Selling Blue Elephants

SELLING BLUE ELEPHANTSHow To Make Great Products That People Want Before They Even Know They Want Them

AUTHOR: Howard R. Moskowitz & Alex GofmanPUBLISHER: Pearson EducationDATE OF PUBLICATION: 2007252 pages

Selling Blue Elephants By Howard R. Moskowitz & Alex Gofman

THE BIG IDEA

Selling Blue Elephants is about a single concept, the process of Rule Developing Experimentation, or RDE. The text divides the concept into several sections that examine real-life scenarios, the applications of RDE on product development and graphic design, and the use of the process in areas like technology and politics.


WHY YOU NEED THIS BOOK

Selling Blue Elephants by Howard R. Moskowitz and Alex Gofman introduces the concept known as Rule Developing Experimentation, or RDE. This process is designed to help marketers have their cake and eat it too. It gives customers randomized ideas and allows them to provide useful feedback before the product is even created. RDE can be applied not only to marketing departments, but also to research and development (R&D), customer service, and product analysis fields. The purpose is to create disciplined methods of experimentation that business leaders can use in many different situations, without having an expert knowledge of statistics or analysis.


RDE CONCEPTS

RDE starts with a marketing or design goal. The goal may be to create a product, or to choose features for a product, that will attract customers. It could be a monetary goal for increasing sales, or an analysis goal of finding out what a particular market segment is interested in. As a process, RDE is meant to provide solutions for many different business needs, including ideas, packages, products and services. There is no significant limit to RDE applications. One of its main goals is to show businesses what customers want and like, even when customers cannot describe the need or the solution themselves.


RDE CONCEPTS

The key advantage of RDE is its rule-based focus. RDE solves problems and encourages learning instead of the guesswork that businesses can fall victim to if they are not wary.


RDE EXAMPLES

In the software industry, one of the first adopters of the RDE process was Hewlett Packard. In the late 1990s, HP was facing a marketing crisis. All technology fields are subject to frequent change, and companies like HP must rapidly design, create, market and sell a never-ending line of new products. The company’s creation process was excellent, but marketing and planning were becoming issues. Competitors like Sony and Apple were appealing to customers by showing how superior their products could be, while HP was still focusing on product features.


RDE EXAMPLES

Using RDE, HP discovered that its products could appeal to two different consumer categories. The first category was technologically savvy individuals who understood the value of separate components and enjoyed putting features together into ideal products themselves. The second category was individuals who liked the idea of a complete package that they could use immediately without making any technological decisions. This discovery allowed HP to narrow the marketing focus and create more effective advertisements. Within a decade, very few technology companies were using focus groups at all, finding them slow and uninformative. HP’s online use of RDE has become a widely practiced method.


RDE EXAMPLES

Back in the 1980s, Maxwell House saw the beginning of this coffee revolution, and realized they had a problem. The traditional method for Maxwell House and other coffee companies was to hire a group of experts who, like wine tasters, would taste a cup of coffee and describe its aspects at length using terms such as “fruity,” “burnt,” and “compound.” With market and economic changes abounding, Maxwell House decided it needed to change, so they began running large-scale customer tests on their coffee brands. At first, the results were discouraging. Customers did not appear to like Maxwell House coffees as much as the expert panel had led the company to expect.


RDE EXAMPLES

By the end of their testing, Maxwell House was able to use their RDE process to separate customers into three primary tongues: those who liked strong, bitter coffees; those who enjoyed rich aromas but moderately strong tastes; and those who liked weaker coffees all around. The tests showed them what types of beans each group enjoyed, allowing the company to customize future brand-name blends for different drinkers.


CUSTOMERS AND RDE

Kay Jewelers is a good example of this. In the late 1990s, they launched a study to create better messaging and bolster falling diamond sales. The goal was simple—increase sales—but Kay Jewelers wanted to find out what attitudes and mindsets their customers had regarding diamonds and the jewelry business as well. To do this, they created silos, or collections of product benefits or brand features that fit together. Kay created silos such as emotional benefits (“for celebrations that are truly special,” “I feel good when others notice the jewelry I am wearing”), jewelry descriptors (“diamonds, when nothing else will do,” “jewelry with a classic look”), customer perception, display descriptors, and others.


CUSTOMERS AND RDE

Following the RDE system, Kay experimented with different marketing techniques and began to realize something important. Their consumers, from a marketing perspective, fell into different segments just as coffee tasters and technology users did when it came to buying products. A segment of positive consumers was balanced out by a segment of negative consumers. By testing a variety of brochures, Kay discovered that positive customers enjoyed customized shopping experiences, selection and service, and the certainty of shopping at a location more than once.


DESIGN AND RDE

RDE experimentation in this field has yielded three key principles that govern how businesses should approach design and RDE questions.

Principal 1: Democratize. For many types of RDE, the method must be based on an internet tool that can be used by anyone with an internet connection, even those with limited experience in using computers. Like HP, many electronics companies have discovered that the more consumers they can involve in their studies, the more applicable the data will become. This may require extra time in RDE test design, but the payout is worth it.


DESIGN AND RDE

Principle 2: Think genomically. The genomic model of RDE uses an electronic database that gathers customer data so multiple businesses can use it at the same time. Genomic RDE uses collections of surveys and data on sales in multiple industries, combined with psychological profiling, to generate basic information about what customers are buying and why. Businesses can look at the model when making basic decisions, and use RDE to get widespread customer feedback through massive online networks.


DESIGN AND RDE

Principle 3: Think innovation and recombination. Once winning features are identified, designers must create their product concepts, then start all over again. In these rapidly changing industries, two levels of RDE are necessary: one to identify what features customers want, and one to see which products that have these features customers prefer most.


DESIGN AND RDE

Of all the concepts involved in design or R&D, one of the most important is the mind genomics database, or the information that shows businesses what customers think about products in general. There are three reasons for businesses to embrace mind genomics and the potential it offers as technological capabilities increase:

A central, archived source of actionable information about the consumer/customer. A key problem in discerning customer desires and needs is the incredible amount of information available in nearly every industry.


DESIGN AND RDE

A source of trend information. While surveys can gather information on customer buying habits, the database of RDE results can allow businesses to look at customer preferences as a whole movement and a development over the entire market. This information is more useful than knowing only that customers want the same sort of products, but with better features.


DESIGN AND RDE

A source of new product ideas. When done correctly, RDE will not only create customer data for current features, but ideas for future features that customers want. This allows business to take customer innovations and make hybrid features they can use in upcoming product lines.


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