So the election pollsters got it wrong? What does that tell us about how we should use market research?

Posted on May 21, 2015 by Chris Radford

The polling business has had some cause for self-examination following their failure to predict that the Tories would get 37% and Labour would get as little as 30% of the votes in the recent general election. And there has been plenty of debate about this. See this article by Ben Page of Ipsos Mori. What I wanted to do in this blog post is to draw some practical observations about what business leaders and marketers can learn from this, where we should use market research and what to be wary of.

But before looking at the implications, what went wrong?

There has been a lot of debate and discussion. I particularly like the assessment made by Dave Penn click here (@davidpenn1) and Keith O’Brien click here (@keithobrien) and discussed by Mark Earls (@herdmeister) and Phil Barden (@philbarden). They argue that pollsters have failed to absorb and react to the implications of Daniel Kahneman’s finding that decision making is governed by two systems in the brain.

System 2 is the rational conscious analytical, slow, considered part. This is what is measured by traditional market research and polls.
System 1 is the subconscious, intuitive, emotional, gut instinct part that is fast and essential to our ability to get by in life. This is not easily measured by market research polling.

Since polling concentrates on system 2 rational thinking and behaviour, it can misread what people are actually feeling and fails to predict what they will actually do.

Political commentators seem to miss this point about system 1, when they debate the order of questions, the methodological differences between phone and online polls, the sampling error. Politicians don’t get it with comments like Vince Cable complaining that people misled him on the doorstep and a sense among the losers that voters were confused or misled or afraid and this explains why they were so foolish to not vote for them.

Lord Ascroft has commented that Lynton Crosby’s team seem to be doing something different and they knew they would win. Even Lord Ashcroft is curious about how they did that?

Can we rely on market research? Should we use it?

Inevitably the measured answer is “it depends”. I have long noticed that there are only really three business questions that market research is used to help with. These questions are

What should we do?
Are we doing it?
What will the customer do?

I would argue that market research is helpful and reliable for the first two and quite hazardous and misleading for the third one. The industry promotes products and services that help top answer all three questions. I would suggest that the industry has not come up with a satisfactory approach to answer the third question. the reason they sell a lot of product to answer that question is that business leaders have an insatiable appetite for the answer to the question “What will consumers do?” Executives like to manage risk and market research is used to justify decisions.

What the pollsters error teaches us is that research is not yet a great indicator to understand what people will do. Some like Dave Penn are using neuroscience and behavioural economics to pioneer new techniques to try to overcome this problem.

What can we use market research for?

Lets look at the three business questions that market research is used for.

1. What should we do?

Whilst consumers find it tricky to accurately predict what they will do and they are not good at imagining products they have no experience of, they can tell us a lot about their lives, their problems, their needs, their frustrations. Also we can observe their actual behaviours.

As business leaders we know that we have to offer customers things that help them address needs and solve problems e.g. feed the kids when they come home from school, get breakfast on the way to work, communicate with my friends. We can watch what people do, we can find out about frustrations and problems, we can measure what really matters to people. We can find this out through personal experience and observations or we can use formal market research. So

Usage and Attitude studies
Observations and interviews in store
Panel surveys and interviews
Consumer workshops and group discussions

This is called exploratory research and if it is well designed it informs our plans. Do not expect consumers and customers to imagine possibilities that we have not shown them. That is our job to create and imagine that.

2. Are we doing it?

Business leaders are suckers for measurement. we want to know if things worked, we want to know about the customers experience, were they satisfied, will they recommend us. This is another area that professional market research is brilliant at. So

Brand tracking
Customer satisfaction
Net promoter scores

These all help us see how we are performing. Provided we did the work properly in the “What should we do?” part and we are measuring things that matter to our customers, then this is really valuable.

3. What will the customer do?

This is where it all goes wrong. It is what business leaders most want to know. The question rings out, “have you researched that?” and executives feel they have to go and that. But much of this work holds out false promise. the worst possible question is

“Will you purchase this product in the future?”

The reason for this is simple. As people we are very bad at predicting what we will do in the future. This is mainly because we do not know what our priorities will be in the future. It is hard to see how market research can help us overcome that. But it is also because of the influence of the unconscious system 1 on our decision making.

My own approach to concentrate all the effort and work on questions 1 and 2. if we get that right and do that well, then the products and services we offer to customers will be attractive to them and enough people will buy them. Asking them if they will buy them does not give us a better indication. Lord Ashcroft understands this and proclaims his polls to be only a snapshot. However even he must wondering about the quality of his snapshots in 2015.

