Like honesty and trust, relevance is a high-value social commodity…
In business, it is true to say that market share, share price and profit margin are all transient. That which is up today, could be down tomorrow and so on. The business climate is often determined by social, economic as well as cultural factors that can be volatile and therefore hard to predict and plan for. However, the one thing that every business needs, regardless of its size, is relevance.
It is important to remember that relevance is not necessarily a measure of product quality, it is more often a measure of product preference.
A few years ago, a major mobile phone manufacturer (at one time occupying a dominant place in the market) launched its next-generation device. With its market share dwindling, the manufacturer placed great stock in the new product being able to revive the company’s fortunes. The pre-launch, fuelled by media and consumer anticipation, was accompanied by great fanfare and expectation. However, to cut a long story short, the product bombed. Curiously, it didn’t bomb because it wasn’t a good product; on the contrary, the reviews were quite positive. So why did it fail then? In one word: ‘relevance’. A product that once captured the imagination as the must-have accessory, had become yesterday’s news; outwitted and out-maneuvered by agile and fleet-of-foot competitors.
Again, like honesty and trust, relevance is a high-value social commodity…
More than anything else, the value that suppliers of products and services crave is relevance. The reason for this is because relevance is currency, it ensures profitability and it guarantees longevity. It is often said that innovation, change, and transformation are the keys to sustainable success; but by themselves, they count for nothing unless a business understands its operational context, business climate and the triggers that determine relevance.
Relevance is a complex subject, sometimes individualised, sometimes social and often triggered by a wide range of influences.
So what is relevance and how can it be used to lever the intended benefits? In summary, relevance is: ‘what matters’. It is multi-dimensional, with personal, social, cultural and economic facets. Take a can of soft drink, for example, the enjoyment of that beverage does not require a social interaction or engagement to give satisfaction to a consumer. To the extent that a person likes the beverage, the point of relevance is specific to that individual and no-one else. Contrast that with an instant messaging app, which is designed purely for the purpose of social interaction. The fact that a consumer prefers to use app X is irrelevant if all of those with whom the consumer wishes to interact, are all using app Y. In this instance, consumer relevance is determined not by personal preference, but by social trends. Likewise, the cultural dimension of relevance can be seen in the way celebrities endorse particular products and services in an effort to convey ‘cultural relevance’. This kind of imaging can often be seen in the sportswear industry, where a product can acquire a certain cache, not because it’s demonstrably better, but because it’s deemed to be ‘cool’. Similarly, with economic relevance, enhancing the convenience features of high-end luxury motor vehicles may well be relevant to those within a particular income stratum, but is unlikely to be relevant to those who are not.
In searching for relevance, it is wise to consider that you will always be aiming at a moving target.
From a business perspective, it could be argued that personalisation is a far more sustainable way to approach consumer relevance. This is because it is easier to personalise certain products and services to certain demographics such as senior citizens, young people, parents with children etc. In this context, determining that which would be relevant to certain individuals is fairly straightforward. However, developing a fail-safe methodology to trigger the herding instinct that drives mass-market social trends, is an art that is yet to be mastered. That is because, with social behaviour, so many other factors come into play.
Take the movie business, for example, box office grosses are predicated on the assumption that good pre-release reviews and positive word of mouth can trigger a strong social response and drive up ticket sales. It is also assumed that those who see a movie once, will go again and bring others with them next time. Here, the trigger for that which is socially relevant could be determined by one person’s positive experience and the presumption that others (especially those from the same demographic) would be just as likely to have the same positive experience. On the face of it, an almost entirely random and volatile business model is actually based on the careful cultivation of consumer behaviour and observation of market trends. If that were not the case, we wouldn’t have a movie industry.
With relevance, it is essential that we understand the context, grasp the moment and make the most of the opportunity.
Then there is the relevance that derives from choice, convenience, and perception. Using the instant messaging app analogy again, I am sure that some of those reading this blog will remember the old Microsoft Network instant messaging app. At the time of its introduction, it was very popular and then almost as suddenly, users migrated away to a well-known competitor product, utilizing a mobile platform. Then almost as quickly, that product was also consigned to history in favour of several other free to download instant messaging apps that are now essentially the market leaders. Here, it is possible to imagine how greater choice, convenience, and perception could have played a role in the transience of consumer behaviour. The potency of these elements is demonstrated not just by their ability to frame relevance in terms of ‘the old versus the new’, but also by making a compelling case to act predicated on the assumption that: ‘if others are using what I don’t have, then it must be better than what I haven’t got’.
The psychology of relevance is the ability to stay current by thinking ahead.
So what about the psychology of relevance? That is to say, the way in which suppliers of products and services appear to anticipate what you need before you dump their product for a relevant alternative. As a case in point, at one time back in the 1980’s, a well-known cola manufacturer re-launched their product as a sweeter version. This was, apparently, intended to out-do their main competitor, whose cola brand was gaining popularity. Fast forward forty-years and, in an effort to remain relevant in a climate where the consumption of sugar is no longer desirable, cola manufacturers are pushing low or no sugar options. By so doing, they are seeking to create a psychology of relevance to both existing and new customers that might otherwise have abandoned their product for genuinely healthier options.
The seven takeaways…
So in conclusion, here are seven takeaways from this article; first, it is ultimately the consumer, not the supplier who determines what is and is not relevant. Yes, suppliers can stimulate consumer appetite and appetite can drive demand, but never forget that demand is a consumer led response.
Second, relevance is organic. Social relevance, in particular, has a powerful multiplier effect. To that extent, don’t just look to develop products, look to develop interactions and relationships with consumers. Aside from creating channels to test product relevance, it will also help you to influence social buzz.
Third, you need to know whether relevance can be better demonstrated by depth (ie: providing a specialised ’boutique’ service or product to discerning consumers) or breadth (ie: providing products and services for wide distribution and mass-market appeal).
Fourth, give serious thought to how long you expect to be relevant for and build that into your strategic plan and financial forecasting. If you are operating within a highly fluid and dynamic market, you may only be relevant for a limited period of time and therefore have a relatively narrow profitability window. Be clear about just how long that window will remain open and what you might reasonably expect to achieve during that time.
Fifth, understand that in a competitive market relevance is elastic. As such, you may only ever be as relevant as the time it takes for a major competitor to undercut you on price and drive traffic in their direction and not yours. To that end, you may need to build some flexibility into your ‘bottom line’ if you expect to remain economically relevant.
Sixth, find out who else is relevant and why and piggy-back off their success by developing ancillary or spin-off products or by becoming part of their supply chain. In other words, instead of trying to reinvent the wheel, think of ways in which you could make it go faster.
Finally, it goes without saying that you must never become complacent about your place in the market. The moment you become complacent you won’t need to worry about relevance anymore. Why? Because by then you would already have become irrelevant.
Photo by JD Hancock