Unless you receive an offering as a gift and try it out, ignorance will keep you from using a superior choice. When such ignorance is widespread, the market will not develop to its full potential.
Let's explore back surgery as an example. Until a few decades ago, patients who underwent back surgery were as likely to be worse off after the surgery as they were to enjoy any improvement. Harmful outcomes included increased pain, reduced mobility, and serious infections.
Gradually, some of the best orthopedic surgeons began to specialize in back surgery, and major improvements were made in diagnostic, operating, and care practices. But even today, if you ask the wrong surgeon to operate on your back, you can still find your condition made worse by surgery.
Most people can find no reliable public records describing back-surgery outcomes from a patient's perspective. If you think you need back surgery, it's all but impossible to identify the best surgeon to use. As a result, most patients visit a few surgeons and pick the one with the best personality who can operate sooner than any of the others. Why? Patients have usually put off surgery for so long that their symptoms are highly aggravated, and they don't want to wait any longer to do something about their pain or disability.
Is such a method an effective way to find a surgeon? No! Pleasing personalities and surgical skills have little correlation. A surgeon who is immediately available may also be one who is in less demand, perhaps because of poor outcomes... or inexperience.
As a result, most difficult back surgeries are still performed by physicians who are far from being the best qualified for the task. The dampening effect on demand due to poor results is substantial in influencing people not to have elective surgeries done: Patients hear many people report that they didn't like the results, and such reports also discourage choosing back surgery from the most capable surgeons who might be able to help.
Assuming that those with back problems could accurately determine which surgeons could probably eliminate or ameliorate their symptoms, such better-informed patients would expand the demand for back surgeries until growth was eventually limited by the availability of capable surgeons.
What benefits come from more awareness of superior offerings?
1. Your offerings will be noticed more often by potential customers.
2. If they need or want what you offer, they will consider your offerings.
3. If you fulfill your offer in an acceptable way, they will probably keep buying (as needed) and tell others to work with you.
4. If demand is stimulated enough, you will also grow revenues faster than costs and assets, increasing your profits and cash flow as a percentage of revenues.
5. If you grasp a unique way of being remembered (such as with a brand name that sticks in the mind), you will have reduced the number of effective competitors by keeping them from gaining awareness among most customers. As an example of this point, few people can name all of the many overnight-delivery couriers in their country. Since most couriers lack broad awareness, they aren't even considered when a purchase is made.
6. Your pricing power will increase because you face less competition in serving those customers who are most likely to remember your offerings.
7. The effectiveness of mass-marketing methods will be improved. With enough of an awareness advantage, competitors' marketing will be remembered by most potential customers as having come from you.
What's the strategic lesson of expanding your market by twenty times with added awareness? Fully develop the right kind of awareness in markets you can serve... or you will be leaving the door wide open to entry by new competitors who can create awareness advantages over you. Acting on this strategic lesson often means that a multibrand strategy will work best. Compete, then, with yourself rather than with competitors. Few people ever realize the value of this strategy... and miss most of the potential growth and profits they could enjoy.
Here's an example. If the leading cola company had also developed Pepsi-Cola and Dr. Pepper instead of competitor companies having done so, the leading cola company would control over 90 percent of a much larger market, and profits would be substantially higher. Just imagine the cost advantages and efficiencies of driving all of that increased volume through one bottler network!
The following sections address questions you should consider to determine how to use awareness elasticity to profitably expand your market.
How Can Increasing Awareness Be Valuable to Customers?
In most instances, there's a specific customer benefit gained from using a preferred product or service. Such a benefit may come in the form of a better-performing offering, faster delivery or service being received, or in less cost for customers.
Company leaders may incorrectly assume that customers are as well informed about the industry and its offerings as the executives are. Because of such assumptions, marketing activities will often emphasize some misleading or obscure benefit... totally leaving out the primary reasons why most customers should select an offering. For instance, physicians who offer eye surgery to improve vision usually stress not needing to wear glasses any more. But many people who have such surgery will still need to wear reading glasses after age forty. Someone who has to wear bifocals now, however, will be able to eliminate wearing bifocals... only needing reading glasses. That's a big improvement and a large cost saving for many nearsighted people! Yet I have never seen nor heard an advertisement that specifies getting rid of bifocals as a primary benefit.
When I was considering such surgery, I used eye drops for glaucoma (excess eye pressure that unless relieved can cause blindness). The eye drops irritated and dried out my eyes, making it hard for me to wear contact lenses... and I needed to use reading glasses in addition to the contacts. The eye surgery ads also never addressed whether those with glaucoma could benefit from the surgery (which isn't obvious because the eye shape changes daily due to fluctuations in internal pressure with glaucoma). If I had known that such surgery would have let me get rid of my contacts need only reading glasses, I would have lined up for the first available time.
I used to see my ophthalmologist every four months, yet for years I forgot to ask her about whether I was a prospect for this vision-improving surgery. If benefit could have been available to me, I wasn't aware of it.
After several years of occasionally wondering about the usefulness of such surgery for me, I finally remembered to ask my physician, and she referred me to a surgeon who specialized in such operations. He examined my eyes, tested me for cataracts, and pronounced me ready for cataract surgery, something my regular physician had never mentioned. In the process, the surgeon mentioned that most nearsighted people (the reason I needed contacts) gain improved distance vision from having cataracts removed, and I might not need any vision-improving eye surgery. Glaucoma didn't come up in the discussion.
After the cataract surgery, I found that my vision stabilized at a pretty good level for distance. I only needed a little help from glasses or contacts to improve my vision for night driving. I bought a set of glasses for that purpose, and I still use reading glasses for some close work. But miracle of miracles, my glaucoma went away for four years. When I asked about that, my surgeon casually mentioned that cataract surgery usually eliminates glaucoma. As you can clearly see (which I didn't), awareness of potential eye-surgery benefits is pretty limited among many prospective patients. I'm back using drops to control glaucoma, but I appreciate the "holiday" I enjoyed for those years.
How Far Can You Go in Profitably Expanding Awareness?
There are two aspects to answering this question:
1. The amount of increased purchasing that occurs
2. The amount of cost reductions for gaining more awareness
Many companies inexpensively enlist their customers to expand awareness. For instance, some cellular telephone plans have allowed unlimited free calling among family members. A family member who joins such a calling plan will soon make other family members aware of the benefit, and more cellular-telephone use may follow. On the Internet, marketers offer affiliate commissions to those who will help lead potential customers to their Web sites. This method of creating awareness is potentially so effective that seminar guru T. Harv Eker has found it to be financially attractive to provide free three-day seminars simply to attract customers who will become affiliates and then send their friends and relatives invitations to still other free seminars where some will decide to pay for receiving other products and services.
How Can You Make the Most Attractive Potential Customers Aware First?
The 2,000 Percent Solution describes more fully how Grey Poupon mustard became well-known in the United States. Let me share just part of the story here.
Marketers at Heublein found that those who tried this mustard almost always liked it better than their usual mustard. If the person who tried Grey Poupon was college educated and had an income over $30,000 a year (in the early 1970s), she or he would almost always think the product was well worth its premium price and, due to the preferred taste, would greatly increase how much mustard he or she ate. Whenever such mustard customers became aware of the product's advantages, the profits gained from serving them were over ten times greater than for serving an average mustard customer.
How Can You Change Your Business Model to Permit Faster Awareness Expansion?
Grey Poupon's marketing staff determined that, at the time, airline travelers pretty well fit the high-profit-potential profile. The brand's business model was changed to start selling single-portion mustard packages to airlines at cost in order to provide such potential customers with an opportunity to try the product and to become aware of its advantages. As a result, Grey Poupon's sales soared.
How Can You Locate and Attract Undiscovered High-Potential Customers?
Offerings may provide benefits that have much broader appeal than marketers realize. Such untapped potential existed for Grey Poupon. As levels of education and income expanded during the 1970s in the United States, many people began to look for inexpensive lifestyle choices that made them feel as if they were living a cut above the rest. Drinking Starbucks coffee often delivers a similar type of satisfaction from consuming a small, affordable luxury. To help fulfill this increasing psychological desire, Grey Poupon ran advertisements showing people in limousines stopping one another to ask if the other limousine's passenger could spare some Grey Poupon. Soon, it became trendy to put Grey Poupon bottles on fine restaurant tables and to display the bottle at social occasions where guests served themselves with condiments. Appealing to those who wanted to make this kind of personal statement further expanded the market for Grey Poupon mustard among high-profit customers, well past those who simply craved its spicy, wine-smoothed flavor.
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