|Book Review: Selling Blue Elephants|
Selling Blue Elephants: How to Make Great Products that People Want before They Even Know They Want Them
Written by: Howard R. Moskowitz and Alex Gofman. Upper Saddle River, NJ: Wharton School Publishing, 2007. 252+xvi pages.
Howard Moskowitz and Alex Gofman are with Moskowitz Jacobs Inc., a marketing and branding consulting firm. They begin with Dr. Seuss's Sam-I-Am and his aggressive trial-and-error, failing marketing plan for revolutionary green eggs and ham—”on a train,”“in a car,”“in a tree,”“in a house,”“not in a box,”“with a mouse,”“with a fox,” and “in the dark” (Seuss, 1976). Nostalgically we can we all relate to that. But the authors quickly whisk us away from our bedtime reading to Rule Developing Experimentation (RDE)—the topic of this book. RDE is described as “a systematized solution-oriented business process of experimentation that designs, tests, and modifies alternative ideas, packages, products, or services in a disciplined way so that the developer and marketer discover what appeals to the customer,even if the customer can't articulate the need, much less the solution” (p. 3, italics in original).
The authors clarify the challenge: Consumers cannot articulate exactly what they need, want, or like. And they describe the solution: Identify and experimentally explore the factors that could drive consumer interest using systematically designed prototypes and combine features into the best possible combinations (even if consumers never tested those specific combinations). They offer seven straightforward steps: (1) Think through the problem and identify groups of features; (2) design the experiment using these elements; (3) gather consumer reactions to the prototypes; (4) analyze (individual) results; (5) optimize; (6) uncover attitudinal segments; and (7) “dial in” and generate rules to create new products. The result is actionable rules (directions) for sustained competitive advantage and the power of being able to know the algebra of consumers' minds before they can even articulate the need. The authors explain that the most difficult part of the job is structuring the problem; here is where domain expertise is required. They suggest that a culture of perpetual mindful experimentation is needed for continuous learning and thriving innovation that leaves the competition wondering of your strategies.
Next, the authors guide the reader through several proven success stories using RDE. Hewlett-Packard (HP) used RDE to sidestep conventional sequential batteries of focus groups and quantitative surveys (expensive, laborious, slow, and not sufficiently rigorous) to test and optimize new concepts among targeted consumers using a proprietary Web panel. RDE provided HP with the prospect of testing complex offers comprising several elements, allowing it to differentiate itself from the competitors. The most important task for them was to identify specific problems, to structure them, and then to put those features into the RDE Internet tool. Meta patterns emerged across multiple HP RDE studies yielding the benefit of additional consumer insights and segmentation opportunities.
Coffee globalization, competition, and bean prices led Maxwell House (MH) to RDE to maintain quality and to keep price within bounds. Audits (early warning signs) showed the product scored poorly. If other factors like advertising and promotion are equal, marketers, who recognize that, over time, flavor quality and preference may ultimately lead to market share, needed to fix the problem to increase share. The problem (unknown to MH) could be attributed to either quality slippage through continual cost cutting or possibly change over time in consumers' taste, which impacted preference. MH recognized that both the product and the consumer needed to be systematically studied. The developer varied the physical formulation, and researchers brought in the consumers to “crack the coffee code” (p. 39). Three segments were identified related to bitterness intensity acceptance, which allowed MH to develop a “dial-in,” cost-based model to deliver on cost and quality, thus increasing sales 15% at the expense of competition.
RDE can be used to understand the competition's communication strengths and weaknesses by using content analysis of ideas to see which resonate with the consumers. An “ezine” (short for electronic magazine) example illustrates how RDE was applied to how teens think. This competitive intelligence application of RDE shows readers to see not only what works but also how RDE can synthesize new knowledge to generate new offerings. The sequence of steps were (1) gathering and categorizing competitive material into silos (with differing ideas that made sense to consumers in each silo; (2) mixing and matching elements in an RDE design; (3) gathering respondent's ratings; and (4) analyzing the results.
The authors suggest three principles for restructuring the process to make it simpler, faster, and less expensive:
The final chapters of this book delve into the complexities of the modern world with topics such as politics, presidential campaigns, social angst, terrorism, public policies, and the stock market—new vistas for applications of RDE. The closing chapter pitches three questions to the reader: (1) Is RDE feasible? (2) Is it worth the effort? (3) Is there any limit to what RDE can do? Automated technology is available to provide a rapid, turnkey approach to the application of RDE that reveals specific factors that drive consumer acceptance or rejection, which leads to fact-based understanding of consumer perceptions and choices that may save time, effort, and money in the long run. But this does not eliminate the need to structure the problem—RDE forces significant disciplined thinking for successful experimentation.
The authors can be challenged with the following thoughts. First, we are advised the first step of RDE is “to do your homework and structure the problem” (p. 4, italics in original). We are warned repeatedly that this is the most difficult part of applying RDE and is critical for a successful outcome. So how do we go about doing this “most difficult part” (ibid.)? The book dwells on the other steps, seemingly avoiding this difficult part. This brings to mind my matrix algebra class wherein the professor solved the Australian rabbit population explosion problem, proof after proof. His favorite expression was, “Think of something to do, and do it in hope.” I don't recall much about matrix algebra, but I do remember that irritating catchphrase. So, expressions like “algebra of the consumer's mind” (pp. 11, 13, 157, 161) scattered throughout this book and the warning about the “most difficult part” (p. 4) without the necessary guidance brings back that empty feeling. So it appears that there is a fair amount of experience, intuition, luck, cramming, and cramping involved. This book should disclose how to do the difficult— meta-analytical, strategic—thought that goes into structuring a problem for RDE.
Second, many of us could admit to having bought elephant-like things. For instance, a treadmill is not unlike an elephant. If someone did an RDE on me, would they uncover my real needs or just simply needful things?
Third, the RDE process focuses on product features, not consumer needs—the assumption being that consumers don't know what they need and can't articulate that need. No doubt, study of systematically designed prototypes with consumers will provide learning and extend boundaries, but how does one ensure that a truly unmet need has been satisfied against myriad product feature combinations? Conversely, how does one ensure that the real unmet need was not missed?
And finally, the book was all about successes. What about those mutated combinations that survived but weren't successes? Those stories should be shared as well.
Though some critical parts may be missing, valuable insights can be gleaned from this book, which is filled with practical hints and business learning generalizable to other problems. Many historical fun factoids enliven the text. This book leaves the reader feeling wiser having benefited from the experience of others sharing the same problems and challenges. The compelling message from Moskowitz and Gofman that resonates throughout the book is that it is best to develop new prototypes fast, to see what new ideas emerge, and to stay focused on the shifting, wavering, wandering consumer.