By Adrian Slywotzky with Karl Weber
(Crown Business, 357 pages, $31)
Massachusetts-based consultant Adrian Slywotzky believes we live in two economies. One dominates the headlines, with stories of a slowdown, unemployment and ebbing demand for products.
But there is another economy in which the demand engine is operating on overdrive, as a handful of companies are not just outpacing their competitors but doing exponentially better than their peers. Those companies enjoy runaway growth, premium pricing and extraordinary loyalty because they create new products and services that excite people.
He set out to study those companies, and better understand the mystery of demand. The matchups he looked at included Amazon's Kindle versus the Sony Reader, Facebook versus MySpace, the Toyota Prius versus the Honda Civic Hybrid, the iPod versus Sansa MP3 player, and Eurostar versus Air France.
In some of these cases, today's laggard was actually in the market first – Sony, for example, had a three-year head start on the Kindle, but was unsuccessful in its Japanese launch while the Kindle soared.
"Closely examining these anomalies and many more like them, we discovered that demand is often created by a special breed of person with a number of unique insights and behaviours – yet the skills these people practice can be learned and practised by any leader and by any team," Mr. Slywotzky declares in Demand, co-authored by writer Karl Weber.
At the core, he says, "demand creators" spend all their time trying to understand people. They try to understand our aspirations, what we need, what we hate, and what we love. "By watching how people actually behave in their own worlds, and by talking to them constantly, demand creators figure out how to solve the big and little hassles we all face – and they make our days easier, more convenient, more productive, and simply more fun. They wind up creating things people can't resist and competitors can't copy," Mr. Slywotzsky writes.
Here are the six steps that demand creators follow:
Make it magnetic
Most of the new products and services that come into the marketplace are good or even very good. But demand creators realize that's not enough. "They don't stop developing their product until it's absolutely irresistible, generating excitement and conversation everywhere. When it comes to creating demand, it's not the first mover that wins; it's the first to create the emotional space in the marketplace," he writes. Toyota's Prius and the Kindle have that magnetic spell, whereas the Civic Hybrid and Sony Reader lack that magic.
Eliminate the hassles
Many consumers suffer with flawed services or products whose features waste time or money. Demand creators map out the hassles that dominate so much of daily life, and figure out ways to alleviate those frustrations. For example, California-based CareMore is a specialized health service that focuses on elderly people; it offers car service to get patients who have trouble getting to appointments and puts electronic scales in their homes to register sudden weight gain that might indicate congestive heart failure.
Build a complete back story
It's what you don't see – what happens behind the scenes – that can determine whether a product succeeds or fails. Mr. Slywotzky calls that the "back story," and says you can fail if you only have 90 per cent of the back story in place. You need it all working well. Sony's first e-reader, the Librié, launched in 2004, had the same E-Ink technology as the Kindle, but it could only be used for a handful of books, which had to be downloaded while tethered to a computer, and which were snatched back if you didn't read them in time. The back story was incomplete.
Find the triggers
Most people who hear of a new product remain fence-sitters, unsure whether to buy. Demand creators find triggers that move them out of that inertia. For Netflix, the answer was to establish distribution warehouses across the United States, ensuring delivery of a movie disc in one day.
Set a steep trajectory
When demand creators launch a product, they immediately look at how quickly they can improve it. "They know that every improvement they make – technical or emotional – will unlock new layers of demand, and leave less open space for imitative, piggybacking competitors," Mr. Slywotzky writes. British food retailer Prêt à Manger constantly reinvents its offerings, even those that are already very popular. Its chocolate brownie has been revised 36 times and its carrot cake 50 times.
Go beyond average
Demand creators realize that one size does not fit all. They recognize the notion of an average customer is a myth, and they find efficient, cost-effective ways to create product variations that match the various types of customers they want to attract. The book details how the Seattle Opera, for example, built its audience by developing a series of musical offerings for high-school students.
A lot of the material in Demand is known. But there's a richness to the book – the stories selected are excellent, and the six steps are well-rounded – that might help product innovators and marketers to improve their efforts.
An unusual example of making a product magnetic and eliminating hassles is the policy at Bloomberg LLP that stock or bond traders who lose their job get to keep their precious Bloomberg machine at home for four months – free of charge. "Perhaps only a onetime trader who'd been unceremoniously sacked, like [Michael]Bloomberg himself, would have the intimate understanding of the customer hassle map required to even imagine such an offer," Adrian Slywotzky notes in Demand. "Think of the psychological boost this service offers a trader battered by a firing – and of his improved odds of finding a new job with the Bloomberg information stream keeping him current." And you can bet when offered a job, the trader will demand a new Bloomberg subscription as part of the employment package.
Special to The Globe and Mail