Episode Transcript
[00:00:00] Hello and welcome to the 6th episode of the Bullshit. Today we will talk about an unconventional way to grow your business. It is not an intuitive concept, which is why it sounds crazy, but ironically it is just as effective as crazy always is. Our topic is, and as you would already know from the title, how to grow your business by educating the customers of your customers in. This topic is much larger than you would think.
[00:00:27] Here is your reminder that the Bolshevik is a place where we talk about marketing, business and life. This podcast is for critical thinkers, savvy entrepreneurs and curious minds of all walks of life. Here we worship no gods nor celebrities. We learn, we laugh, and we think independently. Lets dive into our topic for today and lets start with the butterfly effect in business I am sure you already know what the butterfly effect is. It is the concept that a single flap of a butterflys wings in one part of the world could hypothetically cause a typhoon far, far away from it. The studies that deal with this are all truly fascinating. I am sure this doesnt surprise you. As you would know, there is causality in everything in life. One thing happens and it usually brings on a series of events. You have had a bad night sleep. One night you wake up cranky, you pull a fire with a colleague, the next day it escalates and before you know it you are out of a job or you have a good night's sleep. You wake up rested and full of creative energy. You do one thing great and next thing you know you are being praised for it and shortly after you get promoted.
[00:01:43] As you would know, the choices we make every day define our destiny. Just like the grains of sand will form a beach.
[00:01:52] The most obvious case of causality in business is the concept of supply and demand.
[00:01:58] When there is demand, aka when the consumers are searching for something, supply magically increases and more and more companies offer the product or service.
[00:02:09] But you know this, and you don't need me to tell you yet what happens when there is no demand.
[00:02:16] Im sure you also know that right now there seems to be more supply than demands of just about anything. There are billions of products out there for things most of us have never imagined needing.
[00:02:30] Some of those products exist because they solve a problem, others just because someone was able to make them. Today we will focus on the first ones, products or services that solve an issue that most of the times we don't even realize we have.
[00:02:47] This is where the true challenge lies for most businesses and I will start with a story from someone whom I once had the pleasure and honor of mentoring employed by a large pharma company. Lacey, let's just give her that name, was tasked with the promotion of a medical product with immense benefits for everyone who undergoes surgery. The product was anti adhesion. It is a medical product which is used just before you get stitched during surgery and it is applied to ensure that the internal tissue doesnt heal by getting stuck where it shouldnt. Incredible, right? According to Lacey, most patients who undergo surgery end up having adhesion issues later on in life, and some of them even require an additional surgery because of it. If you know enough people who have had surgery, at least one of them can share that they feel a sensation of pulling in the area of the scar. This is how adhesion feels, even when it's not threatening.
[00:03:54] When I first learned about the product, I thought that surgeons would be all over it. After all, this meant that their patients long term health was going to be hundreds time beta on average. Boy, was I wrong. As it turns out, surgeons didn't care much. And even when they did, the cost of the product would eventually end up increasing the spend of the hospital and it would decrease profit. So guess what? Adoption of the product was slow.
[00:04:27] Clinics simply wouldn't splurge for it.
[00:04:31] Now, to top this, the NHS doctors who got presented with the product and trained how to use it didnt believe it was needed. My patients dont suffer from adhesions, they would say. But was it true?
[00:04:46] Well, it turns out that most NHS surgeons who would operate on a patient often never saw this patient ever again, simply because this is how the NHS works. And even when presented with the statistical data about the number of additional surgeries that are needed because of adhesions, they still wouldn't believe their view was limited because the system was designed for that. And just as many other professionals, they chose to not question themselves so they could see no further that they wanted to see.
[00:05:23] The problem that this pharma company experienced is the issue that most businesses face. The decision makers who will buy or ignore their product often choose to bypass it. Yes, even when it's for the better. And as you can see here, even when it comes to human health, if this is the situation in healthcare, then what is the chance that a construction company will invest in a new concrete just because it is better for human health and potentially for the environment?
[00:05:55] And what is the chance that a beautician will choose a more expensive face mask just because it's organic and chemicals free?
