Vetting Experience Concepts

Lately, I’ve had rather too many conversations with interns and junior employees who are upset or dejected that their brilliant ideas for new products or product improvements are not gaining any traction.   Sometimes, this is conservatism – a well-established firm tends to assume its success means it’s already doing everything it needs to do to be successful – but in most instances there is an obvious flaw with the idea itself.    I find myself saying the same things, over and over.

What new outcome will this idea achieve for the customer?

This question is the foible of many bright ideas: they are intrinsically interesting, but do not achieve a new outcome for the customer.   It may be an interesting way to do something that people don’t want to do, or a new way to do something that people are already doing by more effective or more efficient means.  In sum, an idea is sustainable only if it offers genuine value to the customer.   Novelty has a very limited appeal.

An effective way to vet an idea for value is to show the idea to a small number of customers (half a dozen is sometimes sufficient) and ask them what outcome they could achieve by using it.   Rather than telling them what you think it is good for and asking them to agree, let them discover the value on their own.

Does the idea have sufficient and sustainable appeal?

If the idea clears the first hurdle, a more intensive investigation should follow to determine the extent of the appeal: how many customers would use this, and how often would they use it?   It may take a sizable panel to get quantitative results – but once you have them, you have a basis for estimating revenue from the product’s release: the number of people suggests market share, and the frequency of use suggests frequency of purchase.

If the idea replaces an existing means to achieve the same outcome, testing it in comparison may tell you whether the idea has a chance in a competitive marketplace (against solutions that already exist) and whether you will be cannibalizing your own sales (which is not bad if the cost to the firm is less for the new idea).

Is it legal?

Particular in heavily regulated industries such as healthcare and financial services, there are many great ideas that cannot be pursued because of legal and regulatory restrictions.   Even if the idea is completely benign, offers good value for dollar, and would be warmly embraced by an audience who’s well aware of the conditions, the precise letter of the law could be used to shut it down and possibly damage the brand if it were released.

Arguably, this should be the first hurdle – but legal advisors are fond of saying “no” without intensive diligence and business decision-makers are prone to go along with their legal advisors unless there is a compelling reason to take a risk.   The market appeal is often necessary to get an executive to tell the attorneys “thanks for the advice, but we’re going to proceed anyway.”

Is it profitable, or at least sustainable, for the firm?

Because money makes the world go around, any idea has to pass the test of financial potential: it has to generate more revenue and/or incur fewer expenses.   At the very least it has to make enough revenue to cover its own cost – otherwise it is leeching resources from more viable lines of business and must eventually be terminated for the health of the firm.  This is true even for nonprofit organizations: any operation has to be sustainable rather than feed upon the life-blood of the organization.

This can be a very difficult hurdle to leap because the cost of the idea has to be paid for out of the revenue.   It is not enough to make a million dollars in additional sales if the expense of providing the idea is $1.2 million for the same duration.   It’s easy to get excited about what happens at the register, while ignoring what is going on in the ledgers.

Caveat: Beware of Unqualified Experts and Self-Vetting

I have a sense that these four questions will help to understand the reason that exciting ideas are shot down – but this is the scope of their value: understanding why the ideas are shot down by others, not limiting your own thinking because of your assumptions.   Be prepared to hear a "no" but do not abandon an idea because you assume that's what you will hear.

Unless you are an accountant, you do not know what will be profitable; and you will think a good idea is not sustainable when in fact it is.  The same goes for market appeal and legal compliance: you are not an expert, and unless you have done a thorough investigation, you cannot say – you must defer to experts, and ensure that their deliberation is thorough.

And apply the same standard when others criticize the idea: I have very often seen a designer attempt to shoot down a product idea saying that it will not be appealing to the customer when he does not know, and until it has been properly vetted, no-one knows.   In this sense, the vetting process works both ways”: it deflates ideas that do not have merit, but may also bolster confidence in an idea that does not seem to have merit, but actually does.

