R.O.I. By Frank J. Rich :Awareness, Use, and Innovation

R.O.I. By Frank J. Rich

Awareness, Use, and Innovation

June 3rd, 2013
By Frank J. Rich

 

Cycles are a persistent part of most things. Even the weather, though seemingly capricious in nature at times, delivers the seasons with cyclical preciseness. In efforts to simplify the world we live in, no less a complicated marketplace, cycle analysis helps. Cycle time reduction is one of the methods applied to organizational change that squeezes efficiency from random growth. And efficiency reveals the advantage of speed.

 

As the “Point Zero Five to Five Rule” suggests, only .5% to 5% of the time, in most products and services, is there value being added. The conclusion: only cost and not value is being added. Consequently, most cycle time analysis models not only simplify but enable processes with more efficiency, flexibility, less cost, and improved quality.

 

How might enterprises employ a simple cycle analysis that sees through the complicated math-based cycle models to drive growth? Let’s give it a try.

 

Product and service offerings must be apparent to buyers before they can exercise their choices. Thus “awareness” campaigns are employed to raise the consciousness of buyers looking to fill their needs, wants, or acquisitiveness. The constant ringing in the ear of commercial societies is the ever present “selling” of goods. There is always something to buy, the psychology of which we might address at another time.

 

Few can avoid the temptation of appealing offerings. What do lottery winners do first, even if next they give much of their winnings away? They buy something for themselves; usually something they would not have bought in their former state. What do we buy; mostly things that are advertised. Awareness is accomplished mostly through advertising. And commercial societies have endless ways of doing it. Even companies that begin by offering something free, most often find ways to sell advertising to generate revenues – Amazon, Google, Facebook.

 

Once having raised awareness, an enterprise must establish the practical use of its offerings. Easy enough to consider products and services of a commercial entity, charitable and not-for-profit enterprises are no less subject to the same market influences. Value is currency of exchange. Until it has been established between buyer and seller (charity and donor) the two do not meet in the marketplace. And while a complex market dynamic adjusts value, the simple measure of it is more or less apparent to most. We will make a donation to a charity if we are aware of the “need” it exposes, and then as we see the importance of contributing to helping meet it. In the commercial environment awareness is no less critical, but the value dynamic is more complex, often moving from impulse to research and evaluation before a purchase is made.

 

That said the practical use of something – giving or purchasing – forms a model that characterizes the way in which “buyers” identify, access, and use a product or service under circumstances. Know this “use model” well and you will have a quicker path to conversion in the marketplace.

A quart of milk is viewed by most as a staple item of food. But the “value” of milk is what has determined the “use” of it. And more than anything that “value” is based on the view of its healthiness. The “use model” for milk is changing, also for communications devices and nail cosmetology. This critical element in the conversion cycle has helped define market behavior forever.

 

The characterization of products and services is a part of this practical use experience. Consumers (of all things) evaluate their use of them to inform continued use. When we like something we’ve bought we buy it again. We call this a good customer experience. Though not limited entirely to the product – an enterprise trades on four fundamental evaluations – who it is, what it sells, what customers want, need, or are in the habit of buying, and what it delivers. And, it is this experience with its products that contributes most to innovation. Significantly, it is the user of products and services that influences innovation most. The leading indicator of innovation paths is how they spend their money. More of this and less of that, such as milk, are windows into what comes next. And, the creative society that is American enterprise is no less than prodigious at marking this natural cadence, a market cycle.

Frank Rich is founder and CEO of Encore Príst International, an organizational development company that helps individuals and organizations reach their full potential through the practice of effective business fundamentals. You may reach him at fjrich@encoreprist.com, or by phone at 866/858-4EPI.

 

To read other ROIs in their entirety, go to Business tab at Town Link.

 

Bazzo 06/04/13

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