There are few more powerful insights you can generate than learning the main contexts in which demand for your product/product category arises. Having such knowledge will allow you to elevate your marketing and develop deeper, more profitable relationships with your customers.
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Step 1: identify the most frequent demand contexts
The first step in unleashing the power of context is to identify the different contexts in which
demand for your product is triggered. Think of yourself as a detective attempting to answer the questions:
- Under what situations do people become interested in my product?
- What triggers their interest in my product? (Events, changing circumstances, etc.)
In sleuthing your way to an answer, you may find that there is a series of events that take place before demand is sparked. You will also likely learn that there are several distinct demand contexts for your product, some of which will occur with far greater frequency than others.
Your key objective in step 1 is to assemble a list of those demand contexts that account for at least 75%-80% of total demand for your product/product category.
Step 2: ask the 6 power-questions to elevate your marketing strategy
For each of the most frequently occurring demand contexts for your product, ask the below six questions:
1) How can I tweak or reconfigure my product to better meet the consumer need in the given context?
2) Are there complementary products or services I should consider offering, whether though my company or a partner?
3) How might I adjust my pricing to better reflect the value provided by my product within the given context?
4) How can I more effectively communicate & position the value provided by my product within the given context? Is there specific imagery, tonality & language I should use in my marketing communication?
5) Are there any changes I should make from a channel perspective, whether it be my channels for building awareness, for selling, or for servicing customers?
6) How can I detect when demand has been triggered for this given context? Can I actually identify these people with some degree of certainty? (Dig deep to answer this crucial question. There is almost always a way)
(Note that some of the questions may not be pertinent for certain product categories and demand contexts)
Let's make this pop! with a brief real-world example
Product du jour: Cars
Step 1: identify the most frequent demand contexts for cars
-The lease is expiring on the existing car
-The price of gasoline jumps and the person owns a gas-guzzler**
-The car is old & worn out (tail pipe tickling the pavement, etc.)
-The car died & resuscitating it would cost a whole lot of money
-The person is moving from the City to the ‘Burbs
Step 2: ask the 6 power-questions for each frequently-occurring demand context for cars
**Below I've answered the questions for the demand context in which the price of gasoline jumps and the person owns a gas-guzzler
1) How might we tweak our cars to better meet the needs of the owners of gas-guzzlers?
We could develop a fuel-efficient car or one that could run on cheaper types of fuel (given the long R&D cycle for new models, auto companies are always best suited to have such a model either always available for sale or one that can easily be ramped up for production)
2) Are there complementary products or services we should consider offering, whether though our company or a partner?
We could develop services or partnerships that would cheapen the price of gas - e.g., partner with credit card companies to develop attractive cash-back rewards on gasoline purchases
3) How might we adjust our pricing to better reflect the value that our cars provide to owners of gas-guzzlers?
Consumers who are feeling increasing pain at the gas pump are likely willing to pay more for a car that will significantly reduce their “gas pains”... Then again attempting consumer-level pricing can be tricky and a risky move from a brand perspective (not to mention the current distribution structure for cars does not readily lend itself to such a pricing strategy).
4) How can we more effectively communicate & position the value provided by our cars to owners of gas-guzzlers? Is there specific imagery, tonality & language we should use in our marketing communication?
We could position our cars as “fuel-smart” alternatives that could save them thousands of dollars, which could be put towards more enjoyable things than gasoline, such as a much-needed vacation in the Caribbean(!)
5) Are there any considerations we should make from a channel perspective, whether it be our channels for building awareness, selling, or servicing?
(Response not included to maintain brevity)
6) How can we detect when this demand trigger has been fired? Can we identify the owners of gas-guzzlers during a spike in gas prices?
Knowledge of rising gas prices is a layup - CNN & our local gas stations would make any major rise in gas prices abundantly clear. And, there are a number of ways to identify owners of “gas-guzzlers” with fairly good precision, starting with identifying the geographic distribution of SUV sales & SUV dealerships.
Your assignment
1) Select one of your products or services – especially one that you believe has the most “improvement potential” & could provide the most upside for your business.
2) With a pad & pen in hand, walk the product through Step #1. Also, ask colleagues and friends & family to complete Step #1. And, hold a brainstorming session if timing & calendars permit. (I’ve always found the collective IQ of a good group to be far greater than any one individual flying solo)
3) Take each of your top demand contexts and run through Step #2. For this step it is particularly valuable to hold a brainstorming session or two, as the collective brainpower of your colleagues in this step can be the difference between a $1mm idea and a $10mm idea.
4) Share your experience with us here on the blog, including any interesting things you learned from the process and, of course, any successes you have to-date.
A note on business strategy & demand context
In a future post I’ll be writing about the role that the demand contexts of your product should play in (re)designing your business strategy. Depending upon a number of factors including the economics of your business and the positioning of your brand, there are likely certain demand contexts that you would want to focus your efforts upon. More to come on this, so stay tuned...
And, as always, please feel free to leave a comment, question or shout-out.
Sources: car demand contexts based upon 2005 study by the American International Automobile Dealers (AIADA).