Free Prize Inside

1. Free Prize: The Key to Remarkable Products

"If you make your product, your service, your school, your church or your career worth talking about, the word will spread."

The free prize concept. A free prize is an element that transcends the utility of a product or service, adding a unique and remarkable feature worth paying extra for and talking about. It's not about the primary function, but about satisfying wants rather than needs. Examples include the "slam" and "gulpability" of Pepsi bottles, or the Bose stereo in Lincoln-Mercury cars.

Impact on marketing. In today's cluttered marketplace, traditional advertising is losing effectiveness. The product itself has become the marketing. Companies like Amazon have abandoned traditional advertising in favor of investing in product improvements, such as free shipping. This shift emphasizes the importance of creating products and services that are inherently remarkable and worth discussing.

2. The Godin Curve: Finding the Sweet Spot for Innovation

"You can't afford difficult and risky technological innovation, because the return you'll receive is unlikely to justify the investment."

Understanding the curve. The Godin Curve illustrates the relationship between investment and expected return in both media and technology. As investment increases, the expected return must be higher to break even. However, the actual revenue generated often doesn't justify large investments in either area.

The free-prize zone. The sweet spot for innovation lies in the center of the curve, where smaller investments in insight and creativity can yield significant returns. This area, dubbed the "free-prize zone," is where companies can leverage cheap innovations for substantial profit. Examples include:

• Amazon's decision to invest in free shipping instead of advertising
• The success of products like Dyson vacuum cleaners and Wi-Fi technology

3. Edgecraft: A Systematic Approach to Innovation

"Edgecraft is a methodical, measurable process that allows individuals and teams to inexorably identify the soft innovations that live on the edges of what already exists."

The edgecraft process:

1. Find an edge - a free prize that has been shown to make a product or service remarkable.
2. Go all the way to that edge - as far from the center as consumers dare you to go.

Applying edgecraft. This approach can be applied to various aspects of a product or service, such as:

• Ergonomics (e.g., Palm Pilot's user interface)
• Public usage (e.g., Evian bottled water)
• Variety (e.g., Hi Fi bar's 26,000-song jukebox)
• Time (e.g., QBNet's 10-minute haircuts)
• Packaging (e.g., juice boxes)
• Sensuality (e.g., Krispy Kreme doughnuts)

The key is to identify an edge that matters to your consumer and push it to the extreme, creating a remarkable feature that sets your product apart.

4. The Champion's Role in Driving Innovation

"No organization ever created an innovation. People innovate, not companies."

The champion's importance. A champion is someone who takes a soft innovation and works the process until it reaches the marketplace. They are crucial in overcoming organizational resistance and turning ideas into reality. Without a champion, even the best ideas can fail to materialize.

Key characteristics of champions:

• Ability to sell ideas internally
• Persistence in overcoming obstacles
• Skill in building support across different departments
• Willingness to take responsibility for the project's success

Building champion credibility. To be seen as a capable champion:

• Start with small projects and build a track record
• Volunteer to lead initiatives, even if they're not your own
• Develop a reputation for execution and follow-through
• Continuously improve your skills in project management and persuasion

5. Building the Fulcrum of Innovation

"If the answer to any of these questions is a resounding no, it's unlikely your project will happen."

The three pillars of the fulcrum:

1. Is it going to be successful?
2. Is it worth doing?
3. Is this person able to champion the project?

Addressing each pillar:

• Success: Present your idea with confidence and use skeumorphs to make new ideas seem safer and more traditional.
• Worth: Understand what each stakeholder values and frame the project's benefits accordingly.
• Champion ability: Demonstrate your capability through past successes and a clear vision for implementation.

Strategic approach. Depending on your position and the organization's structure, choose between:

• Top-down approach: Best for those with established reputations and high-level support
• Bottom-up approach: Build momentum through peer support and prototypes before seeking higher approval

6. Selling Your Idea: Strategies for Success

"Calling a big meeting is almost never a good idea."

Effective tactics:

• Ask questions: Use your curiosity to gather information and insights.
• Sell individuals, not the organization: Focus on one-on-one conversations rather than large meetings.
• Build prototypes: Make your idea tangible and easier to understand.
• Create a feedback cycle: Get commitments and approvals in writing.
• Paint a portrait of the future: Help stakeholders visualize the potential impact.

Overcoming objections:

• Ask obligating questions to uncover real concerns
• Get objectors involved in improving the idea
• Acknowledge and address the status quo
• Take responsibility for making it happen

Communication tools:

• Develop a unique vocabulary for your project
• Use visuals effectively (avoid text-heavy PowerPoint slides)
• Tell stories that illustrate the benefits and potential of your idea

7. Overcoming Resistance to Change

"The harder you try to play it safe, the more likely you are to fail."

Understanding resistance. Organizations often resist change due to:

• Comfort with the status quo
• Fear of the unknown
• Perceived threat to job security or established processes

Strategies for overcoming resistance:

1. Highlight the dangers of inaction
2. Frame the change as an opportunity rather than a threat
3. Involve key stakeholders in the innovation process
4. Demonstrate early wins and quick successes
5. Provide clear communication and support throughout the change process

The champion's role. As a champion, your job is to:

• Anticipate and address concerns proactively
• Build coalitions of support across the organization
• Persistently advocate for the innovation while remaining flexible in implementation

8. The Power of Soft Innovation

"Successful edgecraft comes down to two things: Pick an edge that matters to your consumer and figure out how to get right to it."

Defining soft innovation. Soft innovations are improvements that don't require significant technological breakthroughs or massive R&D investments. They focus on design, user experience, packaging, or other aspects that can dramatically enhance a product's appeal.

Examples of successful soft innovations:

• In-N-Out Burger's simple menu and quality focus
• Krispy Kreme's sensory experience
• Apple's emphasis on design and user interface
• Netflix's elimination of late fees

Benefits of soft innovation:

• Lower investment required
• Faster implementation
• Often more impactful on consumer perception and behavior
• Harder for competitors to replicate quickly

9. Going to the Edges: Pushing Boundaries for Growth

"Little changes cost you. Big changes benefit you by changing the game."

The power of extremes. True growth comes from pushing ideas to their logical extremes, not from incremental improvements. This approach:

• Creates clear differentiation from competitors
• Generates word-of-mouth marketing
• Attracts passionate early adopters

Examples of going to the edges:

• Commerce Bank's extended hours and customer-friendly policies
• Dyson's bagless vacuum cleaner with visible dirt collection
• Amoeba Music's vast selection of 300,000 CDs
• QBNet's focus on ultra-fast haircuts

Identifying edges. Look for aspects of your product or service that can be:

• Maximized or minimized
• Made visible or invisible
• Simplified or complicated
• Transformed through unexpected partnerships or applications

10. Marketing is Dead, Long Live Marketing

"Marketing is no longer a separate division. It's the whole company."

The new marketing paradigm. Traditional marketing through advertising and interruption is losing effectiveness. Instead:

• Every aspect of the business contributes to marketing
• The product or service itself becomes the primary marketing tool
• Word-of-mouth and remarkable experiences drive growth

Implications for businesses:

• Focus on creating remarkable products and experiences
• Invest in design and user experience
• Empower employees at all levels to contribute to innovation
• Build systems that encourage and reward soft innovation

The champion's role in new marketing:

• Identify opportunities for remarkable improvements
• Bridge gaps between departments to create holistic innovations
• Advocate for resources to be allocated to product and experience enhancements rather than traditional advertising

Last updated: August 8, 2024