Article originally posted on Forbes.com. Reposted with permission.
POST WRITTEN BY Radhika Duggal
Years of experience in both startups and large corporations have instilled in me a true appreciation for the critical role that product innovation plays in driving revenue growth. That growth is driven by product managers and marketers who seek to launch game-changing innovation that impacts the ways their consumers live, work, and play.
Doing so requires a precise understanding of your target customer, and while you may turn to market research, without a clear focus on demand-first innovation and growth, research alone simply won’t enable you to drive real innovation. Why? Because it won’t get to the heart of your consumers’ purchase decisions — their unmet needs, pain and passion points, frustrations, fears, culture, and context.
Breaking Down the Demand-first Innovation Framework
Just what is demand-first innovation and growth? Simply put, demand-first innovation is a framework that provides companies with deep, contextual insight into the consumer’s perspective. Demand-first innovation is driven by three core sets of activities:
First, marketers must focus on understanding the consumers they’re trying to serve as individuals interacting with and experiencing their product category, not simply as consumers of their own products. For example, consider that you’re a brand marketer who’s focused on launching a new gym concept that will better meet your customers’ needs. This requires understanding how that customer interacts with all components of the category of health and wellness options — from gyms and focused workout studios to personal training to food and nutrition services to fitness clothing options.
Second, a marketer needs to go beyond the company’s current product offerings and competencies to understand how they can positively influence a consumer’s world. This involves letting go of common practices and the embedded rules of doing business within the company today. Returning to the plight of our brand manager, this might mean challenging the assumption that memberships or initiation fees are required to drive profit.
Third, marketers should seek to see their company and products from the “outside in,” as consumers do. This requires understanding consumers’ behavior to formulate strategies around it — not just to satisfy consumers’ needs, wants, or requirements, but to develop entirely new products they didn’t even know they needed or wanted. This is our example brand manager’s innovation goal: to develop new products and services that reimagine the ways consumers think about health and wellness, while simultaneously making them more successful in achieving their goals.
Product managers and marketers create true demand-first innovation and growth by following a three-part framework.
1. Create a Demand Landscape
A demand landscape is a map that outlines consumers’ conscious and unconscious purchase motivations. The goal is to enable marketers to understand how their consumers live in the context of their culture and emotions. By immersing themselves in consumers’ daily lives through observational market research, marketers can understand their consumers’ unconscious needs, wants, fears, and challenges — the types of insights that consumers simply cannot spout off in a focus group or share through an online survey.
Going back to our example, the first step in conceptualizing a game-changing health and wellness concept is by creating this demand landscape. This involves commissioning observational primary market research like ethnographies and journaling to get a sense of how consumers live their lives in the context of their culture and their emotions.
Analyzing this data sheds light on the inner workings of customers’ minds: both their conscious and unconscious decisions. It enables the brand manager to understand how potential customers think of health and wellness as a category, and within that category, the drivers of purchase as well as their pain points, frustrations, victories, and issues. That output is a demand landscape, and it is the basis of the next step in the process.
2. Reframe the Opportunity Space
Next, it’s time to focus attention on identifying the innovative opportunities that consumers can’t name in traditional research. To do so, marketers must examine customers’ unmet needs in the category as a whole by analyzing the intersection of the pain points, frustrations, and unmet needs identified with gaps not served by competitors in the market.
Returning to our example, as the company pursues the launch of an innovative wellness concept, brand managers must understand how the company can serve the unmet needs identified by the demand landscape (especially needs that customers cannot articulate) through products and services that are truly new to the market. This enables the brand manager to reimagine health and wellness on behalf of the customer, creating innovative concepts and ideas that consumers may not necessarily have verbalized but that are aligned with their goals and motivations as determined through the research.
3. Formulate a Strategic Blueprint
Then, marketers must form and socialize a strategic plan that enables them to pursue newly identified opportunities. This requires organizational alignment to enable the company to change the systems and processes that may have driven company profitability or success to date.
For our example brand manager, he or she will essentially need to develop and sell this strategic blueprint internally to gain alignment. It should include the objectives of the new concept, how the concept aligns with consumers’ conscious and unconscious unmet needs while filling gaps in the market, the company’s competitive advantage, the unique experience it will offer customers, a financial forecast, and an operational timeline. Once the brand manager has gained alignment on that plan, the company is ready to pursue game-changing innovation.
This isn’t to say that product and marketing teams that focus on driving innovation through feature enhancements won’t succeed. There is a strong chance they will, and there is certainly a place in the market to refine and build upon products that have been successfully launched. However, the game-changing innovation that many of us aspire to foster — the kind that truly changes how customers live, work, and play — requires a focus on demand-first innovation.
Radhika Duggal is the CMO at Snapcommerce, a financial services and healthcare leader focused on Gen Z and millennials, and the author of Consumer Behavior: A Marketer’s Look Into the Consumer Mind.