Why Didn’t We Think of That?

By Pragmatic Institute August 01, 2009

Chapter 1 -Why Didn’t We Think of That?

Products and services that resonate.

The Japanese salaryman works notoriously long hours. He’s in the office until 10:00 or 11:00 p.m. and often goes out for drinks and maybe some karaoke singing with colleagues after that. But there’s a problem. In the big cities such as Tokyo and Osaka, the last train leaves for the suburbs around midnight.So as a result of a long day and a few beers, when a Tokyo office worker gets on that last train, he often falls asleep.

Sometimes he misses his stop.

When the train pulls into the station at the end of the line, the conductors pass through the cars and find a surprising number of sleeping salarymen. They do what’s necessary to wake up the wage warriors and push them out the train door. The dazed salarymen then make their way into the quiet night—briefcases in hand, neckties askew—and find themselves in a rice-growing country town many miles from the city. They’re also far from their home stops, which passed by an hour before (perhaps as they were dreaming of that perfect rendition of “Take Me Home, Country Roads” at the karaoke bar).

Next train home? Not ‘til first thing in the morning, still three or four hours away. A taxi? Several hundred bucks. Instead, our accidental travelers notice a hotel just across the street! And there are vacancies!

And so the blue-suited businessmen head toward their unexpected deliverance. When they arrive at the hotel, they’re greeted and perhaps handed a toilet kit with toothbrush and razor. Best of all, they’ll pay far less than they would have for taxi fare. A place to sleep until morning…problem solved.

Who would have thought to build a hotel at the end of a train line, far from anywhere important? Well, smart Japanese hotel owners tuned in to a previously ignored market problem that a well placed hotel could fix.They identified a particular buyer of hotel services (the overworked and exhausted salaryman), and they’ve built growing, profitable businesses around that niche—in the least likely places, like lonely towns many miles from the nearest big city. (Similar inns, such as Well be Hotels in Nagoya, have sprung up near stations in busy business centers and cater to those who miss that last train completely.)

We’re fascinated with success stories like these—buyer experiences that resonate because they perfectly address market problems that people are prepared to pay money to solve. We’ve identified the patterns of success (and failure), and in these pages we’ll introduce you to dozens of products and services that resonate with their markets. We’ll also tell you about some that don’t, and we’ll explain why not. Most importantly, we’ll teach you the Tuned In Process so you can replicate the winners’ success in your own organization.

Tuned In shows you how to find overlooked marketplace problems that, if solved, bring in customers who willingly buy your products and services without being coerced.

Tuned In—the process

In the book, we will share the Tuned In Process, a six-step method for creating a resonator: a product or service that so perfectly solves problems for buyers that it sells itself.Starbucks, American Idol, and Google are resonators. Were these products and services created by people smarter, luckier, or born with more talent than the rest of us? No. We’ll show you that real success in the marketplace is not based on creativity or clever marketing. Anyone can create products and services that resonate. All you need to do is stop guessing what people need and start spending your time building real and deep connections to what your buyers value most. We’ll show you how to apply the Tuned In Process to find unsolved problems in your marketplace and how you can create breakthrough experiences for which people are eager to spend money.

As we introduce the Tuned In Process, we’ll use dozens of examples of companies that have tuned in to their markets and created resonators. We’ve studied the introduction of thousands of products, including those from large, well-known companies such as Ford Motor Company, Microsoft, and GE; breakout bestsellers from Apple, Red Bull, and Google; and niche offerings from players you may never have heard of, such as National Community Church, Go Pro, and Zipcar.

We’ll explore what it takes to transform your organization by cultivating a tuned in culture and how to become and remain a market leader.

What’s fascinating about the tuned in approach is that it works amazingly well for all kinds of organizations. We’ve identified nonprofits, business-to-business enterprises, e-commerce companies, independent consultants, churches, and even dentists and lawyers who have created resonators and built growing and profitable businesses. Although they serve a wide variety of markets, these different types of organizations all have the same potential to discover resonators. By being tuned in, they can listen intently, embrace buyer needs passionately, and work diligently to create the best possible customer experience.


Any organization—companies large and small, nonprofits, government agencies, entrepreneurs and independent professionals, even churches, authors, and rock bands—can benefit from getting tuned in, because they’ll start to create the products and services that people want to buy.


The realtor who resonates

Tuned In IconIn our experience, real estate agents lack differentiation—other than the company names on their business cards and the kind of cars they drive to ferry clients from house to house. Other than these characteristics, realtors seem interchangeable, don’t they? When you go to list a home, a realtor says, “Sign here. We take 6% commission, and I’ll need an exclusive agreement… By the way, how soon can you have the house clean so I can show it?” And like most salespeople, many realtors immediately talk discounting by asking, “What’s the lowest price you would sell the home for?” By being insular and not understanding the true problems faced by people who want to sell their homes, the typical real estate agent focuses on the wrong things.

