Curt-Earlier, you mentioned Netflix as an example of a company that found their trigger effect. Can you explain how Netflix found their trigger?
Adrian-Yes. Netflix was working really hard in 2001, trying to figure out how to get “fence-sitters” off the fence. Netflix knew they had an offering that was so much better than Blockbuster’s, yet they couldn't figure out the trigger that would move the customer from simply recognizing that Netflix was an interesting, cool deal, to actually using Netflix. They struggled for two or three years to find their trigger.
After years of searching, they found the answer. When Netflix put a processing center in the town of Worcester, Massachusetts, their penetration rate in the New England region more than doubled. So Netflix started putting processing centers in different customer regions, which reduced the number of days it took for customers to get the next DVD from four days to one. Netflix found that penetration went up by 130 percent because of this. Customers loved the faster response, and – they couldn’t stop talking about it.
Curt-From the first day I used Netflix, I was done with Blockbuster. As soon as Netflix came out with streaming video, I turned off the DVD option because I didn't want to wait for a movie.
Adrian-Exactly. Creating a magnetic offer is the really big deal in demand creation. Companies can continue developing their product until they get to the point where customers can't stop talking about their offer. Word of mouth is the single, most powerful trigger out there. Smart companies do a lot of persistent searching to answer the question, "What is it that will get the customer to move?"
What's really magical about these companies is that they have the guts to talk to customers all the time. They understand how skeptical, distrustful, jaded and reluctant we are as customers. These companies understand how difficult it is to overcome these customer feelings, which can persist even when you’re giving the customer a great offer. Smart companies keep looking for the triggers that help the customer buy the things they really want to buy.
Stay tuned for our final installment of this great interview with Adrian Slywotzky. Next up, Adrian explains how hassle maps, magnetic offers and triggers all play a vital part in the nature of demand.