Slywotzky talks about his new book, Demand: Creating What People Love Before They Know They Want It.
Along with writing his own business books, Adrian Slywotzky writes for many publications such as Harvard Business Review and The Wall Street Journal. He is a sought after business consultant and a Partner at the consulting firm, Oliver Wyman. Interviewing Adrian was like talking to a trusted friend: you can tell that he has a passion for businesses to succeed. Below, Adrian gives a brief background on his new book, Demand: Creating What People Love Before They Know They Want It.
Curt-I've been reading your books for years. I just re-read The Art of Profitability. I've always enjoyed your work. I think everyone can read your books and get a lot out of them.
Adrian-Thank you very much.
Curt-The Art of Profitability left me with a desire to be more formulaic. I like to see wisdom presented in well-described formulas. This is a theme described in another of your books, Profit Patterns, correct?
Adrian-Yes, that book is along those lines. The profit patterns are, in many cases, more diagrammatic, which means describing the patterns of what happens in the value chain or patterns related to customer action. The book is a combination of stories that a reader can relate to certain situations; a solution is aligned for each situation so that readers can derive the most value from their particular situation.
While I'm continuing to study profitability, the bulk of my new research that will be published in October is about the demand side of the equation: how does demand actually happen? Why do some people create lots of it and others not at all? Why do seemingly similar products have 5x differences in demand?
It all started about three years ago when some clients challenged me to think about the changing nature of demand, and specifically how demand changes over time. This led to a more fundamental question of: how does demand actually happen and who is good at creating it? This becomes more urgent as people begin to discover that we live in a tale of two economies. Companies like Zipcar, Nespresso, Kindle, Apple, Amazon, Bloomberg, and CareMore are experiencing double-digit growth, premium pricing, and incredible customer loyalty. Most other industries are struggling to get any kind of meaningful growth and are confronting a no-profit zone phenomenon.
I have identified a dozen companies that have done a very good job of looking at their product and the competitors, for example, a Kindle versus eReader, a Zipcar versus Connect by Hertz, or Netflix versus Blockbuster before Blockbuster faded. There are seemingly similar products on the market but one company will get 5-10 times as much revenue, market share, and customer volume as the other company. Why?
There are six factors that happened in every case:
Who fixed the hassle map?
Who went beyond a good product to a magnetic product?
Who built the great backstory, riding on the infrastructure of others and doing the right deals with others?
Who was persistent enough to find the triggers that actually caused the customer to buy?
Who had a 45-degree trajectory of improvement verses a 5-degree trajectory of improvement?
Who did the best job of understanding, respecting, and responding to differences among customer types? Or in the consumer world, the differences among how customers behaved in one purchase occasion versus another purchase occasion?
In all of these examples, every company considers each of these factors. From a profitability perspective, the economics of demand are actually quite counterintuitive. The companies found they spent much less money on advertising and pushing their sales force. They benefited much more from adding participants to their demand process, and from the customer conversations that their magnetic offers sparked. Once you draw a hassle map of your customer, you're off to the races for all the other parts of the project.
Stay tuned for the rest of this interview with Adrian Slywotzky. In the next installments, we'll learn about Slywotzky's research on demand and how to apply it to small business, what a hassle map is and how it can increase your customer awareness, and how a business can be magnetic.
CURT FINCH has more than two decades of software development and distributed workforce management experience. In 1997, Curt created the world's first internet-based timesheet application and the foundation for the current Journyx product offering. Curt has a B.S. in Computer Science from Virginia Tech. His book, All Your Money, is available on Amazon. @curtfinch