I recently surveyed the most current thinking of the age-old question: “how do you create an effective sales message." and came across an insightful article explaining the the customer phenomenon of "declared preference" versus "revealed preference". This customer behavior has a critical impact on the effectiveness of your sales message and ultimately the success or failure of your product launch.
So, are you even aware of "declared preference" versus "revealed preference?" If you are not, you may be in for a reality check. Marketing professionals must be cautious when using voice of the customer (VOC) research to drive the positioning and messaging for your product launch and not accounting for these research factors. Your unfiltered research findings can be misleading.
This example involves a company that suffered the indignity of a failed product launch by blindly relying upon focus group results and customer interviews to develop the marketing campaign for their new product. The preference phenomenon was not understood or taken into consideration in developing the final marketing message and sales tools.
First, our example company asked surveyed decision-makers to review the "elevator pitch" and marketing messaging. They also asked for input on the top features and benefits and how they should be positioned, and they had literally invited customers to tell them how the value propositions should be worded to create the most impact.
Next, the surveyed customers were polled on which features should be in the various service levels of the new program, and what price they'd be willing to pay for each of those levels. The information was then used to create all of the marketing campaigns and sales tools, including presentations, for the product launch.
Thud is the sound the product launch made after the research results were disseminated to marketing and their salespeople began delivering the sales pitch to customers.
How did that happen? The company had done everything by the book. It had gone to great lengths to wrap its efforts in market research and Voice of the Customer data points.
Well, something happened on the way to customers' actually putting their money where their mouth was. Those customers stood still and stuck with the status quo. Their customers won’t make the change to adopt the new product or new approach. None of the positioning and messaging convinced them to make a change or do anything different.
But why? They had said this was good stuff! They actually helped this company craft the messages. The presentation and promotions even addressed the pain points they'd said they have!
Many economists and researchers have reported that people don't always do what they say in interviews or surveys they will do. Why? Because it's easy to respond certain ways when there is actually no cost involved. You can act more confidently in the hypothetical than when confronted by reality.
Many people, for example, will test as investors with a tolerance for high risk when their financial planners do an assessment, but they start panicking and pulling money from the market as soon as they lose a few points from their earnings—let alone their principal.
And you can find survey after survey of people saying they want higher gas-mileage cars and that they would even be willing to pay extra for "green" cars (and other environmentally friendly products), yet those cars sit on the lots and the green merchandise lingers on grocery shelves.
VOC research tends to consist of declared (or stated) preference. And it can be misleading when actual behaviors are revealed after your product launch.
When you launch a new product, you're asking prospects to make a change. The first "yes" to change must take place when you ask them to do something different. Yet the "why change?" conversation is often neglected in marketing and product-launch messaging. The assumption is that if prospects or customers want to speak with you, they must want to know why they should choose your solution.
So the first "myth" of VOC research is that customers will react to your product positioning message simply because they indicated they would. Their original research survey response, in reality, has nothing to do with whether they are ready, willing, or able to change. The message you are testing, therefore, completely misses the bigger challenge in a product launch.
The second "myth" of Voice Of the Customer research is that the responses express reasons that are important enough to get a customer to change. Customers can tell you about some problems or pains they are dealing with, but that doesn't mean they will actually change to another solution to fix those problems. Why? Because up to now they have found a way to live with those pains, and those pains pale in comparison with a big, risky change management project—which is what you are actually offering.
To be effective in your marketing, you have to make the pain of staying the same greater than the pain of change. Interestingly, the problems, challenges, threats, gaps, or deficiencies that cause customers and prospects to reconsider their status quo are often unknown to them—or, at a minimum, under-valued and under-appreciated. This becomes the real marketing challenge and opportunity; to affect this change. Marketing research should be refocused on understanding the prospects current situation and the uncovering the threats to their position if change is not realized and the status quo is maintained.
On average, six out of 10 qualified pipeline prospects end up in "no decision." That's the majority of your sales cycles. In the case of the failed product launch example, more than 75% of qualified sales leads said "no thanks" and stuck with their status quo.
For your product launch to be successful, you will need to deliberately create "why change?" customer and sales messaging. This is not about gratuitous references to customer pains at the beginning of your campaigns or collateral.
You need to think about the entire first half of the customer buying cycle as creating a buying vision in which the customer understands that his or her status quo is no longer safe, and so gains a sense of urgency for change.
Use the knowledge of your solution's unique and relevant strengths, along with your collective experience solving problems for customers, integrated with the latest customer research uncovering the "why change" scenario to create the executive-level story:
1. Your messages, presentations, and conversations need to deliberately provoke and disrupt the status quo with insights that make existing or inherent problems more apparent.
2. The market research firm must build in "preference filters" to account for the "declared" vs "revealed" product preferences. The research must uncover the gaps in prospects' current assumptions and determine how they are putting their desired outcomes at risk. The research should adequately determine the status quo, and reveal the problems, obstacles and the likely negative scenarios of their current approach.
3. The research should incorporate third-party stats and results to describe the magnitude and imminence of the potential negative outcome if the current approach is not altered.
4. The research should guide you on incorporating the "why change" discussion into your customer selling and give you the information you need to create compelling messages and effective selling tools.
The bottom line: refocus your marketing research on revealing the "real" customer preferences and uncovering the most compelling reasons to implement the needed change to adopt your solution. Then you won't be mislead by the Voice of the Customer research "declared" responses and you will be able to execute an effective successful marketing campaign.
I want to give credit to Tim Riesterer, the chief strategy and marketing officer of Corporate Visions for the article upon which the blog is based.