Can companies actually create customer demand?” or “Does customer demand already exist waiting to be fulfilled?” The reality is that people and organizations have needs around getting important jobs done. When they become dissatisfied with their ability to get a job done well, they are compelled to look for better solutions. When a company offers a product and/or service that customers perceive to be a better value than competitive solutions, then the company creates customer demand — customers want the solution. Simply put, companies create customer demand by generating superior value.
Demand Creation is a system of innovation that drives organic business growth by — 1) increasing customer demand for existing products and services and 2) creating successful new products and services that customers want.
Demand Creation comprises a system of integrated concepts, methods, tools, techniques and strategies for proactively enhancing and innovating business models, offerings and strategies in timely response to changing business realities with the aim of profitably fulfilling unsatisfied customer needs.
The late management writer Peter Drucker said that the primary purpose of a business is to create customers. The challenge for established companies today is to continually create customer demand for its offerings in a business environment that is more competitive, more dynamic, and more complex than years past. Yet the prosperity of any company absolutely depends on its ability to create customer demand. But as we have learned, creating and sustaining customer demand is not easy to do.
One reason for this is that complexity obscures what we call the opportunity stream, a metaphor we use to represent all the potential demand creation opportunities as well as potential threats for a particular company.
Your company’s resources, the customer needs that it endeavors to satisfy, and the business environment in which your company operates determines the width of the opportunity stream and how fast it moves.
As implied by the stream metaphor, these opportunities and threats are continually “flowing by” meaning that you have limited time to act on them. And they exist whether your workforce recognizes them or not.
Your company’s organic growth potential depends on how well your workforce can identify and exploit the best demand creation opportunities and effectively resolve perilous threats within your company’s opportunity stream.
The Demand Creation System consists of three complementary methodologies that work together to drive profitable growth for you company — the Entrepreneurial Insight Generator for opportunity and threat discovery, Value-Lift for maximizing the profitable revenue potential of existing products and services and AVID for creating new products and services.
The Entrepreneurial Insight Generator, or EIG for short, facilities structured ideation around the customer’s job to be done with the aim of identifying lucrative demand creation opportunities and formidable threats within your company’s opportunity stream. The EIG is more effective than unstructured ideation or “brainstorming” because the EIG produces real opportunities, not just “ideas”.
Like a radar detection grid, entrepreneurial insight distributed over a broad spectrum of the workforce will produce a stream of lucrative opportunities and some formidable threats. Management then decides what opportunities to exploit and what threats require a response.
Value Lift, or VLIFT for short, is a methodology for increasing the perceived value of your existing products and services. VLIFT begins by segmenting or grouping existing customers based on the job they are hiring your solution to do. VLIFT then identifies the important and unsatisfied needs of each of these groups for getting that job done.
These needs become targets for improving and/or extending your solution using a number of VLIFT strategies to lift the perceived value of the product or service. The aim of VLIFT is to increase profitable revenue from existing customers and to attract customers who are using competitive solutions.
Agile Value Innovation Discovery, or AVID for short, is a methodology for structuring the discovery phase or fuzzy front-end of an innovation project. Companies are well aware that new products are more likely to disappoint than to succeed, which is why many are timid about innovation.
Unlike conventional product development methodologies, AVID is fast and flexible under conditions of high uncertainty and does not require a set of fixed assumptions from the outset. The aim of AVID is to create new products and services that your target customers will prefer over competitive solutions.
Demand Creation is an orderly, repeatable, and effective way for established companies to systematically drive profitable organic growth. I sometimes use the analogy that Demand Creation is like a twin-engine plane. The navigation system is the EIG steering you towards lucrative opportunities. One engine called AVID creates new products and services that customers want. Once a new offering becomes an existing offering, the other engine called VLIFT maximizes the profitable revenue of that offering through its market lifecycle. With these components working together, your company gains altitude and sustains that altitude. Now that’s where you want to be!