Read this article about Attractive Thinking to see how to answer questions 1 and 2 and avoid the need to use research to answer question 3. This is about coming up with a plan for growth that you are confident will attract more customers.

Top 10 books that changed the way I do business

Posted on May 21, 2015 by Chris Radford

A client (David Edwards from UL) asked me yesterday for some advice on what books he should read to develop his product marketing knowledge. This prompted me to reflect on which books have had the greatest influence on me. All these books have had a material effect on my approach to creating growth strategies that everyone is convinced will work.

Product marketing is about more than marketing, it is about attracting more customers. Over the years I have found very few marketing text books that were really helpful and stimulating. But many books that have influenced the way I think about marketing and attracting customers.

None of these books give a simple answer straight out of the box. They are all thought-provoking and will help you to move your thinking forward. If you want easy answers then look elsewhere, if you like a challenging thought-provoking read, then take a look.

My top 10

The science and laws of marketing

Start with Byron Sharp. He has taken the pioneering work of the late Andrew Ehrenberg and made it accessible to everyone. This is about why it is more important of get more customers, not just focus on customer loyalty. It is about why light buyers matter so much. It is why the 80:20 rule is wrong. It is based on years of research into how people actually behave and not anecdotes and armchair thinking about marketing theory and customer loyalty.

Byron shows us why evidence matters and how to bring science into marketing. Byron shows you that there are 10 laws of marketing and why you cannot ignore them.
Watch his TEDX Talk here

The Text-Book

This is the only marketing textbook I would recommend. It takes the laws of marketing as explained in How Brands Grow and tells you how to apply them to the business decisions you need to make to develop a marketing plan that will actually work.

It is written by whole team at the Ehrenberg Bass Institute of Marketing Science and has some good case studies. It is aimed at university students studying marketing and strategy.

This academic work is known and been adapopted by global brand leaders like P&G, Mars, Unilever, Colgate and Google for some time. It has only become accessible to everyone else in the past 5 years.

Leadership and innovation

Mike Harris shares his experience of creating totally new and game changing brands by taking a radical approach to providing service to customers in conservative industries.

Find Your Lightbulb draws from Mike’s experience of creating game changers in banking (First Direct and Egg) in telecoms with Mercury and in internet security with Garlik.

This book is about leadership and driving extraordinary ideas through your organisation and creating somethign that will attract more customers.

Behaviour and psychology

Daniel Kahneman reveals why and how people’s decisions and behaviours are not entirely conscious or rational. He discovered that we have two systems in our brain, System 2 is the one we all know about, it is conscious, rational, slow and cautious. System 1 is actually the driver of many decisions, it is unconscious, instinctive, fast and very importantly, we could not function without it.

This book helps you understand why people buy, why emotion matters, what triggers a purchase and you will think differently about how to attract customers when you have read it.

Advertising and marketing communications strategy

This report analyses the results of 998 marketing campaigns. These campaigns were all submitted to the IPA Annual Effectiveness Awards. They were all assessed on the basis of the results and the effectiveness rather than subjective critieria like creativity or design

This report updates an important study called Marketing in the Era of Accountability. It tells you what worked and what did not work so well.

This highlights and confirms the importance of increasing market penetration (i.e. strategy speak for “getting more customers” ) and the role of share of voice in building market share. They also discuss and demonstrate why generating emotional response to campaigns is important to get value for money from your marketing

Looking to the future

Nassim Nicholas Taleb shows us that looking to the future is a bit of a mugs game. The most likely thing to happen in the future is an improbable vent that you cannot predict. So stop worrying about it.

His writing is dense and a bit inaccessible, he is a mathematician and ex stock trader with a big brain. But what he writes about is important and has implications for strategy and practical decisions. I wrote about what we should do about this in 2008 in this post.

My conclusion is we should spend less time worrying about the future. We should spend more time strengthening our ability to withstand unexpected shocks. Read here

Social Media

There is increasing evidence that digital marketing and social media are attracting a disproportionate share of advertising revenue as these new media have become more fashionable “must haves” in your marketing plan.

Penny Power takes a different approach and shows us what social media is really for and how to use it to build a following and create a network that will help you and your business and even how the network will help each other.

Penny’s approach echoes the whole Attractive Thinking ethos. It is about attracting people not broacasting to them and capturing them.

