Start With Why (16 page)

So many decisions (and indeed contract negotiations) are based on an advertising industry measurement called a Q-score—a quotient of how well recognized a celebrity is, how famous they are, so to speak. The higher the score, the better the unaided awareness of the celebrity. This information alone is not enough. The clearer the spokesperson’s own WHY is understood, the better ambassador they can be for a like-minded brand or company. But there is no measurement of a celebrity’s WHY currently available, so the result is obvious. The value of too many celebrity endorsements is the celebrity appeal alone. Unless the audience to which you are trying to appeal gets a sense of what that spokesperson believes, unless that spokesperson is “one of us,” the enforcement may drive recognition, it may even drive sales for the short term, but it will fail to build trust.

A trusted recommendation is powerful enough to trump facts and figures and even multimillion-dollar marketing budgets. Think of the young father who wants to do everything right for his newborn child. He decides he’s going to get a new car—something safe, something to protect his child. He spends a week reading all the magazines and reports, he’s seen all the advertising and decides that on Saturday he’s buying a Volvo. The facts are in and his mind is made up. Friday night he and his wife head to a dinner party. Standing by the punch bowl is their friend the local car enthusiast. Our intrepid new father walks up to his friend and proudly announces that, as a new father, he’s decided to buy a Volvo. Without a thought his friend replies, “Why would you do that? Mercedes is the safest car on the road. If you care about your kid, you’ll get a Mercedes.”

Playing on his desires to be a good father, but also trusting his friend’s opinion, one of three things will happen. Our young father will either change his mind and buy a Mercedes; he will go forward with his original decision, but not without some doubt about whether he’s indeed doing the right thing; or he will go back to the drawing board to redo all his research in order to reassure himself of his decision. No matter how much rational information he has at his fingertips, unless that decision also feels right, stress will go up and confidence will go down. However you slice it, the opinions of others matter. And the opinions of those we trust matter most.

The question isn’t how should car companies talk to the father who bought the car. The question isn’t even how they court the highly influential opinion of his friend, the car guy. The concept of buyer and influencers isn’t a new one. The question is, how do you get enough of the influencers to talk about you so that you can make the system tip?

If I told you I knew of a company that invented an amazing new technology that will change the way we consume TV, would that pique your interest? Perhaps you’d be interested in buying their product or investing in their company. It gets better. They have the single best product available. Their quality is through the roof, way better than anything else on the market. And their PR efforts have so been remarkable, they’ve even become a household name. Interested?

This is the case of TiVo. A company that seemed to have everything going for them but turned out to be a commercial and financial failure. Since they seemed to have the recipe for success, TiVo’s flop defied conventional wisdom. Their struggles, however, are easily understood if you consider that they thought WHAT they did mattered more than WHY. They also ignored the Law of Diffusion of Innovations.

In 2000, Malcolm Gladwell created his own tipping point when he shared with us how tipping points happen in business and in society. In his aptly named book
The Tipping Point
, Gladwell identifies groups of necessary populations he calls connectors and influencers. With little doubt Gladwell’s ideas are spot-on. But it still begs the question, why should an influencer tell anyone about you? Marketers are always trying to influence the influencers, but few really know how. We can’t dispute that tipping points happen and the conditions that Gladwell articulates are right, but can a tipping point happen intentionally? They can’t just be an accidental phenomenon. If they exist, then we should be able to design one, and if we can design one, we should be able to design one that lasts beyond the initial tip. It’s the difference between a fad and an idea that changes an industry or society forever.

In his 1962 book
Diffusion of Innovations
, Everett M. Rogers was the first to formally describe how innovations spread through society. Thirty years later, in his book
Crossing the Chasm
, Geoffrey Moore expanded on Rogers’s ideas to apply the principle to high-tech product marketing. But the Law of Diffusion of Innovations explains much more than just the spread of innovation or technology. It explains the spread of ideas.

If you don’t know the law, you’re likely already familiar with some of its terminology. Our population is broken into five segments that fall across a bell curve: innovators, early adoptors, early majority, late majority and laggards.

As the law states, the first 2.5 percent of the population are the innovators, and the next 13.5 percent are early adopters. Innovators, Moore says, pursue new products or ideas aggressively and are intrigued by any fundamental advance; being first is a central part of their lives. As their name suggests, innovators are the small percentage of the population that challenges the rest of us to see and think of the world a little differently.

Early adopters are similar to innovators in that they appreciate the advantages wrought by new ideas or technologies. They are early to recognize the value of new ideas and are quite willing to put up with imperfection because they can see the potential. Although quick to see the potential and willing to take risks to try new technologies or ideas, early adopters are not idea generators like the innovators. But both groups are similar, as Moore says, in that they rely heavily on their intuition. They trust their gut.

Early adopters, like innovators but to a lesser degree, are willing to pay a premium or suffer some level of inconvenience to own a product or espouse an idea that feels right. Those on the left side of the diffusion curve are the ones who stood in line for six hours to be among the first to buy the iPhone, Apple’s entry into the mobile phone market, even though they could have walked into a store a week later and bought one without waiting. Their willingness to suffer an inconvenience or pay a premium had less to do with how great the product was and more to do with their own sense of who they are. They wanted to be the first.

