It seems like a long time ago, but in fact it was just last year when we started up a seminar series here in Estonia on how to cope with the recession. I offered one part of that programme. My main point was that where markets are shrinking, customers will focus more on meeting ”needs” rather than “wants”. Companies that are best positioned to meet “needs” will thrive, even in down times.
So what are “needs”? There are a few aspects to getting this right. The first is to ask how well your product or service fits a regular use. New or ad hoc uses (unless they are very sexy) tend to be optional “wants” rather than needs. The second is to ask whether your product or service raises standards with respect to that use. There should be something “better” about what you offer. If so, you have a chance to engage your customers, to create a story line around the value that you add.
My favorite example is the Kindle. Ereaders were generally considered expensive toys until the Kinlde came around. But Amazon focused on improving aspects of the reading experience (the regular use) beyond what books could offer. Not the visuals (the visual experience is not any better), but access and add on services. How about this for a story line to engage you (from Steve Bezos)
We want to offer every book, ever published, in every language, within 60 seconds for $10.
Wow! Here is another nice case study, presented by Om Malik at Giga - Moo. Enjoy!
FOLLOW - In consumer electronics, needs and wants have shifted dramatically. Before the recession higher priced flat screen and HD models were selling. Now NYT reports that consumers are buying products that are “good enough”. The bells and whistles are not needed, and prices are falling.