This book is a classic, it may be 7 years old, but it is not out of date. It reveals some fundamental truths about who we are, how we interact and what that means for your business, brand and marketing plan.

Strategy

Richard Rumelt has studied many strategies and the book has loads of examples. This makes this very practical and well grounded. Richard invites us to look inside the business for what we can do and what we are good at.

Rumelt dispels popular misconceptions about strategy – such as confusing it with ambitions, visions or financial goals – by very practically showing that a good strategy focuses on the challenges a business faces, and providing an insightful new approach for overcoming them.

Remember a strategy is merely a set of actions designed to achieve a particular goal. This book will bring you back to what really matters, so you create a plan that will work

Getting recognition and being recommended

This book together with the KPI programme showed me a whole buch of stuff that is known by entrepreneurs and not so well understood or taught in large corporate environments.

Daniel Priestley highlights five steps that are essential if you and/or your business are to gain recognition and be recommended. Daniel has talked with thousands of entrepreneurs and gained insight into the problems they have to overcome. The KPI method is an effective way to overcome them.

If you want to develop your career and be secure in your ability to attract customers or employers, then read this.

He has followed this up with another book called Oversubscribed how to get people queuing up to do business with you.

Avoid being misled by common sense

In the 2001 election, William Hague created the Common Sense campaign for the Tories. It did not work.

“Why is the Mona Lisa the most famous painting in the world? Why did Facebook succeed when other social networking sites failed? Did the surge in Iraq really lead to less violence? And does higher pay incentivize people to work harder? If you think the answers to these questions are a matter of common sense, think again.

Common sense is one of the most dangerous ideas that pervades general thinking and our decision-making. Yet science nearly always demonstrates that many ideas that were common sense were plain wrong. (e.g. sun goes round the earth). Duncan Watts will help you fine tune your antennae to detect common sense ideas that are misleading or just plain wrong.

And another 5 books

Inevitably I found it difficult to nail this list down to 10. But the list above is my top 10. Here are my next 5.

Viral marketing, The science of sharing. Shows what goes viral and why
Switch, How to change things when change is hard: Argues that we need only understand how our minds function to unlock shortcuts to switches in behaviour.
Contagious: How to Build Word of Mouth in the Digital Age: Does what it says on the tin
Marketing Manifesto: The booklet from the Marketing Society on what marketing leaders must focus on to increase their effectiveness and impact download here. I helped the team to create this book.
The One Thing You Need to Know: This helps you discover the question you need to answer, get the right answer and then get everyone else to agree with you. You will be better at pitching within a corporate environment.

Why the ski industry needs better products to attract more skiers?

Posted on May 4, 2015 by Chris Radford

On Tuesday 5th May, I gave a short talk at Listex on how ski companies, tour operators and resorts can attract more customers. Listex is a forum where the ski trade meets to discuss business development and why customers and suppliers do business

The talk discusses how the ski industry has focused on keeping its loyal customers, but now needs to recruit new enthusiasts into the sport. The sport is at risk of its current baby boomer customers retiring from the activity and not replacing them with younger blood.

Here are the slides with the transcript of the speech attached to each slide in the notes.

Attracting more customers

Here is the transcript of the talk

The idea for this talk was promoted by two articles that I saw in Planetski last week. The first was a quote from the 2015 International Report on Snow & Mountain Tourism which stated that visitor numbers in ski resorts have been declining year on year for 5 years in all the major ski markets. Even France and the US which had been doing better are now in a 5 year decline. The second story was from Phil Smith of Snowworks in Tignes. Phil reported he had enjoyed a great season and things are looking up. In fact skiing is so addictive, that people will always want to come skiing and there is nothing to be concerned about. How can both of these things be true?

The subject of this talk is how can we attract more people to skiing, whether as an industry as a whole, as a resort in particular or for your own business. If numbers are down, this is a matter we need to address.

For those of you I have not met yet, I founded Differentiate as strategy consultants to help CEO’s and business owners to learn how to buy a shares and bridge the gap between the insights they have about their customers and the creative decisions you make about developing products and creating marketing plans to attract customers. I used to be a marketing director at Pepsi and since I have consulted with global brands like Mars as well as high end B2B service providers in Finance, Law and Technology. I am also a director at Henry’s Avalanche Talk teaching skiers how to stay safe and have more fun off-piste. This involves avalanche awareness and off-piste equipment training.

