Tuesday, August 21, 2007

You don't get the right answer if you ask the wrong question

Jeffrey over at Innovate on Purpose is concerned that,
while asking people what they want seems reasonable, it isn't a very useful way to create interesting, unique innovations.
With all due respect, Jeffrey is getting answers that aren't useful because he is asking the wrong questions. He uses Southwest Airlines as an example.
When Southwest disrupted the market, most existing fliers demanded frequent flier miles and were not likely to switch, so they identified a market that didn't demand frequent flier miles. Imagine asking customers if they wanted an airline without frequent flier miles!
Well asking customers if they wanted an airline without frequent flier miles was the wrong question. The right question to ask passengers was what about their flying experience was difficult, expensive, or inconvenient.

Imagine the earful that Southwest would have gotten. Customers surely would have said is that they absolutely hated connections. They take too long, they add unnecessary cost, and don't even bring up missed connections. What passengers really want is to get from where they are to where they want to be as efficiently and as quickly as they can.

The biggest problem with giving customers what they wanted wasn't the frequent flier system, it was the hub system. Airlines assumed that they needed to get customers from any location to any other location. Given that assumption, they created the central hub system as a cost effective clearing house of sorts.

Southwest changed the rules of competition, like all good Swamp Foxes do. They looked at the high volume routes, like Los Angeles to Las Vegas, and they implemented a very simple idea. They'd fly customers between Los Angeles to Las Vegas faster and less expensively that any other airline, because they didn't have the expensive hub system to support. And to make it even less expensive, they'd use only one kind of airplane, to make maintenance easier and less costly. And they wouldn't serve crappy airline meals, so passengers could bring their own on board. And since they wouldn't be flying passengers all over the country to get them where them wanted to go, they'd do away with the frequent flier miles.

Passengers who wanted to go to Los Angeles to Las Vegas and back, and those that wanted to fly other high volume routes, loved it. Southwest didn't worry about other customers, because they weren't Soutwest's market.

Southwest asked the right question. What were customers trying to do but finding all of their existing options expensive, difficult or inconvenient. As a result, Southwest was able to make a boatload of money by creating an entirely new segment of the airline industry that was less costly to passengers and at the same time more profitable to Southwest. Not bad.

No comments: