For most companies, the problem with radical differentiation is the “radical” part. If nobody’s doing it, you’d be crazy to do it yourself, right? Wrong. In fact, if you’re looking to become the leader in a new market space, the rule is just the opposite. If ANYBODY’S doing it, you’d be crazy to do it yourself. You can’t be a leader by following the leader. Instead, you have to find the spaces between the fielders. You have to find a zag.
What stops most companies from zagging is the cloud of uncertainty that follows innovation. In an effort to remove the cloud, marketers often conduct focus groups, which, while helpful in some situations, are notably unhelpful for encouraging innovation. This is because radical differentiation doesn’t test well in focus groups. When you ask people what they want, they’ll invariably say they want more of the same, only with better features, a lower price, or both. This is not a recipe for radical differentiation. This is a recipe for me-too products with pint-sized profit potential.
A better way to judge a new offering is to map customer feedback against a success pattern. When you draw a chart with two axes, one for “good” and one for “different,” you can see how your business concept stacks up against other successful zags. You can also begin to see why most companies are fooled by focus groups.
On the chart, the “good” axis can include any attributes that customers typically value: quality workmanship, good aesthetics, low price, high functionality, ease of use, speed, power, style, and so on. These are the qualities on which most offerings compete. The “different” axis is for any attributes that make an offering, well—different. These can include attributes that customers may characterize as surprising, weird, ugly, fresh, crazy, offbeat, novel, and so on.
As with other charts of this type, the best place to be is in the upper-right corner—in this case, where good and different combine to create a successful zag. Classic examples are the Aeron chair, Citibank, Toyota Prius, Charles Schwab, and Cirque du Soleil. However, successful zags usually test poorly with consumers before they’re launched. They fare pretty well on the “good” axis, but then attract so many negative comments on the “different” axis that their companies get nervous and reject them.
THE GOOD-DIFFERENT CHART HELPS YOU MATCH YOUR CUSTOMERS’ REACTIONS TO SUCCESS PATTERNS, RATHER THAN TAKING THEIR COMMENTS AT FACE VALUE.
Not surprisingly, where companies find the most encouragement is in the upper-left corner. Offerings here test extremely well, and the “good” comments are rarely undermined by negative comments such as “weird,” “ugly,” “offbeat,” or “crazy.” But the reason customers don’t make negative comments about offerings in this corner is that there’s nothing new or different to dislike. So while offerings in the upper-left may test extremely well, there’s little chance that they’ll lead to radical differentiation.
Offerings in the lower left corner, where “not good” meets “not different,” test fairly well with customers, since there’s not much to dislike or misunderstand about them. While this can encourage companies to proceed, in the end these offerings fail because there’s either too little demand or too much competition.
Offerings in the lower right corner usually don’t get off the ground at all. They’re perceived from the start to be dogs—and guess what?—they are.
What makes the good-different chart tricky, though, is that some of the potential winners in the upper right corner look a lot like the dogs in the bottom right corner. The line is often blurry, and the consequences for making a bad call can be extreme. It takes an experienced innovator to know the difference—someone who can match customer comments to a previous pattern of success.
When BMW decided to launch the Mini Cooper, piles of research showed that Americans had no interest in an ultrasmall car and only wanted more SUVs. Despite this “fact,” the zagmeisters at BMW stepped on the gas instead of the brakes and motored straight into profitable new market space.
The intrepid folks at BMW had a lot in common with physicist Niels Bohr. Many years ago one of his colleagues was invited to deliver a controversial paper to a group of scientists, including Bohr. Immediately afterward his colleague asked Bohr how the paper was received by the other scientists. He replied, “We all agree that your idea is crazy. What divides us is whether it is crazy enough.”The Mini people were crazy, too. Like a fox.