My aim today is to prompt a debate about within the ski industry about the need for game changing new products and services that will attract more people to skiing and get some lapsed skiers to come back to the sport.

I will talk about the subject in three different sections.
First I will discuss why the numbers of skiers are down
Second I will talk about a principle of good marketing. I will discuss the debate about penetration vs loyalty and show why it is essential for good marketers to focus ion increasing market penetration. Or in simpler language, attract more skiers to take part.
Third, I will discuss why having better products is essential before discussing better marketing. I will show some tips on how to start the process of developing better products.

So are the numbers really going down? This report from Crystal shows estimates of the numbers of British skiers going on holiday over the past 5 years. Whilst there was an expected drop with the recession and a bad snow year, this is starting to look like a trend. Numbers are difficult to get here, but this is a trusted source.

The 2015 International Report on Snow & Mountain Tourism looked at all visitors to ski resorts in every country across the world. So this includes locals visiting the resort as well as people on longer holidays. What is interesting to us, is that the alps has shown a consistent decline over the past 5 years. There is growth in Asia, but everywhere else is down. So why might this be happening.

Skiing is often thought of as a younger persons game, just for fit people. Well in my experience, you need to be fit, but you don’t need to be young. When I am in ski resorts, I increasingly see large numbers who look more like this group here. A lot of us were recruited into skiing as young adults in the 1980’s and 90’s. This generation of Baby Boomers and GenX have fuelled the growth of snow sports, by joining in the then choosing to go skiing more often each year. But some of this group mare getting less able as they get older. And I am not convinced the sport is recruiting younger adults to replace them.

And younger people have a far greater choice of things to do than we could do in the late 20th Century. Exotic adventurous travel options have exploded, from Asia and America’s back packing to surfing to kit surfing, mountain biking, charity and physical challenges, yacht racing. All these things are competing for the adventurous travellers pound. Many of these activities are more accessible and less expensive than they were due to cheaper flights and the internet helping people discover ideas about what to do.

Another element in the mix is that sometimes people have bad experiences when they go skiing and it puts them off, especially if they are on the first or second trip. This research by the ski club measured net promoter scores for tour operators and resorts. This was done among 15000 skiers and they found that for some the experience was not good and they would not recommend it. This variability will be putting some people off.

So that covers my first point and offers some reasons why the numbers are down. I am sure there are other reasons you could come up with, but this is a start.

My second point is to discuss the marketing debate around Penetration vs Loyalty. There is quite a fashion for loyalty programmes and CRM. Now these are all useful to a point, but we must not lose sight of the fact that business only grow when they attract more customers. This was established as proven fact by an early marketing academic, Andrew Ehrenberg in the 1960’s. His work has been followed up by Byron Sharp who published a book on it in 2010. Study after study has shown that the difference between bigger businesses and small businesses is not how loyal the customers are, but how many customers they have. It is not possible to get growth without increasing your market penetration or in other words attracting more customers.

A second study conducted by the Institute of Practitioners in advertising has confirmed this. This study looked at 1000 entries for their marketing effectiveness awards. The winners were selected for the business results and cost effectiveness, not for their creativity. And 95% of the award winners had set as their objective to increase market penetration.. Only 5% of the awards went to campaigns that had set loyalty as their campaign objectives. Loyalty programmes did not win effectiveness awards.

So this is my second point, No-one ever achieved significant growth in their business without attracting additional customers. We have to attract more skiers if we are to grow the industry.

Now my third point is about why the best and easiest way to get more customers is to create better products, we cannot just rely on better marketing. It is better products that attract customers first. And as shown by Michelle in an earlier presentation, most great marketing campaigns either draw attention to product improvements or use product improvements as a tool to communicate the brand value and the brand attraction.

I will start by asking you how you view your customers? Do you see them as a target to be lassoed into your business and then you must find ways to attract as much money as possible from them? Are you like this cowboy looking to entrap and ensnare customers? I call this approach value extractors.

Or do you see your job is to find out what customers need and want, to find out what would really help them and then develop something that delights and surprises them. People buy things when they have a problem to solve or a need to address. If they see you offering the perfect solution to that need, if you offer the missing piece in the jigsaw, then all you have to do is let them know about it and then they will just buy it. I call this approach value adders.

In my experience prime value extractors are banks, insurance companies, utility companies, mobile phone operators. These businesses exploit our reluctance to switch providers. So they focus on how much money they can charge and how little they can do to help to ear that money. Whereas big successful branded companies like Apple, Google, Unilever P&G, Mercedes, Mars, they all know we have the freedom to switch, they cannot trap us so they invest in attracting us with better products.