[00:06:03] What is the chance that a paint maker will choose more expensive supplies just because it makes their products less toxic? Or even not toxic at all.
[00:06:13] You can argue that the root of the problem is capitalism, and you would probably be right to an extent.
[00:06:20] In the example of the pharma company, the hospitals would ignore the product because of the additional cost. Okay, capitalism issue. Surgeons, however, would ignore it either because of an ego problem or due to pure unfiltered stupidity.
[00:06:36] So even if capitalism is to blame, well, we can't solve it on this podcast. We can, however, try to counteract the system design by bypassing the decision maker and placing them in a position where they have no choice. This is also what you can do if the final beneficiary of your product is not your customer, but their customer.
[00:07:00] This would be valid for software systems used for schools where the final beneficiary are the parents any type of certification where the final benefit might be the person that you train, any food ingredients where the final beneficiary is the customer of the restaurant and not the restaurant. Any cosmetic procedures which are delivered by beauticians, but the final beneficiary is the end user and not the beautician. And many, many other instances the most obvious example from recent years of one such behavior. One company that took this approach is invisalign. When the brand appeared on the markets, it had two promotional campaigns running simultaneously. One targeted orthodontists in dental clinics, providing them with significant financial incentives to use the product.
[00:07:49] The other campaign targeted the end user, addressing an obvious pain many people had, which was the lack of aesthetic appearance of traditional braces.
[00:07:59] If you're already intrigued, let's see how this works. Should you educate your customers? Let's try and answer this question.
[00:08:07] As with the pharma company, most businesses opt to educate their direct customers, aka the people who would pay them money. If invisalign went with that approach, they should have only educated dental professionals and orthodontists.
[00:08:25] These companies, not invisalign, obviously, but other companies see the benefits of their products or service and immediately think that there is no way anyone would ignore them from their potential audience. Why would they? Life can obviously be so much better with their product, right? But there is an issue.
[00:08:42] Today, every business's first goal is to make profits. If, and I'm serious about the if there are some businesses out there that have a different goal, they're only around as the exception which we need to confirm the rule. And if you would like to change my mind, please do it, I beg of you. But let us not digress. So if every company out there is serving the almighty God of the currency sign, then whats the only thing that will grab their attention? You guessed it, something that makes them more money. You can educate them all you want about the benefits of a product and some of them might even buy into a few of those benefits. But beyond that youre lost.
[00:09:24] What is the conclusion then that if you will be educating your direct customers, you can only truly do it when you step on a financial incentive? What I mean is simple. Show them the return of investment, of using your product or using your service and they will love you forever.
[00:09:43] If we recall the example of invisalign, that is exactly what they did. It wasn't anything superb of a system, but it worked. So here's how invisalign did it. Every orthodontist who sold invisalign got commission. The more they used the braces and effectively the more they sold, the higher their commission got. The only thing that invisalign needed to top this up with was just regular seminars and events during which exceptionally successful users of the braces would be demonstrated to other orthodontists so they can find out what can be done. And the key thing was, at the end of each of those sessions, all participants would be given a training certificate which basically pumped up their certification status even higher. So it made them look more professional in their own eyes. Really, I made it sound quite easy. But before you think that any business can implement this in a second, let me explain a few key aspects of their offering. Firstly, Invisalign had a flawless account system. Each orthodontist had 24/7 access to use their own account, to their own profile where they could record all of their cases, all of their patients. They could monitor the progress between commissioned bond commission bans. They could book their participation at various events. And even more, it was a truly well made system that left dentists and orthodontists asking for nothing further.
[00:11:13] Secondly, they had designed and implemented treatment software that was literally made for dummies. Orthodontic professionals would do a scan of any patient's teeth. They would use a specific device, then they would upload the scan to that system. The system would then design the treatments based on some predefined criteria. And then the only thing that the orthodontist was left doing was just monitoring the expected progress in the system, aligning it to what is actually happening. So basically to the actual progress that the patient is making.