We’ve often mused about how much more successful realtors would be if they tuned in to their marketplaces. What if a realtor spent time understanding market problems first? Could he or she then build a breakthrough product experience in what most people say is a commodity business? After all, real estate listing services are all pretty much the same, right? What if this renegade agent also used the Tuned In Process to establish authentic connections with buyers—would they earn more business as a result? Could real estate services resonate and create a platform to build a thriving and profitable business? Could someone break out of the pack?

Well, we have our answer, or rather, our agent. His name is Russell Shaw, and he has been a realtor in the Phoenix area for 30 years.Shaw is associated with a realty firm, but that’s where his similarity with other realtors ends. He approaches building and marketing his services by being tuned in. Shaw built his business, the Russell Shaw Group, by first understanding the problems that sellers face:

  • “I want my home to sell fast.
  • “I want to get as much money for my house as I can.”
  • “I would like to avoid realtor’s commissions if I can, but I hesitate to try selling my home myself because of the risks involved.”
  • “If my realtor is not meeting my expectations, I don’t want to be stuck with a long-term contract.

Shaw’s breakthrough product experience is the “No Hassle Listing.” Using Shaw’s service, sellers list with him for a reasonable 4% fee, but still have the option to sell their homes themselves and owe him nothing (although they can still use Russell Shaw Group to help with the escrow work for a 1% fee if they wish).

“Our objectives are to get you the most money in the least time and with the fewest hassles,” Shaw says. “We want to provide the best service in the industry. Period. We want to make you so satisfied you listed your home with us that you will gladly refer us to your friends.”

Shaw articulates his idea by stating that he is “applying for a job” with you. If you aren’t happy with the job he does, you can fire him at any time with no obligations or costly consequences. But odds are that you will be happy, because the average home listed with Russell Shaw Group, even during the slow 2007 housing market, sells in less than 30 days (versus 108days for other realtors in the area), and most of Shaw’s listings sell for the full price. If you’ve ever sold a home, you’ll likely agree with us that this idea is a resonator.

Shaw spent two years identifying and refining his ideas about which problems resonate with home sellers. He tuned in. Shaw even gives potential clients a list of 14 questions to ask his competitors, questions that show the No Hassle Listing system is in a class by itself. Shaw generates so much business from it that he requires a support staff of 16 people, including six listing/buying specialists, two transaction managers, seven administrators, and even a marketing manager!

Finally, a realtor who understands the problems sellers face and has a solution for them! While the average realtor sells eight to 12homes a year, and “top” realtors sell 22 to 30 homes a year, Shaw sold a remarkable 418 homes in 2006.

“Many agents think their most important job is satisfying the customer,” Shaw says. “I don’t think that’s true. I believe that satisfying the customer is simply the minimum requirement for staying in business. My staff and I work constantly to improve our systems, processes, and services to go well beyond the standard level of ‘service’ provided by most agents.”

Would you recommend your realtor to your friends?

We’re convinced that if tuned in people like Shaw can build a resonator in a crowded and long-established market like real estate, you can too.

Getting tuned in

Tuned Out IconHow hard is it to get connected to a market and create a product or service that people want to buy? Based on our decades of experience working with thousands of companies, we’re here to tell you that getting tuned in is not difficult. But creating a resonator does require anew way of thinking about how you build products and services and how you introduce them to the marketplace. Most organizations are tuned out.In fact, we see all kinds of organizations make the same common mistakes again and again.

Here are a few common mistakes that cause products and services to fail:

  • Guessing—Assuming company insiders know more than buyers do about what they want to buy
  • Assuming—Basing products and services on what current customers request rather than on an understanding of unsolved problems that potential customers will pay money to fix
  • Telling—Trying to create a need in the market by relying on expensive advertising or an army of salespeople

We’ve developed the Tuned In Process to allow companies to create success again and again. We see these same principles at work in a wide range of successful product experiences, such as business-to-business technology products, fast food chains, and professional services firms. We know for certain that if you apply the six steps of the Tuned In Process to your own business (no matter what you sell), you will have a much better chance at success.

The resonator

The process for replicating success starts with getting tuned in to potential customers. Understanding your market and your buyers through in-depth interviewing is by far the most effective way to discover unresolved market problems that people will pay money to solve. Meeting with potential buyers on their own turf (in their homes or workplaces or even on the street) is the starting point for identifying a resonator: a breakthrough product or service that buyers immediately understand has value to them, even if they have never heard of your company or its products before. The iPod is a resonator. When it launched, FedEx was a huge resonator, and it still is.

The Anatomy of a Resonator:

  • The perfect solution to a specific problem
  • A product or service that people want to buy without being coerced
  • An offering that establishes a real and direct connection to what your market values most
  • An idea that people immediately understand has value to them, even if they have never heard of your company or its products and services

When you see a powerful, smartly articulated idea for a product or service that solves a problem for you, such as the iPod (“1,000Songs in Your Pocket”) or FedEx (“When It Absolutely, Positively Has to Be There Overnight”), you immediately grasp its meaning. It resonates.These words aren’t mere taglines or slogans dreamed up by an agency and peddled with expensive advertising. You can learn to systematically develop powerful ideas like these by studying the Tuned In Process.

