hungry by 10.00AM. They also have time constraints and were in a hurry, were often wearing the work clothes, and most had only one free hand since they will drive.

When customers looked around other options for the morning commute, eg. Bagels, got crumbs all over their clothes and the car, banana-but eaten too fast and did not solve the boring problem, Sausage, ham or egg sandwiches that the restaurant sold for breakfast made their hands and the steering wheel greasy, doughnuts didn’t last longer.

“So, milkshake did the better job. In customer’s mind, the morning milkshake competes against boredom, bagels, bananas, doughnuts etc…”

So, how will you make their life easier? Quick instant service, Quick Billing, self-servicing machine, Can we make the shaking bit thicker to last long, can we swirl in tiny chunks of fruit to provide healthy value and increase the time of consuming, etc… Solutions can be any which has to meet user’s needs and with the resources in the restaurant.

Similarly, if the team did research on people who commuted and didn’t take milkshake and those factors would have helped them to arrive at a better solution. Not sure whether they did, but sales got turned around. Through research, they also identified another segment and solution for the same, which I’m not covering now, as the post would be longer.

Honda Super Cub in the USA

In 1950’s Honda wanted to enter USA Bike market. During that time, American Bike market was small and dominated by Harley Davidson.

Image Source: Wikipedia

“Motorbike riders are generally seen as outsiders, an image shaped by Hollywood”

Honda entered the market with 250cc, 305cc larger bikes like Harley Davidson since Americans travel longer distances, unlike Japanese. But Honda’s bikes were not robust enough and started getting into a lot of maintenance troubles. The bikes were not meant for long distance travel. Their sales were terrible.

Meanwhile, the Honda staff in the USA started driving 50cc Supercub in the streets, hills, ran errands. Supercub started getting people’s attention.

“When you become a user, you live like a user, you can connect your product easily with the user. Your needs are your user’s needs”

Since staff lived like a local people, among them, they could identify the target segment and their needs.

“The team identified that there was a large segment of people, who wanted an inexpensive, convenient vehicle for short trips around the town”

This Supercub became a super hit with people, and the sales soared sky high.

IKEA furniture retailer

We all know that IKEA provides well-designed, inexpensive, functional home furnishing products at low price. Their target segment is blue-collar employees, Middle-income earners, customers who are happy to trade off cost(not product quality) for service. How did IKEA arrive for this target segment? As I said, when you live like a user, you will understand their concern, needs, limitations and will help you in the effective design of the product, arriving at a right positioning strategy.

“IKEA’s founder Ingvar Kamprad lived in a village, where people have a reputation of working hard, living frugally and making the most of their limited resources”

So, Ingvar himself lived like a user and this impact made him create low-cost products, with good quality through frugal innovation. He often uses himself as an example.

Blue Ocean Strategy and Design Thinking Part 1

I see a lot of similarities in thought processes between Blue Ocean Strategy and Design-Thinking. Blue Ocean Strategy is a good reference book, and if we can integrate thought process of BOS with Design-Thinking tools, we may have a holistic solution.

Value Innovation

First thing BOS tells you is not to look at a competitor. If you look at a competitor, then your product/service may look almost like your competitor and you cannot differentiate, which is very true. “Value Innovation” is the cornerstone of Blue Ocean Strategy.

“Value Innovation” is nothing but creating a leap in Value offerings to buyers/users, thereby creating new uncontested market space, making competition irrelevant.

BOS says that Value without Innovation is an incremental innovation, which will not help you stand out in a marketplace. Innovation without value to user tends to be technology driven, often shooting beyond needs of buyers or what buyers can afford. So, Blue Ocean Strategy suggests “Value” for User with “Innovation” is a “Radical Innovation” which will help to achieve growth in the market.

Design Thinking and Value Innovation

Design Thinking is nothing but “User-Centered Design” where we designers are trained to focus everything from User’s point of view. We never look at competitors or competitor products. When you do research of users(Ethnographic, Empathy, etc…), we can easily find out what kind of values we can add to the user through our product. Design Thinking helps us to achieve Radical Innovations than Incremental Innovations by “User Research”.

In User Research, we study product/service users(primary, secondary and tertiary), buyers(Who may not use the product), Non-Customers, etc… Insights from research help us to achieve New Value Propositions for the product/service.

As a designer, during the research process, we look at both Emotional and Rational needs of the user.

Instead of just making functional, utility product, design thinking process aims to provide emotional connect to every product.

Emotional connect is never optional but essential.

Surprisingly, Blue Ocean Strategy too talks about adding Emotional Feeling to the product, citing an example of SWATCH(This case study too could be found in many books on Design).

To create Value Innovation, Blue Ocean Strategy asks us to “Look across the chain of buyers”, “Look at three tiers of customers”.

In User Research phase, we designers generally look/observe/study Users, Buyers of the product, Influencers/Decision makers, and other Non-Customers.

In fact to obtain “Radical Innovation” we provide more importance to “Non-Customers”. In fact, we go one step above and study the various circumstances and the jobs to be done by the user in certain circumstances.

For radical innovation, the study of jobs and circumstances are important.

(Will post a separate post connecting “The Innovators Solution, Jobs to be done and Design Thinking”).

Blue Ocean Strategy talks about the simultaneous pursuit of differentiation and low cost. Though I agree that low-cost strategy might be a disrupting growth strategy for some products/markets, but need not be for all the cases. Design Thinking doesn’t constrain to look only for the low-cost factor.(If not used properly, it can be a drawback too).

The Four Actions Framework

Above, you can see the image of BOS’s “The Four Actions Framework”.

As a designer, though I follow “Design Thinking” I use some of the materials from BOS. Four-Action framework and Strategy Canvas are a couple of the tools I use. Through User research and Insight analysis, we arrive at a lot of Value Propositions. Though “Design Thinking” has different ways of finalizing Value Curves, I see this BOS framework a simple and easy one. The only issue is, we may not use the “Industry Standard” from the above framework.

Create, Eliminate, Reduce and Raise actions help in finalizing effective user values for product/service. There is another support tool for Four Action Framework — “Value Proposition Canvas” from Strategyzer.com

We do use BOS strategy canvas, as I feel it is simpler and provides a clear visual.

So, if you are planning to use Blue Ocean Strategy, you can use “User Research Methods” from design thinking process to identify new “Value Propositions” and “Emotional Appeal”. User Research will help in reconstructing the market boundaries. As I said earlier, there are a lot of similarities between BOS and Design thinking. In next post, I shall discuss some more details.