If you are interested in moving your organization toward a more effective, lower cost method of developing new products and services, take a look at this terrific presentation by Kaaren Hanson, VP of Design Innovation at Intuit.
Showing posts with label experimentation. Show all posts
Showing posts with label experimentation. Show all posts
Tuesday, July 30, 2013
Monday, July 1, 2013
Starbucks: Handcrafted Sodas?
Posted on 8:05 AM by Unknown
The Wall Street Journal reports that Starbucks is testing handcrafted sodas at locations in Atlanta, Georgia, and Austin, Texas. The article states that the flavors of soda include spiced root beer and lemon ale. The sodas are created using a carbonation machine in the Starbucks stores, and a grande size drink sells for $2.95 at these locations.
What do we make of this newest product line extension for Starbucks? As the article explains, the move clearly constitutes another attempt to drive sales at off-hours, i.e. in the afternoon and evening. Moroever, it offers another way to drive same-store sales growth, a key metric for any restaurant or retailer.
The move does come with some risks. Naturally, customers must enjoy the product, or it could harm the Starbucks brand. In addition, continued menu extensions add complexity to the operations of a particular location. Can Starbucks maintain speed and customer service as the menu expands? With food items expanding as well, Starbucks must watch the issue of complexity carefully. The good news: Starbucks understands the power of experimentation. It is testing the concept in two locations, and presumably, it's gathering a great deal of data. That data include customer feedback, barista input, and information about the impact that the new products are having on the speed of service. What happens if customers love the soda, but service slows? That could be tricky. At that point, Starbucks will work to streamline operations as much as possible to increase throughput. They have done quite a bit of that type of work in the past few years. Still, I notice considerable differences in speed across locations. Part of the difference can be accounted for by the fact that some store layouts are clearly not as conducive to streamlined, efficient operations. Part of that is due to local differences in the way locations are managed.
One final point about the notion of testing and experimentation. Sometimes, companies find that such small tests go quite well, but national roll-outs then falter. Why? The tests are not truly representative of what will happen during a full-scale expansion. Senior managers supervise the tests very carefully. Extra resources are deployed. The test becomes something more than a test... it's actually a "proving ground" or "demonstration" rather than a true controlled experiment.
Friday, October 12, 2012
How Big Companies Act Like Startups
Posted on 5:21 PM by Unknown
Soren Kaplan wrote a terrific article recently for Fast Company. Kaplan explained how some large companies try to act more like startups in an effort to jumpstart innovation. He outlines four key practices/principles that invigorate innovation:
1. Follow customers home: In other words, conduct anthropological research. Go into customer homes and observe them in their natural settings using various products and services.
2. Tap outside collaborators: Bring in experts and innovators from outside the firm to bring fresh perspectives, explain their research, and educate folks about how things are done elsewhere.
3. Stay small: Don't think in terms of bet-the-company type projects. Think instead in terms of low cost, rapid experimentation.
4. Use the best, invent the rest: Creating a new product or service doesn't mean inventing the entire thing from scratch. Often, you can combine off-the-shelf components with proprietary innovations to develop a unique new product.
1. Follow customers home: In other words, conduct anthropological research. Go into customer homes and observe them in their natural settings using various products and services.
2. Tap outside collaborators: Bring in experts and innovators from outside the firm to bring fresh perspectives, explain their research, and educate folks about how things are done elsewhere.
3. Stay small: Don't think in terms of bet-the-company type projects. Think instead in terms of low cost, rapid experimentation.
4. Use the best, invent the rest: Creating a new product or service doesn't mean inventing the entire thing from scratch. Often, you can combine off-the-shelf components with proprietary innovations to develop a unique new product.
Friday, June 15, 2012
Is YouTube An Oppportunity For Terrific Advertising Experiments?
Posted on 4:50 AM by Unknown
Alex Konrad has written an article for Fortune titled, "Pepsi, Brewing up viral magic." The article describes how Pepsi debuted a new "Uncle Drew" ad for Pepsi Max on YouTube. According to the article, "In the five-minute clip, 'Uncle Drew' amuses, then mesmerizes, a pick-up basketball game and its fans with crossovers and dunks unbecoming of a white-bearded, paunch-carrying old man, and only possible because the true identity of 'Uncle Drew' was a carefully disguised young basketball star, the clip's writer-director Kyrie Irving." (Irving is the former Duke player and current NBA Rookie of the Year who plays for the Cleveland Cavaliers). What's interesting is where the ad went next... it is now appearing on television as a 30-second spot during the first few games of the NBA Finals between the Miami Heat and the Oklahoma City Thunder (go Thunder!).
That progression is somewhat unique, going from YouTube to television. I find it very interesting though, and I think more firms should emulate this strategy. This story proves that firms can and should use YouTube not just as part of a social media marketing strategy... They should think of YouTube as a land of experimentation. YouTube offers an inexpensive way to experiment with new ad strategies. The cost of failure is minimal, and even the ads that don't become viral sensations can be "useful failures" in that they may provide powerful learning opportunities.
If firms are to use YouTube as a powerful mechanism for low cost, low risk, fast experimentation, then they need to have clear methods of evaluating these experiments. Konrad's article explains that Pepsi had just such a method of evaluation:
"Pepsi Max brand team member Sam Duboff, who led creation and development of the piece, says 'Uncle Drew' had to satisfy three major metrics in order to justify its adaptation into a television segment. 'Uncle Drew' had to keep viewers engaged, hit the brand's target demographic, and generate its own legs through word of mouth. With 80% of viewers watching through the 4-minute mark, a 82.1% male viewer group that skewed towards the brand's core 25-44 age group, and over 5 million views from embedded YouTube players suggesting the viewer watched over a media site or Facebook, Duboff and his team hit all three."
That progression is somewhat unique, going from YouTube to television. I find it very interesting though, and I think more firms should emulate this strategy. This story proves that firms can and should use YouTube not just as part of a social media marketing strategy... They should think of YouTube as a land of experimentation. YouTube offers an inexpensive way to experiment with new ad strategies. The cost of failure is minimal, and even the ads that don't become viral sensations can be "useful failures" in that they may provide powerful learning opportunities.
If firms are to use YouTube as a powerful mechanism for low cost, low risk, fast experimentation, then they need to have clear methods of evaluating these experiments. Konrad's article explains that Pepsi had just such a method of evaluation:
"Pepsi Max brand team member Sam Duboff, who led creation and development of the piece, says 'Uncle Drew' had to satisfy three major metrics in order to justify its adaptation into a television segment. 'Uncle Drew' had to keep viewers engaged, hit the brand's target demographic, and generate its own legs through word of mouth. With 80% of viewers watching through the 4-minute mark, a 82.1% male viewer group that skewed towards the brand's core 25-44 age group, and over 5 million views from embedded YouTube players suggesting the viewer watched over a media site or Facebook, Duboff and his team hit all three."
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