Finding Non-Consumption to Help Your Business Grow

Hosts

 

Finding Non-Consumption to Help Your Business Grow – transcript

 

Greg Engle

You’re looking at your products, the things you’re responsible for, how many more people want to do this, but can’t and what are the barriers, you then pick off barriers. Then your strategy will tell you what barriers you can pick off what barriers you can’t pick off. Some people might be able to go down market where other people can’t based on their strategy. 

 

You need to find the nonconsumption, then you figure out what your strategy, your business strategy, your metrics are, and then decide whether to go after it or not. What disruption does is, often big companies have the strategy of always growing profit or margin or something like that. They then make the decision to go up market and not go sideways or go down market a lot of times.

 

Bob Moesta

Welcome to the circuit breaker podcast where we challenge the status quo of innovation and new product development. We’ll talk about tools and skills and methodologies used to build better products and make you a better consumer. I’m Bob Moesta, the co-founder of the rewired group, I’m one of your co-hosts and we’re joined by Greg Engel, who is my co-founder and chief Bob interpreter. Join us as we trip the circuit, and give you time to reset, reorganize and recharge your brain to build better products.

Hey, welcome to the podcast. 

 

This is just a little bit of preview; Greg and I dive into the whole non consumption pool, there’s just so much stuff going on there. We take the time to really unpack what is non consumption? How does it work? We give a couple of examples wrapped around it, we dive into how we have wrestled with non-consumption in building a CRM and some marketing and how we’ve overcome it. But in the end, it’s about how does nonconsumption help people grow their businesses and being able to identify it? And how do you identify it? Through the podcast, we will get you to the assignment of trying to help you identify nonconsumption.

 

Greg Engle 

Hey Bob.

 

Bob Moesta

Hey Greg, what’s going on, man?

 

Greg Engle 

Today, we’re going to talk about non consumption. I want to start off with, in your mind I want you to define for everybody what is non consumption. 

 

Bob Moesta

The concept of nonconsumption is where people want to make progress, but they can’t. It’s this notion of pent-up demand, or the aspect of they have a struggling moment, they haven’t quite concluded either the tradeoffs they need to make or the decisions they must make. So they’re caught in this world of workarounds and things that might help them. But the reality is that struggling moment is not eliminated. They’re sitting there waiting to make progress, but they’re stuck.

 

Greg Engle 

Is every human in non-consumption? 

 

Bob Moesta

The reality is that the other ingredient that’s important to non-consumption is that there’s a desire to be better. If there’s not a desire to be better, this is inconvenient, you tolerate it. You could say they are in non-consumption, but it’s that notion of I want to do something better, or I want to be able to do something that I can’t. That tension is what causes the notion of what non consumption is.

 

Greg Engle 

I think that’s what we would always say is when you’re looking from the supply side out, a lot of people want to say anybody that’s not buying my product is in nonconsumption, that’s not true. What’s true is the people that want to do something that your product will fulfill. But for some reason they can’t, economically, time, knowledge, any of those things will get in the way of consuming.

 

Bob Moesta

It’s like access, I’d like to do it, but I don’t have access to it, or boy this is too expensive, or I don’t know how to do it. Those are the other underlying premises of what non consumption framed out to be. They want to do it but they don’t know how, or they want to do it but they can’t afford it. So is everybody in that and consumption? Yes. But at the same time, if they don’t have the energy, then they’re not actually going to figure out how to make that progress.

 

Greg Engle  

But my pool of people buy me, there are people that are not consuming and there’s nonconsumption. 

 

Bob Moesta

There’s a difference between the way that they define a market; The addressable market is people who could at any situation buy my product. But it’s not about who can buy it, it’s about when, where, and why? Not everybody is in a situation to make that progress. Even though there might be 100,000 small businesses out there that need our product, how many of them are struggling? How many people are trying to make progress and how many people are stuck. It might be down to there’s only 10,000 people struggling right now, and there’s another 25,000 people who are doing workarounds or want to make progress but can’t. It’s not that the market is 100,000 and you need to get all 100,000. If they’re happy, they’re not looking. 