[00:11:49] And finally, the third thing, they had minimized the room for error. The invisalign company had employed in house orthodontists who worked with their software system, the one that designed the treatment, to design it alongside the doctor who is implementing it. So you can imagine a team of orthodontists somewhere in the US and let's say an orthodontist in the UK, in some clinic in London on, let's say on Harley street, designing an orthodontic treatment, then the clinician here in the UK will implement it. And it was truly difficult to get anything wrong because you have a team of orthodontists on the other side of the world that is monitoring the progress and then you're only implementing it really it was foolproof.
[00:12:37] All in all, invisalign had prepared really well before they began their campaigns. Surely not every business has the financial means to follow in their footsteps, and that is understandable. But then if you dont have the big shoes, dont expect to make the big steps. Okay? So whilst this was a fabulous system, now imagine if invisalign had counted on orthodontists or dentists to do the selling. Now you'd think that they would have done it because they were financially incentivized and because of the commission.
[00:13:12] Not so much.
[00:13:14] What you forget, if you think so, is that they are medical professionals, they're not salespeople. They also have decades of experience with other brace systems and most importantly, they have predictable results with those other braces. Whilst invisalign was new and it was uncertain, and whilst you do have the innovators in any industry that would just jump on anything new, most people tend to avoid innovation until they simply don't have a choice.
[00:13:46] What I mean is that if invisalign had not started advertising its braces to the end user or to the average Joe by then, therefore creating demands, they would have needed triple or quadruple the time that they need to establish themselves.
[00:14:02] They advertised to the people, people wanted the clear braces. Orthodontists saw that there was no way around it, so they learned how to treat with invisalign. Painfully simple. Yet only a fraction of the businesses out there would consider this approach.
[00:14:18] But how do you go about educating the customer of your customer? If you have been paying attention so far, you would have noticed that in our example with invisalign, those who were truly educated, and I am referring to actual medical education, were the dental professionals. And it makes sense. After all, they are the only ones who carry any legal responsibility. The end client, although equally responsible for the success of the treatment, if not more, has just one requirement, and it may have a few angles. The only thing that they want is the Hollywood smile. Those beautiful white teeth that look fabulous enough photo and can blind you at night.
[00:15:01] Now every customer is going to have a specific angle. For some of them, comfort is going to be the most important thing. So the ability to remove the braces when they eat so they don't have to get spinach stuck around the bracket.
[00:15:14] For other people it would be the cost. Invisalign was significantly cheaper for some of the treatments than other braces, and for a third line of patients it would be the duration of treatment. Now it was a common misconception that invisalign took less time to do the same work, but that is a whole different story.
[00:15:34] So what did invisalign do?
[00:15:37] They simply created a mass advertising campaign where each piece of advertising addressed one, two or all three of these elements. So either comfort, finances or time.
[00:15:49] They didn't give the public deans and outs. Instead they gave average Joe a never ending stream of perfectly posed smiles and perfect, perfect white teeth. It was everywhere. Social media, videos, tv, the tube aka the subway if you're in the US, billboards, anywhere and everywhere, we were bombarded with perfect teeth. And of course it did the trick. People became self conscious of their own teeth and their own expectations and then influencers pushed them even further and voila. Demand was there and the rest is history.
[00:16:31] Now you may be thinking that this worked with invisalign because its about personal appearance, because its kind of a beauty product, or because of some other reason. Let me prove you wrong. Lets talk about the Dysons approach.
[00:16:45] Now. Dyson is a company known internationally but it is originally a british technology company known for its innovative vacuum cleaners and other household appliances.
[00:16:55] They are the company that launched the airblade hand dryer as a solution to the inefficiencies and hygiene concerns of traditional hand dryers, rather than solely targeting businesses and facility managers who would speed their obvious audience. Dyson also started its marketing effort also targeted its marketing efforts toward end users, particularly highlighting the benefits of faster drying times and improved hygiene. Its a different story that their claims of a better hygiene were disproved later on, but thats a whole other story.
[00:17:32] Dyson's campaign included advertising in public spaces like airports, train stations and shopping centers where end users would directly interact with the product.