Now all the big game changers in every industry are value adders. They are people who put … better products before better marketing.

So what are the characteristics of better products? What makes a product better? Here are a selection of brands and products that have all shaken up their industry when they launched. They each looked at their markets and said, “there has to be a better way”, “we can make the customer experience better”, “we can make it quicker, easier, better value”.

Easyjet challenged legacy airline carriers by making it easier to buy the tickets and removing all the complex terms and conditions that were designed to trap fliers into spending more money. Fridays speeded up property conveyancing to help people get their homes more quickly, Netflix ensured we could watch what we wanted at any time and made it easy to use, Paypal made it possible to transfer money and easier to pay for things online.

So these are characteristics of game changing products and services, I am sure you can think of some more.

And last week I saw this guy present the game changer in power supply. This will disrupt the energy supply industry. Elon Musk used the money he made from selling Paypal to invest the Tesla car, but he is now going further and has just launched the Tesla PowerWall. He looked at energy supply and climate change and said we have to do better. He noticed the sun provides more energy than we need. Solar panels are getting better, the problem is it does not work at night and we had not found a way to store energy from the sun.

This product is the first battery than you can install at home to plug the gaps when the sun does not shine. Read more here http://chrisradford.net/using-better-products-not-better-marketing/

The phrase he used repeatedly is “It just works”. This is I believe the ultimate attribute of better products. Iron out the glitches, find the disruptions, improve the customer experience, re-engineer the product, then you will find the game changer.

So how do we develop better products? Where do we start? The first principle is to start with the problem or need the customer has. No-one ever spends money without a problem to solve or an occasion to sort out or a need to fulfil. When you go to the supermarket, you do not have a list of products, you have a series of occasions and needs to fulfil. There are kids coming home from school, meal times to feed, people coming round, clothes to be washed etc etc. The start point for product development is understanding these problems and needs.

What might these problems be for skiers and ski holidays?

The first one is that we all like to spend time with our family in a nice way and are looking for ways to do that. Skiing is a great way to do this. People also love to spend time with friends and an activity like skiing is a great way to do it. But you will notice that skiing is not the only answer to these problems. But ensuring ski holidays address this need in the best way is one way to develop better ski holiday products and services.

The second problem is that it is often a bit grey and gloomy at home in the winter. Many of us are looking for ways to escape the gloom, get some sunshine, get out doors and cheer ourselves up in the winter. Again, skiing is great for this, but it is not the only way to do it. This is a powerful driver for ski weekends as well I think.

The third problem that skiing addresses, is that increasingly we are looking to push ourselves a bit harder, we are looking for a physical challenge. Again skiing is a great answer, but not the only one. Other adventurous sports or charity challenges can do this equally well.

So that covers three problems and needs that people have that ski trips can address. But what are the things that stop people going skiing, what puts people off. This will provide some insight into developing ideas for better products and services.

It was hard to find research on this, but I tracked down two studies. The first is a report from the Ski Industries Association in the US, this looked at reasons regular skiers did not go in any one year. The top reason reflects the fact that skiing is a social activity and they said they had no-one to go with. They also cited that other activities sometimes seem like a better option. A significant number thought they were just getting too old for it. This is that Baby Boomer generation who are opting out of skiing. The last point was a fear of getting injured because of the consequences in the aftermath and the following months.

The second report I found was published by the University of Edinburgh and looked at PE students and teaches and what put them off going skiing. They raised quite a few points but this slide starts with the cost of the holiday and importantly the cost of acquiring the clothes and associated equipment. The sport is difficult to learn and this a big psychological hurdle. Some complained that the slopes are getting too crowded these days.

So these are examples of insights that can support and help product development and can help in the creation of better products.

So please remember “no-one ever achieved significant growth in their business without attracting additional customers”.

Customers are looking for something that solves a problem …

Our job is to solve it for skiers and prospective skiers and we need to provide something that is better than the alternatives.

So in this talk, my aim was to provoke a debate about the need for a game changer in products and services for skiers. This is the key weapon to attract more customers into the sport, into the industry and into your business. I have talked about why the numbers of skiers are declining, I discussed the need to increase market penetration and not just get more customer loyalty. The best way to this is to develop better products not just rely on better marketing. The start point for better products is to understand what problems and needs customers have that skiing holidays can address. Our job is then to develop better ways to solve these customer problems.