 

Greg Engle

So they’re not nonconsumption, they might not be buying you but they’re buying somebody to do that

 

Bob Moesta

Bob Moesta

It’s that element of, they’re struggling, they’ve got energy to be better, and the fact is, there’s some barrier of access, knowledge, price, other things that are in the way that keep them from wanting to do that. It’s this notion of a horse like the Kentucky Derby, in the stall or in the chute ready to go and just ready to get out, just open the gate. The gate is that factor, I don’t have access, or I can’t afford it, or I got to do some other things, but there’s energy that’s waiting to be accessed.

 

Greg Engle 

And why should companies care about non consumption?

 

Bob Moesta

The thing is non consumption is where growth comes from. If you think about growth from the supply side, I could be stealing share from somebody else. But when you really look at where markets have exploded, things like photography, the non-consumption is how many people want to take a picture but didn’t have a camera with them. The camera industry went off and made better cameras, but they didn’t think about how to have better access to it or have it with them. In some cases, people were willing to trade off a great picture for anything for that moment. This is where I have this vivid image or memory of me taking picture of my kids trying to play soccer. I know I have a big camera, and I know how to take the pictures, but I don’t have it with me, and this picture is better than nothing. It was just one of those things where suddenly you realize that’s the definition of non-consumption, I want to take a good picture, but I just don’t have that ability right now.

 

Greg Engle 

As we work with people, and we talk to people about non consumption and product development, things like that, tell me the difference between innovating for nonconsumption and innovating for blue sky.

 

Bob Moesta

So, I’m not sure I understand the blue sky thing, because it’s almost like no constraints thinking. Personally, I’ve never been able to make that work. I feel like I need constraints wrapped around it, typically what happens is, when I do blue sky I end up doing what the camera companies did, which is to go up market, ‘oh, we can add this feature’, or ‘we can add that feature’ it’s more supply side driven to what we can do. Where when you’re looking at non consumption, 9 times out of 10, it’s about something being sometimes half as good, as opposed to being something twice as good. So, the thing I love about non consumption is the notion of I just got to be better than nothing. I know you hate that phrase.

 

Greg Engle 

I don’t really like that because that’s not true. It’s not better than nothing, it’s to solve my struggle when and where I want it. Sometimes that means there’s things competing with it, sometimes there’s things not competing with it. Your phone example of the picture, the competitor was the big cameras, but if you’re running from thing to thing, and you didn’t pack the camera, nonconsumption is there. It’s better than not having the memory, so let’s take a picture, it still needs to be sharp enough that you can see your kid and not the neighbor’s kid, so it’s not nothing but it’s to fill the void of that struggle. What we often tell people is when we’re doing this stuff and they talk about blue sky, and they’re looking for this new field and all these different things, is look for a struggle. Nonconsumption usually shows a struggle, if we look for the people that want to do something and can’t, will help do that. If we just do blue skies without any constraints or anything, then what usually happens is you go up market, or you stay in your supply side and say, ‘well people will do it when I show them what it is, they don’t even know they’re missing out on it’. That’s usually the sign of death.

 

Bob Moesta

I would say that is my definite definition of you’re headed down the wrong path for sure. 

 

Greg Engle

Because if you have to convince someone to do something, it’s nearly impossible.

 

Bob Moesta

I don’t believe you can convince anybody of anything, they convince themselves. That’s why we have to speak in their language, and we have to see things their way and see it through their eyes. This is where if I have to convince them that this is better, the fact is they’re not actually looking for better, they’ve convinced themselves.

 

Greg Engle

I think a lot of times we talk about non consumption; it’s trying to get people to realize that their products do a job to be done. The people have the job to be done, the product isn’t the job to be done. Often, they get in this mindset of the product is the job to be done. So, they end up trying to go blue sky, because they think they can make a product to open the market. Really, can you look at someone’s life and say they want to do these things? How do I make it accessible for them? It could be up market or down market. It could be sideways to what you’re doing today. There can be a lot of different ways to approach it. But how do you approach it to get more people in the door? At the right product, at the right time? That’s what we’re talking about designing for nonconsumption. 