[00:17:43] They also provided educational materials and demonstration to businesses and facility managers showcasing the airblades innovative technology and Drumroll, cost saving potential. And just like that, by educating both end users and decision makers in facilities management about the benefits of the airblade hand dryer, Dyson created demand from both sides on the market. End users appreciated the superior performance and hygiene of the airblades and they thought that places which had airplanes in the toilet were more luxurious. So it was a state of stainless. Meanwhile, business steel and facilities saw the potential cost saving and improved user experience as compelling reasons to adopt the airblade in their restrooms. And you think this is the only example? No, no, hold on, I've got more.
[00:18:36] So it happened in software too. And Salesforce did it. Before we begin, you have to remember, before we talk about Salesforce, you have to remember that when CRM, or customer relationship management software first launched, when it first started turning up in the markets, it didn't feel, businesses didn't feel about it the way that they do today. Some 1012 years ago, everyone in the workforce was absolutely comfortable with having in storing client details on spreadsheets. And some smaller companies didn't even bother with that they would use. And in paper, CRM was certainly not seen as the essential piece of software that it is today. And most commonly, office personnel didn't choose to use the CRM. They were practically forced on them by IT departments or ambitious innovative business leaders.
[00:19:32] And this is when Salesforce started changing the game. Instead of selling the product to the decision maker, which was usually an IT department lead or business leader, they started advertising their products to the end user, which was everyone in sales at the time and mostly admin.
[00:19:51] Naturally, it all came packed with a well executed system that was intuitive and easy to use. And Salesforce focused exactly on that. So bear in mind that if you are going to have this approach, you better have a system which is intuitive, easy to use, or at least has something innovative attached to it. Okay, so Salesforce showed Wendy and Barbara how much easier their life could be if they had this piece of software and they ended up creating demands from the bottom up. It teams no longer needed to twist your arms. So you would take their suggestion. Salesforce. Yeah, Wendy and Barbara would say bring it in. The company offered free trials and demos of the software directly to sales representatives, completely bypassing the decision makers, demonstrating how it made life easier for the average sales rep. They emphasized benefits like ease of use, mobility, real time updates that resonated with the salespeople.
[00:20:51] And finally, when it comes to decision makers, Salesforce focused on what businesses really care about return on investment.
[00:20:59] Remember when we mentioned it earlier on, often your decision maker, it doesn't care whether you sell software, chopped wood, consultancy, cupcakes or whatever. So long as it brings in more cash.
[00:21:15] By targeting the actual users and demonstrating the value of their product directly to them, Salesforce created demands that eventually influenced the purchasing decisions of the business.
[00:21:26] This approach allowed them to rapidly grow their market base and establish themselves as the leader in the CRM market.
[00:21:33] So much like invisalign, Salesforce successfully educated the customers of their customers by directly appealing to the end user in providing incentives and benefits that ultimately drove adoption and market growth.
[00:21:48] But it also worked with a thermostat.
[00:21:50] Let me give you another example from across the pond, aka the United States of America. I'm referring to the nest learning thermostat when Nestlabs introduced their smart thermostat back in 2011, they didnt rely on traditional channels to reach h vac professionals or home builders.
[00:22:10] Instead, they targeted end users directly with a compelling value proposition, a thermostat that learns your preferences and it adjusts the temperature accordingly to save you energy and to increase your comfort. Nest launched a marketing campaign that emphasized the benefits of their products to homeowners, highlighting features like energy saving convenience, the ability to control the thermostat remotely via smartphone, their website and social media channels focused solely on explaining how the thermostat works and why it is superior to traditional thermostats.
[00:22:45] If you don't realize what they did there, let me tell you, they broke the quote unquote unknown barrier.
[00:22:53] They made the end user familiar with the product, so builders and heating professionals didn't have to do the educating. They could only focus on providing the installation. What I mean is that they made a technical product familiar to the end users, removing the usual fear that comes together with just anything that's new and slightly different to what people are used with.