Right-Sizing Experience Design

Experience design, which focuses on facilitating the peripheral tasks around using a product (chiefly, the acquisition process) is being overemphasized of late.  Largely, the notion of a “design-led organization” is being promoted by the design department, which is composed by narcissistic idealists who imagine themselves to be the center of the universe anyway, but it’s also being embraced by product management groups, who see “design” as a way to promote a product without making any substantial changes or improvements to the product itself.

While it’s good (and quite overdue) that firms are recognizing the need to do more than push boxes and reducing the pain in the process can reduce drop-out in the acquisition funnel, the emphasis on design rests on the false assumptions that the product is perfect as it is, that people are eager to acquire it, and that the friction in the acquisition process is the only thing that is stopping prospects from purchasing the product.

Said another way, experience design can be applied to make it easy to acquire a desired product – but it cannot be used to make an undesirable product desirable.   And in the rare instances in which the acquisition process can be made so attractive that prospects will purchase an undesirable product, it becomes toxic – much in the way that people who get wound up in the excitement of an auction end up purchasing products they neither want nor need – and while a one-time sale can result, buyers’ remorse diminishes the likelihood of their becoming regular customers.

If experience design succeeds at jostling for control, it will ultimately be to the detriment and long-term sustainability of the brand.   It needs to be considered, but is not the paramount concern – hence the appropriate level of emphasis for experience design is partnership, a contributor that plays a supporting role, valued for what it is worth – but never to the degree that more important concerns are subordinated.

What’s in a Name?

It was one of those conversations you can’t help overhearing because it was going on at a volume that was meant to be overheard: a group of three unemployed twentysomethings having a brainstorming session in a public place about an idea one of them had for an internet company that would make them all rich.  The discussion wasn’t about the product or how to best provide value to the customer, but about what the company ought to be called.   It struck me that, while it seemed puerile, I’ve been bored by the very same conversation in the meeting rooms of Fortune 500 companies.

Far too much emphasis is placed on trivial things like this, to the detriment of the more important decisions that actually create value to the customer – whether it’s the name of the firm, its logo, or what color to paint the reception area, these are simply distractions from business and aren’t as important as those who have great enthusiasm for trivial matters like to pretend.

I’m unaware of any evidence that the name of a firm is a critical factor of its success, and am meanwhile aware of many company names that make absolutely no sense in terms of the brand or the products the company provides.  Scroll through the Fortune 500 and you will find very few companies whose names are meaningful in and of themselves.

Ultimately, the name of a firm functions like the name of anything else: it is merely a mnemonic device by which something is remembered and can be spoken of.  The name of a firm doesn’t become meaningful until the brand becomes meaningful, and isn’t known to anyone unless and until they benefit from the brand enough to make it worth remembering to ask for the next time a similar need arises.

Aside of the need to avoid names that are awkward or offensive (locally or globally), or a name that is already strongly associated to something else, there is no reason to prefer one name to another.   Toss a handful of Scrabble tiles on a table and add a few vowels, and you likely have a perfectly usable name and one that stands as good a chances as any other of becoming a household word if the brand is any good.

In the end, it just doesn’t seem to matter, and it stands to reason that the more time and money spent on superficial things such as this are distractions from the more important matter of devising a way to deliver value to the customer.   And it could well be that people who are most enthusiastic about such discussions are well aware of that.

Trust and Predictability

While the goal of earning a profit serves the interests of investors, its investors tend to prioritize short-term profit over the long-term sustainability of the firm.   Every investor has a horizon, be it a date or a target price at which he will cash out and walk away, and will insist the firm be managed to reach this target at all costs.

But the investors are only one faction whose interests must be served by the firm.  There are many others (customers, employees, suppliers, and others) that have a more long-term interest in the firm, and upon whose trust the firm depends for its long-term sustainability,   Managing solely toward the short-term interests of investors can alienate these stakeholders, who become disinterested and reluctant to interact with it.