You can find a copy of this presentation and talk on my blog on ATTRACTIVE THINKING at www.chrisradford.net.

If you are interested in doing some research into customer needs or turning your insights about customers into better products and better marketing, then please do get in touch
You can Sign up at : chrisradford.net, you can follow me on Twitter : @chrisradford10 and I always welcome connections on LinkedIN

Contact: Chris Radford chris@differentiate.co 020 8432 9772

What Makes a City Attractive?

Posted on March 9, 2015 by Chris Radford

I borrowed this blog title from this video on How to Make an Attractive City?

This video presents an excellent example of “Attractive Thinking”. The producers have used one of the most important techniques in understanding what makes things attractive to people. The video is all about using the insights to turn cities into places that people love to live in and to visit. The producers at The School of Life have identified the six characteristics that define cities where people love to hang out.

These six characteristics are what I would describe as the Power Drivers. By which I mean the most powerful attributes that characterise places that cause people to choose one city over another. So what are these things

Not too chaotic yet not too ordered. We like symmetry and order, but not too much. The best cities often have ordered buildings, squares and layouts. But not overwhelmingly mono in style. This is an ordered chaos. e.g. Paris, Rome, Bath, New York
Has visible life. Whilst people claim to like privacy, we actually like to be around others and see other people enjoying themselves. We congregate in squares and streets where things happen. We do not visit sterile suburbs or anonymous business parks.
Are compact. Cities are big but they have parts of cities you can get around easily by foot or public transport. These parts are not too big. They are broken up into squares and public places. People live in densely packed areas but have public parks and squares. The squares are just the right size whereby you could recognise and see someone across the other side
Have orientation and mystery. Cities are big but they have places with lanes and streets where you can walk and get a bit lost and make discoveries. Alleyways feel homely and intimate. There is something to discover. We need wider boulevards to allow for mobility and fast access. But it is best when these are combined with warrens of streets
Scale. Many cities make people feel small as the buildings and the transport roads dwarf them. Often the biggest buildings are devoted to large corporations and financial firms. These are not things people love. The most attractive cities have limited most buildings to 5 or 7 stories high and maintain regular sizes in any one street. When there is something bigger it is related to what matters to people, theatre, church, museums sports etc.
Make it Local. Create individuality and use local materials not just another skyscraper of office tower that could be anywhere. Think of the stone in Edinburgh and Bath. The Portland stone of St Pauls, the style of Venice.

There is more in the video

The point I wanted to bring out, is that to make a product attractive to people, to make it into something people will love, you have to know the things that are most important to people. Some of that you can find out by talking to people. But some of it relies on your insight and imagination. More on discovering Power Drivers later….

Better products vs better persuasion?

Posted on May 22, 2014 by Chris Radford

creating better pensions products I have been spending some time with pensions professionals who are grappling with how to make pensions work better for the whole population. There is clearly a problem for many of us. Many people will not have adequate provision for income in their old age. This kind of customer problem presents an opportunity for the industry to do some better persuasion and better marketing. But it also offers an opportunity to create better products.

I have noticed that the debate about better pensions highlights two different ways you can approach trying to solve a problem for your customers.

The first is to try and persuade people to behave differently

The focus here is how to get people to buy what you provide or sell. This is what many business leaders are trying to do in different industries. It is an important activity to get growth. This seems to be the main focus in pensions.

Much of the pensions industry discussion is about getting people to take pensions more seriously. It is about getting people to save in a responsible manner. This is manifest through the government’s auto enrolment scheme; by advocating the provision of independent advice via IFA’s; via the development of training and financial education for people.

The implication of this approach is that people are behaving irrationally. We just need to change our ways. We are not looking after ourselves and need educating and coercing into investing so we have a pension. Then we need advice to take income from a pension fund in a responsible way rather than blowing it all away on holidays. Then we will have a better retirement. This financial education and advice sounds very worthy and well intentioned.

Now I can see that much of this analysis and the need for different behaviours is true. Many people are headed for a poor retirement as a result of their inaction. But I would argue it is blinkered to concentrate only on trying to persuade people to behave differently. Most of my experience says that trying to educate people to behave differently is very hard, it is an uphill slog with few rewards.

