From the Ask Tom mailbag:
Question:
I use questions to coach my team members, and they provide answers but not always the right answer. As a result, the conversation can appear like an inquisition. It’s challenging, at that time, not to revert to “telling” rather than “asking“.
Response:
If you are asking a question and you don’t get the response you want, it’s not because the response is wrong, it’s because you are asking the wrong question.
Last in a series with Victor Cheng, a San Francisco based business coach, and author of the Recession Proof Business.
Tom:
It’s expensive to create a new product or engage new customers in a new service. How does a company make those decisions without getting spread too thin?
Victor:
Start small. Take baby steps.
In the software industry, companies “invent” new software technologies that exist only in the minds of the management team. First, they create a PowerPoint presentation describing the software (that does not yet exist). Then they market the product as if it existed.
This is known as “slide-ware” (software that does not exist in a form other than PowerPoint). Critics of this process call the product “vaporware” because it doesn’t yet exist in physical form.
In the direct marketing industry, this is called a “market-test”. They create a marketing promotion for a non-existent product, send the direct mail piece, and count the corresponding orders — then promptly refuse to take the customer’s money.
The idea is to see if the product will sell, before committing R&D dollars to actually creating the product.
Find the cheapest, easiest way to “market-test” demand. If you can present “slide-ware” and get a large purchase order out of it, that’s a very favorable sign the product is worth investing in development.
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You can download a free e-copy of Victor’s book, The Recession-Proof Business. This concludes our series with Victor Cheng. He’s a bright guy, check him out.
Fourth in a series with Victor Cheng, a San Francisco based business coach, and author of the Recession Proof Business.
Tom:
How can a company best determine whether a new product or service is something their customer cares about?
Victor:
If the product or service is one that’s easily understood by customers, the easiest way, is to just ask them.
If the product or service is highly innovative, then this approach is unreliable. It’s like asking people who have never seen a mobile phone what they think of it. The cannot grasp the value of the innovation.
In this instance, the better approach is to ask yourself “What problem does this product/service fix for my customer?” and then ask customers how much they care about this problem.
So if I were market-testing the iPod + iTunes combined service, I would ask customers the following:
Q: “How do you find new singers/artists or songs that you might like”
A: “I listen to the radio at work/home”
Q: “And when you listen to the radio and come across a song you really like that you’d like to hear more often, what do you do?”
A: “I drive across town to go to the music store.
Q: “Do you buy the single or the whole album?”
A: “The whole album.”
Q: “Why do you buy the whole album, instead of just the song you like? How do you feel about this?”
A: “It’s the only way they sell the music. $15 for the one song I like. Expensive.”
Q: “How long does the whole trip take?”
A: “1 – 1.5 Hours.”
Hopefully you can see where I’m going with this line of questioning. If the breakthrough innovation is based on fixing a specific problem the customer is very familiar with, be darn sure the customer really cares about the problem a lot… and if they do, that’s a favorable sign that you’re on the right track.
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You can download a free e-copy of Victor’s book, The Recession-Proof Business. Our conversation continues tomorrow.