The firm, like any other organization, has a stated purpose (its mission), a set of supporting values, and practices that align to both.   These are communicated outside the firm to set expectations, thus enticing outsiders to contribute to or, in some cases, directly interact with the firm and even to become part of it.    Where these expectations are met, trust is earned, and the firm thrives.   Where they are not met, trust is broken and the firm finds itself without the resources and support it needs to sustain itself.

It can therefore be said that a firm can only work properly if it earns the respect, trust, and cooperation of external parties.  And it can only do that by communicating its intent clearly and acting in a manner that is predictable and relevant to its stated intentions.  

As such, its behavior becomes routinized and predictable – and this is necessary to earn trust and gain engagement.  Where a firm is inconstant or erratic, there is uncertainty of what the result of an interaction will be.   There is uncertainty as to whether engaging with the firm will in fact deliver the value stakeholders seek to gain by investing their time, effort, and money in the firm.   And consequently they will seek opportunities to invest with a different one, which is more trustworthy and predictable.

Granted, there are many misunderstandings: any stakeholder may bring his own expectations to the table, ignoring the intent that the firm has communicated.   If this seems to happen often for a given firm, it’s likely that the core problem is not the misperception of the stakeholders but its own misrepresentation of value that has led others to have “inaccurate” expectations – they may be inaccurate to what the firm wants them to believe, but accurate to what the firm has led them to believe, intentionally or unintentionally.

Ultimately, the legitimacy of respected institutions arises from a clear and unambiguous statement of its values and a correlation of its behavior to those values over the course of time.   A firm that is consistent in its behavior will gain the support of the stakeholders it needs to survive, provided that its values are shared by those stakeholders.   A firm that is inconsistent will falter and invariably fail – and this is of little concern to the investors so long as the failure occurs after they have cashed out.

Value, Consistency, and the Value of Consistency

Brand is about consistency.   The value of a brand, from the very beginning, was that it indicated to customers what they could expect of a specific product from a specific vendor.   Later, when brand began to accrue other qualities, such as emotional benefits and the esteem of conspicuous consumption, customers were attracted to the brand because they expected those qualities to be delivered as well.

So the value of a traditional brand is that it delivers the same quality, experience after experience, year after year, decade after decade.   Brands that advertise they have been in business for a hundred years communicate a long history of consistent quality.  Consistency with expectations is critical.

Human beliefs are based on consistency.   When two things occur at the same time, we believe it to be coincidence and attach no special value to the correlation.  But when two things occur at the same time, over and over, we create an association and believe the two to be correlated.   It is not even necessary to understand the reason for the correlation: some of the most strongly held beliefs (superstition and religion) are based on situation where the correlation cannot be explained.

This is as true of brands as everyday experiences: a brand must be consistent to be meaningful.  There cannot be the sense that what the customer gets the next time will be different from what they got the last time.   Any change causes the customer to question the correlation, and to doubt that the brand has the qualities they expect - and for that doubt to become more generalized and existing beliefs to be questioned.  If the logo on the package is different, it is assumed that there must be other things that are different about the product it contains.

Whenever a brand changes, it takes some time to adjust: customers are displeased when anything is different, and need to be reassured that the qualities they value about the brand have remained the same.   Or when an unpopular brand changes to become more appealing, they must then convince customers who were disappointed in the past that things are now different and they should give the brand a second chance.

As an aside, correlations are subjective, so it is difficult to identify which qualities are important and which are not: companies assume they know why customers buy their brand and are indifferent to any other aspect, but are often quite surprised when a minor change that they assumed would be inconsequential results in an exodus of customers.   But the concept of a brand, or any object, is the sensory stimulation.   The customer cares not only about the taste of a food product, but it's scent and visual appearance as well - change any one thing, even an inessential quality, and customers cannot refrain from reconstructing their conception of the brand.

