You got an assignment to launch a new credit card for your bank. How do you make consumers pick your offer out of hundreds and hundreds of look-alikes? The marketing department suggested conducting a survey of a targeted group of consumers. What should customers read in a credit card offer to convince them to apply? Well, what if we just ask them what kind of APR, rewards, annual fees, appearance, name, and so on they’d like?
Sounds like a very prudent way to obtain consumer insights to innovate - isn't a very big chunk of mainstream consumer research is still conducted this way?
Think again! As you can guess, the results of this market research exercise turn out to be quite predictable. The consumers want 0% APR, no annual or transaction fees, and, of course, a bunch of meaningful, expensive benefits that are easy for them to earn and to redeem.
Is there a better way to accomplish the assignment?
Show the customers (or let them try) several systematically designed prototypes, and they will tell what they like, what they do not, and what does not make any difference to them. The experimental design used for the prototypes creation will “magically” return to you what each individual feature (option or ingredient) “brings” to the party.
Now you have a clear way to create rules for winning offerings or new best-selling products by combining those features into the best possible combinations - even if no consumer ever tested these specific combinations.
Why RDE?
When a few years ago Hewlett-Packard faced a sustained erosion of its position in the market, despite the fact that its products were comparable or even superior to what its rivals offered, management decided to rethink the marketing strategy and build a decision-making structure based on evidence. In a sense, RDE helped turn around Hewlett-Packard.
When the goal was to create a better pasta sauce (as with Campbell Soup with its Prego), a good RDE strategy systematically explored the ingredient factors that made pasta sauce better, and soon afterward created a significantly better sauce.
When the very difficult goal was to create messaging for a better Playtex tampon so women would feel safe and discreet, that, too, was grist for RDE, which optimized the messages every bit as easily as it handled, say, the messaging for computers, credit cards, or cars.
When the goal was to create better package designs that jumped off the shelf for Swanson frozen dinners, RDE was beginning to be accepted in that world of design and did its job, again with clear increase in sales.
Of course, no one would ever claim that experimentation could replace artistry in design, in communication, or even in the technicalities of product creation. It was just that RDE systematized the process of discovery and development.
What about sustained innovation, political and social areas, and the stock market? RDE found its home there as well.
Sounds good, but shouldn’t one have a triple Ph.D. in statistics, psychology, and social studies to use RDE? And be versed in long formulas with Greek letters? Perhaps, in the early days, but not recently. Now the answer is “Not at all.”
At one time, to drive a car, you needed to intimately know the engine, transmission, and all those complex things under the hood and below the floorboards - and you were expected to fix your car yourself. With time, more people had to drive, and the cars evolved into something easy to use (albeit, much more technologically sophisticated). This, by itself, allowed even more people to drive. How many drivers on the road now even know where the transmission is located? The same is happening to RDE. Something invented and designed by the most educated people in the industry is now ready to be used by any businessperson with the same ease that today’s personal computer can be used. More companies have used RDE on a sustained basis to survive and overpower their brutal competition. This need for RDE enticed the development of new tools that made it easier. In turn, RDE became easier to use, and often with a lot of fun. Applying Malcolm Gladwell’s metaphor, RDE is now reaching a tipping point.