Tuned in organizations are much more likely to create resonators. The culture of tuned in companies incorporates focused, “outside-in” thinking, instead of the typical inside-out orientation. In other words, the tuned in company constantly listens to, observes, and understands the problems that buyers (“outsiders”) are willing to pay money to solve instead of holding endless meetings of company “insiders”—all trying to guess what people want. The tuned in organization is always looking for more opportunities to create resonators.

The tuned in organization

The most successful organizations are tuned in to their markets. Leaders at these companies largely ignore the competition. Instead, they focus their energies on the problems that buyers are willing to spend money to solve. The concept applies to any business, product, or service:

  • Tuned in companies—large and small, established and upstart—resonate when they create products people want to buy. Nintendo’s Wii revolutionized the gaming industry when it created a fun, simple, interactive experience that enabled groups of friends and families to play virtual sports, action, and war games without any previous experience with video games.
  • The tuned in entrepreneur solves real problems in the market rather than creating some widget because he or she thinks it’s cool. Richard Branson, a serial entrepreneur, has developed 350companies over a 30-year career through his Virgin brands, each aligned to solve a discrete market problem that he and his team identified.
  • The tuned in professional services firm(lawyers, doctors, accountants) doesn’t just create a “me-too” practice and stick the same old advertisement in the Yellow Pages. Instead, these firms leverage the new rules of marketing to build an online audience. Search for anything related to Kansas and family law and you’ll find Grant D. Griffiths at the top of the list. Griffiths takes a thought-leadership approach to marketing his firm; and, consequently, he makes connections that bring him several new potential customers a week…free.
  • The tuned in nonprofit understands people’s motivation for contributing money and time to a cause.Habitat for Humanity has experienced more than a decade of consistent growth in donations of time and money, due in a large part to its creative strategies for partnering with local community, church, youth, and government organizations.Habitat for Humanity has built more than 200,000 homes.
  • The tuned in politician understands voter problems and the reasons why people vote for a particular candidate.Barack Obama’s campaign raised more than $31 million in its initial phases (top among all U.S. presidential candidates in the early part of 2007) with a platform centered on a powerful idea, “The Audacity of Hope.” At this writing, the election is still a long way off, and Obama is not the frontrunner. But his upstart candidacy clearly resonates with many voters.
  • The tuned in church connects to people’s spiritual and emotional needs with services that resonate across traditional and non-traditional mediums. Joel Osteen now counts more than42,000 weekly attendees at his services, and millions more through his TV and online communications. His book, Your Best Life Now, has sold more than 2.5 million copies.
  • The tuned in entertainer, rock band, or motivational speaker understands the tastes or needs of his potential audience. Jon Stewart tuned in to young TV viewers and resurrected a fake news program that attracted a strong and committed daily audience on an obscure cable channel. His humor and creative representation of current events resonated across age groups, building a strong following in his time slot.

We’d argue that the tuned in job seeker creates a better picture of themselves as a candidate for employment when they talk about solving an employer’s problems rather than embellishing their own credentials.

Is Tuned In for you?

At this point, we suspect that you’re saying to yourself something such as “Hey, that’s obvious!” or “It sounds easy.” We frequently hear these sorts of reactions when we present these ideas live in our speeches and seminars. If that’s what you’re thinking, you’re right! One of the beautiful things about getting tuned in is that it’s easy to understand how to do it. In fact, many successful business leaders had been applying these principles successfully long before we began teaching the process or writing it down in this book.

But hold on!

  • You’re probably also thinking: “If it’s so easy to understand and it makes so much sense, why don’t more companies get tuned in?” As it turns out, numerous organizational pitfalls can get in the way. We meet with companies all the time whose executives struggle to answer some very basic questions:
    • What business are we in?
    • What businesses are we not in?
    • Who are our buyers?
    • What’s unique about what we offer?
    • What’s our positioning strategy?
    • How can we compete?
    • Why do the other guys seem to win more often?
    • How can we turn a profit?

When we hit these walls with business leaders, we ask ourselves why. How could they not have any answers to these fundamental questions? What we’ve come to realize is that most business professionals just aren’t tuned in.

Rather than focusing on buyers and their problems, the organizations that struggle to resonate in their marketplace are the ones that develop offerings from the inside out.

Instead of going out into the marketplace to try to understand people’s problems and then bringing this information back to the company, tuned out companies try to develop products exclusively within their own walls, based solely on what they already know. Then they try all sorts of gimmicks and buy expensive advertising to take the dissonant ideas out into the market. This inside-out approach (what we call being tuned out) is much more likely to lead to failure—and to struggles with answering questions like those above.

 

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Pragmatic Institute

Pragmatic Institute

Pragmatic Institute (formerly Pragmatic Marketing) has continuously delivered thought leadership in technology product management and marketing since it was founded in 1993. Today, we provide training and present at industry events around the world, conduct the industry’s largest annual survey and produce respected publications that are read by more than 100,000 product management and marketing professionals. Our thought-leadership portfolio includes the Pragmatic  Framework, eBooks, blogs, webinars, podcasts, newsletters, The Pragmatic magazine and the bestseller “Tuned In.”

 

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