So in that sense, consistency itself is a value: knowing what to expect of a brand means that the customer doesn't have to reevaluate it each time they purchase.   This reduces the effort (cost) of buying, and ensures that the benefit-to-cost ratio remains favorable to the brand.   Any change casts doubt on their existing beliefs, causes them to have to re-think and re-evaluate, and provides an opportunity to change their conception of a brand, for better or for worse.

The Desire for Tedium

I recently received a direct-mail promotion for a house cleaning service, the thrust of which was that the service would rescue me from the tedious tasks of cleaning my own home.   I think that copy point might resound with most people most of the time, but at just that moment, it struck me as something that was utterly unappealing and even undesirable.

Perhaps it was the state of mind I was in at the time, or my own perverse habit of busying myself with menial tasks at the end of an unproductive day to gain some sense of accomplishment.   There are many days, and sometimes entire weeks, in which my activities at work have been so frustratingly unproductive that I came home and set myself to some chore that would give me the satisfaction of having done something: I may have spent nine hours in back-to-back meetings in which people merely chewed the cud without making any real decisions, but after thirty minutes effort the kitchen floor is clean, and it was the only productive thing I had gotten done all day.

In that sense, their offer to relieve me of my tedium struck me as wholly unappealing – in that it would rob me of the opportunity to engage in a task that would give me a sense of accomplishment.   Granted, housework is menial and not generally regarded as particularly enjoyable – but like most menial tasks it conveys a sense of satisfaction in being able to take action and immediately perceive the benefits.

I also have the sense that this may also be true of the tedium of certain commercial interactions: that in some instances individuals expect to invest a fair amount of unpleasant effort in obtaining something that they need, and that the product is a reward for the acquisition process.   I don’t expect this is universal, and for most low-cost and low-involvement purchases a tedious or unpleasant acquisition process would cause them to reject the offer as requiring too much cost (in terms of effort rather than price).    But when a given product comes at a high cost and high involvement, there is the expectation that effort will be required.

Moreover, simplifying the acquisition process diminishes the value of the product as a reward for the effort of acquiring it – much in the way that a person who rides a cable car to the top of a mountain does not have the same sense of satisfaction as someone who climbed the mountain.   It could even be speculated that making the process easier makes the goal less appealing simply because it is effortless to achieve.

The example of mountain climbing takes this meditation on an odd turn, in considering that most recreational and leisure activities are undertaken for the satisfaction of accomplishment.   The person who bakes a cake from scratch feels they have done something, while the one who uses a boxed mix enjoys the same benefit (though quality is arguable) at less effort, and does not feel a sense of achievement (or if they do, the first individual would consider that to be unwarranted – having done nothing, they have no right to claim their work is a valid “accomplishment” afterward).

To shift back to the commercial realm, this is likely the pleasure in shopping.   The customer who finds the perfect outfit for an occasion is pleased to have the outfit, but the effort she put into shopping for it accentuates the value of the reward.  Compliment her on the outfit, and she will tell the story of the various stores she visited and the other effort she placed into finding it.  The achievement is more important even than the item that was obtained.

My sense is that this grants a certain trophy-value to possessions that are difficult to obtain, but also diminishes the emotional attachment to those that are easy to obtain.  In the clothes-shopping example, the outfit itself causes less satisfaction than the experience of obtaining it.  Had the shopper found the outfit in the first store she visited, she would have no story, and regard the outfit as just another set of garments – perhaps clothing that was “appropriate” for the occasion but not “the perfect” because achieving perfection requires effort.

It may merit further consideration, or research to support this hypothesis, but I have the sense it would bear out – and as such it begs the question as to whether making something cheaper or easier to obtain might be counterproductive to creating customer satisfaction, and that the assumption that cheap-and-easy is always better should likely be abandoned in favor of a more deliberate consideration of the degree to which a customer is not only willing, but also quite interested, in experiencing tedium or difficulty for a given purchase.