Innovate or die is a common catchcry in business. But like any generalisation, it’s not always entirely the whole truth.
Every business has a core audience. Those who make up 80-90 percent of your market. Loyal people. Often rabid. Coke versus Pepsi. Holden versus Ford.
So why would you risk offending this market by ditching popular lines?
Arguably the most celebrated example of this is Coca-Cola – with New Coke. Remember the backlash from millions of loyal Coke drinkers who absolutely hated the “new, improved” version. A version that none of them wanted.
Fortunately for Coke, they were big enough to survive and had to sheepishly beat a hasty retreat. I find the “Tastes just like Coke, no joke” slogan hugely ironic.
Or how about your favourite restaurant where you always order the same thing. Suddenly they’ve completely changed the menu and you decide never to go back.
So what on earth possessed them when deciding to go down this path?
Two things come to mind.
The first is boredom. You get bored with your current product or service. After all, you’ve been doing the same thing day in and day out for years. So you decide to ditch it and go for something more exciting (for you).
The second is feeling the pressure to improve and innovate. Yes, it’s important to innovate, but are you doing it for the sake of doing it or are you truly improving your customer’s experience? And do your customers really want this “improvement”?
Either way you risk throwing the baby out with the bath water!
People are creatures of habit and once they find something they like, they tend to stick with it. Familiarity here gives a sense of comfort and belonging. We wrap it around us like a warm blanket on a cold, winter evening. So changing too much, too soon can feel like someone’s forcefully taken the blanket off you. Not a pleasant feeling!
But you know you need to keep up with the times and innovate, so what can you do?
First of all, don’t radically change everything!
Keep doing what you’re doing and slowly add new products and services. Now measure what percentage of your customers take up the new products and who stays with the old.
You’re likely to find the following…
5% to 10% of your clients will resist change of any kind. They’ll want to keep the status quo.
Around 55% will be open to trying something new, and if they like it, move back and forth between items – for example favourite menu items in a restaurant. For instance, Barbara and I have a favourite Vietnamese “hole in the wall” place. Call us boring, but we both have the dishes. A number 5 and a number 12. Don’t even know why we bother looking at the menu!
Another 5% to 10% will immediately go for the new and totally forget about the old stuff and not care if it doesn’t exist anymore.
And it’s not just products and services that you need to take into account.
If you’ve always dealt with people in a particular way, don’t radically change it just because it’s more convenient and a lower cost for you.
For example if you’ve always allowed your clients to call you on the phone for support, don’t force them into logging tickets on-line. Yes, you think you’re servicing them more efficiently as you keep better track, but believe me that’s not what your customers think. (And this has been borne out in large numbers of customer interviews we’ve conducted.)
Another example is Financial Planners who have completely changed their charging model from earning a percentage of funds under management to fixed price yearly fees. Not everyone wants the latter and you risk losing business if you force the issue.
Understand that change is difficult for most people and it scares them.
If you’ve got something that works, stick with it. Just because you get bored does not mean your customers are. If a particular promotion is working, keep running it. Yes you need to test variations, make incremental changes, but always keep doing what works. Anything else is foolish and a way to rapidly go out of business.
And when you do change things (hopefully for your clients’ benefit and not yours), make sure you communicate these benefits to your audience in a way that’ll make them go, “Great – that really works for me and you’re making my life easier etc.”
McDonalds is a great example of getting it right.
They knew there was a big push for “healthy choices” so slowly introduced lower calorie choices like salads and wraps. They continually communicate the benefits of the new menus and constantly test and measure to see what’s being eaten to gauge popularity. I recently saw an ad for McDonalds Gourmet, now available in takeaway! Go figure!
But they’ve never ever removed the staples – the Big Mac, Quarter Pounder, Soft Serve Ice-cream etc. They know that a very large percentage of their customers want these and would not come back if they couldn’t get them.
And it’s the same for your business.