[00:23:17] By targeting the end users directly, Nest generated demand for their product from the bottom up. Homeowners became aware of the benefits of a smart thermostat and they started asking heating professionals and home builders about Nest specifically. This created pull through demands. This is what it's called, prompting professionals to recommend and install nest thermostats for their clients.
[00:23:42] Naturally, Nest also offered incentives to heating professionals, builders, etcetera, such as training programs, certification. This seems to be an overarching thing to encourage them to recommend and install nest products by making them feel that they are valued certified professionals, the fast and widespread adoption and success in the market, and finally toys.
[00:24:08] I was initially going to start this episode with toy advertising because I thought that's the most obvious example, but I figured I would make it somehow. More grown up talk before we come to this. Nevertheless, let me ask you, have you ever seen a doll Lego? And I'm talking about the children Lego set and Lego sets. I know that they're Lego sets for adults, but ignore these in your mind for the moment, or any other toy advertising which is done for adults, explaining to them how happily, how happy they will make their children if they bought that toy.
[00:24:43] No, you haven't. Or if you have, there's only been a couple.
[00:24:48] You're unlikely to see many of those. Because if that was the path, if that was the advertising path that toy companies would take, all toy advertising would look and sound identical. Make your child happy, entertain them for hours, educate them, yada yada.
[00:25:07] Now, I hope if nothing else brought my point home, then this example must have.
[00:25:13] So now it's your turn. If your business is in any way, shape or form similar to these businesses, and the people who truly take advantage of your product are the people who pay. Are not the people who pay the money? Sorry? Are not the people who pay the money. What are you waiting for? Why would you not be advertising to your end users?
[00:25:34] Why would you not be advertising to your end users instead of your direct customers?
[00:25:41] You know what's the beauty of the advertising campaign for end users, right?
[00:25:47] They don't have to be too complicated. You don't even need to be exceptionally creative. All you need to be is consistent and present on the right channels.
[00:25:59] If you look at invisalign, orthodontic and dental professionals wouldn't expect to consume medical content on social media, billboards, tv advertising, etcetera. But their customers would. Facility managers and companies are unlikely. Company leaders, I mean, are unlikely to be just easily found walking around train stations so they can stumble upon a demo of the airplane dryer. But the general public is there.
[00:26:26] Heating professionals, h VAC professionals and builders are not likely to be on Facebook looking for new type of thermostat, but their clients will be. Parents are unlikely to be watching tv shows and tv ads for kids, but their children are.
[00:26:42] In all these examples, some of the direct customers will also view the content, so some parents will be watching the children tv.
[00:26:53] Occasionally, orthodontists will see new braces on social media, which is absolutely great.
[00:26:59] You want this because when they see something which is directed at their customers, not at them, you're selling something to their customers, not to them. They're far more likely to be interested. Why? Because if there is, if there's going to be demands, they can clearly expand their business, they can make more profits, they can make their kids happy, whatever.
[00:27:22] This way you bypass the simple internal resistance that all of us experience when someone is trying to sell us something. Because you're not selling to them, even though, ironically, you rely on them quite a lot. You're selling to their customer. So they're intrigued.
[00:27:38] So, are you ready now?
[00:27:40] If yes, then look at the customers of your customers. Look at your end user. Pinpoint the few. And I would suggest that you keep it up to three most prominent pains that they have and simply craft your advertising campaign. Again, you don't need the most innovative, out of the box advertising.
[00:28:03] All you need is a clear message, easy to understand solution to their problems, and a call for action. Simple enough for them to follow through. All I'm saying here is dumb it down, you know, kiss. Keep it simple, stupid.
[00:28:21] So let me talk to you just for a second. For the call to action.
[00:28:26] Using our examples, find an invisalign provider near you, available in your local toy store.
[00:28:35] Book a salesforce demo.
[00:28:39] Talk to your heating provider about nestsmurthy thermostat.
[00:28:44] Easy, right?
[00:28:46] Good luck. My name is Nina Alexander and recording this for you was a pleasure. Remember, the world is full of mysteries and so is your potential. Keep exploring, stay curious, and as always, thank you for the bullish fighting. Mark. One more topic with me.