These are also the personality types who bought flat-screen TVs when they first came out even though they cost upwards of $40,000 and the technology was still far from perfect. My friend Nathan fits this profile. I walked around his house once and counted no fewer than twelve Bluetooth earpieces for his mobile phone lying around his house. I asked him why he had so many. “Did they all break?” I queried. “No,” he replied, “they came out with a new one.” (There were also about five laptops, various models of BlackBerry smart phones and boxes of other gadgets lying about that never quite worked that well.) Nathan is an early adopter.

The next 34 percent of the population are the early majority, followed by the late majority, and finally the laggards on the far right side of the spectrum. Laggards are the ones who buy touchtone phones only because they don’t make rotary phones anymore. The early and late majority are more practical-minded. For them, rational factors matter more. The early majority is slightly more comfortable with new ideas or technologies, while the late majority is not.

The farther right you go on the curve, the more you will encounter the clients and customers who may need what you have, but don’t necessarily believe what you believe. As clients, they are the ones for whom, no matter how hard you work, it’s never enough. Everything usually boils down to price with them. They are rarely loyal. They rarely give referrals and sometimes you may even wonder out loud why you still do business with them. “They just don’t get it,” our gut tells us. The importance of identifying this group is so that you can avoid doing business with them. Why invest good money and energy to go after people who, at the end of the day, will do business with you anyway if you meet their practical requirements but will never be loyal if you don’t? It’s not too hard to recognize where people fall on the spectrum once you’re in a relationship with them; the opportunity is to figure out which is which before you decide to work with them.

We all sit at different places on this spectrum depending on the product or idea. Most of us are fiercely loyal to certain products and ideas at various times and demonstrate left-side-of-the-curve behavior. And for other products or ideas we exhibit right-side-of-the-curve behavior. When we sit on one side of the spectrum, we often have a hard time understanding those on the other side because their behavior doesn’t make sense to us. My sister is an early adopter when it comes to fashion trends, whereas I’m firmly in the late majority. It was only recently that I finally caved and bought a pair of overpriced designer blue jeans. I admit they look good, but I still think they aren’t worth the money and I can’t understand why my sister thinks they are.

In contrast, I’m an early adopter for some technologies. I bought a Blu-ray DVD player before they had perfected the technology. I paid about four or five times more for it compared to a regular DVD player. My sister can’t understand why I waste my money on all that “useless stuff,” as she puts it. We will never see eye to eye on this stuff.

Each of us assigns different values to different things and our behaviors follow accordingly. This is one of the major reasons why it is nearly impossible to “convince” someone of the value of your products or ideas based on rational arguments and tangible benefits. It’s the ol’ Ferrari and Honda Odyssey debate again. Designer jean companies (or my sister) can talk to me until they are blue in the face about the importance of fabric quality, design and workmanship—it goes in one ear and out the other. Similarly, it can be proven, beyond a shadow of doubt, the rational benefits of choosing a $500 DVD player over a $100 one; my sister won’t hear a word of it. And so the game of manipulation ensues. Again, although always effective, manipulations don’t breed loyalty and they increase costs and stress for all parties involved.

Most people or organizations that have something to sell, be it a product, service or idea, hope to achieve some level of mass-market success or acceptance. Most hope to penetrate the bell of the curve. Getting there, however, is easier said than done. When you ask small businesses about their goals, many of them will tell you they want to be a billion-dollar business in X number of years. The odds of that happening, unfortunately, don’t look good. Of the 27 million businesses registered in the United States, fewer than 2,000 ever reach a billion dollars in annual revenues. And 99.9 percent of all businesses in America have fewer than 500 employees. In other words, mass-market success is really hard to achieve.

Big companies have similar challenges repeating their mass-market success. Just because they’ve done it once or twice doesn’t mean they know how to do it every time. The Zune, Microsoft’s entry into the multigigabyte mp3 player market, for example, was pegged to “take on the iPod.” It didn’t happen. Even if the quality is superior, there is more to succeeding than just the product and the marketing. Don’t forget, the superior Betamax technology did not beat out the substandard VHS technology as the standard format for videotape in the 1980s. The best does not always win. Like any natural law, the Law of Diffusion must be considered if mass-market acceptance is important to you. Refusal to do so will cost a lot of money and may result in a mediocre success, if not complete failure.

There is an irony to mass-market success, as it turns out. It’s near impossible to achieve if you point your marketing and resources to the middle of the bell, if you attempt to woo those who represent the middle of the curve without first appealing to the early adopters. It can be done, but at massive expense. This is because the early majority, according to Rogers, will not try something until someone else has tried it first. The early majority, indeed the entire majority, need the recommendation of someone else who has already sampled the product or service. They need to know someone else has tested it. They need that trusted, personal recommendation.

According to the Law of Diffusion, mass-market success can only be achieved after you penetrate between 15 percent to 18 percent of the market. That’s because the early majority won’t try something new until someone else has tried it first. This is why we have to drop our price or offer value-added services. We’re attempting to reduce the risk tolerance of these practical-minded people until they feel comfortable to buy. That’s what a manipulation is. They may buy, but they won’t be loyal. Don’t forget, loyalty is when people are willing to suffer some inconvenience or pay a premium to do business with you. They may even turn down a better offer from someone else—something the late majority rarely does. The ability to get the system to tip is the point at which the growth of a business or the spreading of an idea starts to move at an extraordinary pace. It is also at this point that a product gains mass-market acceptance. The point at which an idea becomes a movement. When that happens, the growth is not only exponential, it is automatic. It just goes.