 

Bob Moesta

This is where it’s not only who but who, when, where, and why. Those are the things that helped define the market. That’s where we start to think of it more as jobs as moments or situations that people have in their lives. If it’s just the count of small businesses that’s one thing, but it’s the small businesses who struggle with accounting. That’s the size of the market we’re talking about.

 

Greg Engle  

In your opinion, who is usually better at looking for nonconsumption? Big companies? Startups? Who’s usually hitting that mark?

 

Bob Moesta

This is what Clay talks about in disruption, the fact is that the established incumbent. The first thing is they have barriers, I call it the church of finance, it says ‘I can’t actually do something that’s going to be the less margin or not generate a return that’s equal to what we already do’. Most nonconsumption is about the low end of the market. If you look at true disruptors, they come in and serve the underserved or the non-consumers. It’s typically a product that is half as good, or less than half as good as what I see is the current product. Think about the first phone camera, was horrible, but over time it got better. Most people didn’t see the phone camera as a competitor to the regular cameras, but over time the camera market has dropped over 90% In less than 10 years because the phone has caught up and disrupted it completely. 

 

Greg Engle  

Why was the first camera phone disruptive or nonconsumption.

 

Bob Moesta

Because it got to a point where that picture that I could take with my phone was better than nothing.

 

Greg Engle 

I think that’s the point we’re trying to make is it needs to be one where people want it, and it needs to make sure that it’s doing something for them. You’re looking at your product, the things you’re responsible for are saying how many more people want to do this, but can’t and what are the barriers? You need to pick off barriers, then your strategy will tell you what barriers you can pick or can’t pick off. Some people might be able to go down market, or other people can’t, based on their strategy. You have to find the nonconsumption, then you have to figure out what your business strategy, what your metrics are, then decide whether to go after it or not. What disruption does is a lot of times big companies have this strategy of always growing profit or margin or something like that, that makes them make the decision to go up market and not go sideways or go down market a lot of time.

 

Bob Moesta

That’s right. Well, IBM is the perfect example of back in the 80s and 90s when they had mainframes, one of the things that they did is they tried to do the PC. Who would say that we’re building a computer for $150,000 selling custom software with it, all these other things. How many people wanted to use computers, but they couldn’t afford the 150,000. It was looked at as why would we do this? This makes no sense. Dec was the one who invented the PC and said there’s no way we’re doing this because it’s just going to cannibalize. 

 

When IBM saw this opportunity, they said this is in direct conflict with our current business market that we’re serving, but at the same time if we don’t do it somebody else is going to do it and we need to figure out. They spun off a complete division and moved it to a completely different part of the country and said you go build the PC market and eventually put the mainframe business out of business. 

 

Greg Engle

But someone in the company realized their business strategy, had to change. 

 

Bob Moesta

And that it was in conflict of their current business.

 

Greg Engle  

The way they solved it was not changing the overall strategy but spinning something off and making a division. That leads us to the next thing, I’m going to tell a story about nonconsumption from the rewired perspective. And that is, we are constantly looking for and we probably try two or three different CRM systems a year.

 

Bob Moesta

we desperately want to make that progress. But man, we just can’t.

 

Greg Engle  

Some of the things standing in our way is we have an old way that we just write on a board, and we move cards from place to place, but it’s a habit that’s ingrained in us, it’s a way you remember. So those are the habits that are forcing us away from consuming. Then we have an anxiety of, we’ll have a bunch of different people looking at this, how do we get everybody on board to do that same way, think about it the same way, which is the anxiety of the new. Those always outweigh our desires of when we’re slow, we need a CRM system, a trickle campaign, something that allows us to do this. When we get busy, we need something to help us keep track of everything, because things fall through. When things are moving along at its normal pace, why bother putting anything in? We know we’re going to get a deal. We know we have to get so many a month, it’s not a big deal. Nothing’s happening. So why change our behavior? And that’s kind of the context we’re in.

 

Bob Moesta

To be honest, we’ve been doing it for 12 years and it’s and it’s worked. We look at something new, and like you said in two cases; 1. when we get really slow, where are the leads going to come from? And who should we call and what’s going on? 2. Oh my gosh, we’ve got 20 proposals out there, and which ones are going to come? When are they going to land? How’s it going to work? And how do we get the CRM to help us understand how to execute, and so we’re always picking it at the wrong times.