Alternatively, it can be much easier to create something that people actually want, that they see as solving a real problem for them. That way they will be attracted to the solution rather than feeling badgered into it. So …

The second way is to create better products

Is the pensions problem just that people are behaving badly? Or maybe the products on offer could be better? Maybe the problem is not just that people are behaving stupidly, but that the products and services that are available just do not meet the real needs of ordinary people all that well and that the industry could also help people by developing better products? It is clear from the National Association of Pension Funds’ Workplace Pensions Survey October 2013 that there is a perception amongst many ordinary people that pensions cannot provide for their future. There is a lack of trust.

In my experience, when there is a lack of trust then educating or marketing alone will be very hard work and may not be effective. We need better products.

What are better products?

Better products Well “better” usually means things like

easy to understand – so you know what you are buying
easy to access – online often does this, or being in the right shops
deal direct with the customer, no intermediaries – intermediaries often add cost and slow things down, they need paying and do not have the same priorities as the customer (think of travel agents)
better value for money –
solves a real problem for a customer – (Tesco click and collect service)
does not exploit the laziness or ignorance of the customer (utilities often do exploit this)
takes care of the customer (First Direct)

Online solutions often deliver a lot of these elements which is why there is so much growth in online products and services.

An good example of an industry transformed by better products is to try and remember the short haul airline industry before Easyjet, Southwest Air and Ryan Air. The airline industry has been transformed by these game changers. Look at how much better it is for customers today. Easyjet and RyanAir were Game Changers.

An easy mistake to make is to think your industry is more complex and more difficult than the industries where game changers have created change and that better simpler products are not possible.

The pensions industry knows it has unique challenges and is more complex than the airline industry was. That may well be true. But the top executives of traditional national airline carriers British Airways, Lufthansa, American Airlines all thought their business was complex and did not really innovate until the low cost carriers arrived with better products.

Come to our event on 29th May

We are running an event next week that looks at how the most successful leaders have created better products and services to deliver real real game changers in different industries. The event is called Game Changers and is on 29th May at 1400 at Campus London in Bonhill St Shoreditch (see details here)

One of our headline speakers is Mike Harris who is the original financial services game changer. Mike created First Direct and the Egg card internet banking business. Mike will talk about what it takes to be a game changer. Mike will share some insights on how to do this.

Another speaker is John Scriven from South Bank University, Marketing Science and the Ehrenberg Institute. John has some surprising and ground breaking insights under the title How brands grow – what marketers don’t know? John will share insights that are used by many of the worlds top companies on how to present better products to customers.

More information about the event is here www.gamechangers1.eventbrite.co.uk. Tickets are free. It is just 3 hours during the afternoon. there will be some debate around the case studies and examples.

If you have any thoughts or comments on this please add them to this article which is posted in the GameChangersUK linkedin group. This is an online group that will continue the debate.

Four reasons people do not buy your product or service

Posted on October 30, 2013 by Chris Radford

I was reading through some posts in our mentoring support forum the other day. I saw a comment from Mike Harris. (Mike was the CEO who launched First Direct banking, he went on to transform Mercury Telecoms, then created the EGG bank and started up and sold Garlik, the personal internet security firm).

For reference, here is Mike talking about value propositions at our recent EGL event

Insight from Mike Harris

In the forum post he made an observation about why corporate deals and negotiations can fail at the last hurdle. Mike highlighted that when corporate deals fail this is usually for a number of reasons.

The value proposition isn’t strong enough for the corporate
The value proposition hasn’t been communicated effectively to or within the corporate
They don’t believe you can deliver
They don’t believe the economics

I was struck immediately by the parallels between this thinking and what EGL does for our clients. Mike’s thinking can be converted to help you in your approach to creating products and services that customers want to buy.

How to convert this thinking to action in your business?

Mike’s comment does not only apply to corporate deals, it explains why people buy from you or not. For those of you thinking about your products and services and your position and value in the market, you can take each of these points and turn them into an insight about why people DO NOT buy from you. You can translate this into the four reasons people do not buy from you.

The value proposition isn’t strong enough for them ( your product or service does not solve their problem)
The value proposition hasn’t been communicated effectively to them (they don’t think your product or service will solve their problem)
They don’t believe you can deliver (not sure you have the ability or resources to solve their problem)
They believe thay can get something else good enough for a lower price (someone else can solve their problem)

Have a think about a prospect or consumer that did not buy your product or service and identify which of these thoughts might have been true for them? This should lead you to an action that will help you win the customer next time around.

Attractive Thinking

Blog and website from Chris Radford

Tag Archives: Why people buy?

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