Written by Mary Duggan, ICIC
Many small businesses thrive by creating products that meet the demand of their customers. For instance, a water supply company delivers bottled water to office locations in order to meet consumer demand for in-office filtered water. But few small businesses move from fulfilling demand to creating demand. Understanding how to do so can mean big rewards for the small business owner, but it requires a better understanding of customers and adaptation of goods and services.
In the most recent CEO Series Webinar, Steve Polo, managing partner at design consultancy firm OPX, shared with audience members how to create real demand for products and services.
What is demand creation? According to Polo, “demand creation” happens when you create a product or service that only you can provide. The example Polo cites is Apple’s iPad. Nobody needed an iPad. Heck, nobody even knew what an iPad was when it was first released. Was it a computer? A laptop? An over-sized cell phone? We weren’t sure, but we all wanted it! In being the first to the market with a product customers didn’t need, but wanted, Apple was able to charge whatever price it wanted for the product (at least, initially).
Polo provides strategies for demand creation:
Polo warns that while demand-creation can open many new doors, it can also be very challenging. Specifically, people associate established firms with an existing identity. These identities are tough to change—both internally among staff members, and externally among consumers. Communicating what you’re doing and then tying it to benefits that accrue to everyone is important.
Second, once you create new demand for a product or service—competitors will take notice! At one point in time, Apple had the only tablet on the market. Now, there are several competitors and Apple has had to innovate and lower its price on the iPad, a market it once dominated (and really, still does through innovation). Be sure to adapt to competition as it arises.
To listen to the entire CEO Series Webinar, click here.
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