 

Greg Engle 

We’ve done free trials, we’ve bought some for a year, used it for two weeks and abandoned it all these things. Some of the reasons why it doesn’t work for us are most of them are rigid in their definitions, and our definitions are different. We’re trying to fit our sales process into a rigid system that doesn’t fit, so we run into that problem. Or we get one that’s totally flexible, and we don’t know how to set it up. 

 

Bob Moesta

In that perspective, we ended up either overcomplicating it and we can’t end up making it simple enough.

 

Greg Engle 

What did rewired do to get out of nonconsumption? What do we do? 

 

Bob Moesta

We’ve been iterating on this and spinning our wheels for at least six or seven years; we’ve tried just about every little system you can imagine. The funny part is you might run one, and I might run one, and we’ll go back and forth. Eventually, what we’ve done is came back and said we need to hire somebody with our marketing and understand how to keep track of our leads, and then have a system to put those things out. Instead of trying to buy the software. First, we’re actually hiring a marketing professional to help us put this all together and understand how to design the system so then we can pick. We were trying to let the system figure out how to help us as opposed to us figure out how to help and then lay the system. 

 

Greg Engle 

So, we hired a marketer to help us top of the funnel marketing, I know it’s the dark side, people are probably flipping their cars right now. No, marketing is a thing everybody needs to do We were able to do word of mouth marketing, we’re at a point in time now where we need to do a little bit more than that. We have a long sales process, our sales processes a year to two years long for most of our new people.

 

Bob Moesta

Yes, new people, because most of our work is repeat.

 

Greg Engle 

How does hiring a marketer help us with top line? Help us with nonconsumption of sales CRM system? 

 

Bob Moesta

We kept trying to think of how we adjust our approach to fit into the CRM system that exist as opposed to make our system more explicit so we can go there. Part of this is about us taking that time to think about the progress we’re trying to make and be explicit about it, at the same time, simplify it. At some point, we got caught up, or I got caught up in all the things it could do, as opposed to what do we really need to do?

 

Greg Engle  

What I would say we really did, this is probably passive aggressive, by hiring a marketer to help us with top line sales, we’re going to have more people coming in the funnel that we have to do something with.

 

Bob Moesta

That’s right. So we have to have a process to figure out how to filter better and screen better and make sure that we can articulate our value proposition better. I can’t tell you how many people that we’ve worked with go ‘we should have thought about having you help us with that’. So, there’s non consumption of us that happens all the time. Part of this is to build that notion of how we make people understand what the situations are they’re in where they can pull us in to help, as well as making sure that we’re a little bit more top of mind for them.

 

Greg Engle 

What we did was we created a time wall for ourselves. I bring somebody in that we’ve told explicitly that our goal was to get to some sort of a process, whether that’s CRM or not, we don’t know. But it’s going to be some kind of trickle campaign to help people remember who we are past and future type people. We’re building that and it’s helping us build that time wall to where when we have to make the decision, there’s a time there, so we’re forcing ourselves down that timeline, if you will.

 

Bob Moesta

The podcast is part of this, to build some content that we can actually use to trickle to people. Again, this in about finding right space and time (who, when, where and why). And content like this is the thing that helps us get there.

 

Greg Engle 

What we want to do is give a little homework because people seem to like that. I don’t know why people want homework, but they seem to like it. What we want people to do with this podcast is think about a time in their current life, in their personal situation, that they want to make progress, but they can’t. Then I want them to think about their force of progress and figure out what is it about the force of progress that’s not allowing them to make progress, because that’s really what it is. We talked about our anxieties and our habits that are holding us back, that’s really what’s happening. It’s not the push and pulls are too small.

 

We need someone to help us alleviate those not actually put more pushes and pulls in front of us was what marketing normally does for people as they just give more pushes and poles, not helping with the habits and anxieties. So we went hired someone to help us with that. The homework is to go back and think about a time in your personal life, that you want to make progress. Figure out why you’re not making progress. Once you do that, you see how to find that nonconsumption. I want you to take something of your project you’re working on today in your professional life and see if you can find that nonconsumption as well. So that’s our podcast for today. Hope everybody enjoyed it. As always.