Leading players in CPG are turning to Living Services as a way to engage with key customers and win their loyalty. Our first post on this topic explored how these intuitive, agile solutions delight consumers by giving them greater control over their day-to-day needs – from better UV protection to the optimum morning workout.
Today, more and more senior executives see Living Services as forming a vital part of their future business. And they see their marketing teams playing a critical role in making that happen.
But the pressure is on. Designing profitable solutions that deliver a new level of consumer value is hard work. As well as market and data insight, marketers need imagination, empathy and the flexibility to move faster than the competition. Most important of all, they need to understand their consumers better than consumers understand themselves.
So how should CPG marketers make progress in this exciting, evolving world? How can they ensure they are approaching Living Services in the right way? The following steps outline a guide to getting started.
The art of the possible
Living Services offer a raft of new opportunities, but there is a limit to what is possible. A sportswear brand could launch countless services relating to its apparel – from dynamic health monitors to tailor-made training – but these services would suit some products better than others. Marketers need to first identify the product that offers the most potential for return. In this example, our sportswear brand could see a service linked to a mid-range cross-training shoe as having greater potential than one aimed at a niche sports group.
When is a product ready for service design?
One way to think about service design, is to consider those products with deep lifestyle needs that can drive deeper vertical product integration and expansion within your product portfolio. Skincare and cosmetics are some that come to mind, where lifestyle needs can change based on seasonality, day parting or activity levels.
Of course, service design is not just for products; this can also be applied to business, field force enablement or HR as examples.
Archetypes that count
Take a sportswear manufacturer; after deciding on the cross-training shoe, the brand needs to explore its top consumer archetypes for that product. The shoe may have several archetypes, from an office executive fitting exercise around work commitments, to a health-conscious baby boomer. These archetypes will have different needs in their lives relating to lifestyle, health and disposable income and would therefore be attracted to different living services. Marketers should narrow in on the archetype that is most likely to engage with the service and bring in the most value.
Creating a new Living Service means going beyond focus groups and customer surveys. As with standard quantitative measures, market research historically has been great at telling us the “when” and “what” of consumer behavior. Using ethnographic research methods, we really focus more on answering the “why” consumers behave and do what they do. It means analyzing consumer behavior to a level of minutiae that outstrips standard market segmentation. In effect, marketers have to give voice to the unmet needs that consumers themselves may not have recognized. The key is ethnography. As anthropologists study cultures by observing them first-hand, marketers should adopt similar techniques to pinpoint common frustrations, “rituals” and habits to identify where their Living Service could add value. They should immerse themselves within their consumer group and ask “What will make their life better than it is today?” For example, perhaps the baby boomers in the sportswear manufacturer example say they are concerned about getting the right level of exercise for their age, diet and state of health. They recognize the need to be active but are not sure that they are achieving this on a daily, weekly or monthly basis.
The bridge between insight and innovation
Once the research has indicated that the training shoe’s baby boomer customers might benefit from an easier way to monitor their levels of exercise, marketers need to take this insight to help define a service that will improve the user’s life. A service that draws on data from motion sensors and a food diary to nudge the user into taking more exercise would provide some value. Even more useful would be a Living Service that factored in lifestyle changes – if the user is on vacation or recovering from a minor injury – and then amended the tone, frequency and content of the updates accordingly.
Defining a Living Service requires marketers to look beyond their traditional comfort zones – whether using ethnographic approaches or working alongside innovation teams – but the challenge does not end there, as our next article on this subject illustrates. We’ll take a closer look at one of the ways we can create a Living Service.