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Nov 25 2011

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Understanding non-consumption and barriers to innovation consumption

Eyes of many inventors lit up when they discover non-consumption (i.e. users who do not use any product for performing a particular function, though their might be alternatives available). For example, when we see people using paper based workflow when they can easily automate the entire process by using electronic workflows. Innovators immediately draw up plans and build a product that targets these non-consumers.

But when the results are not as expected, it becomes frustrating and they wonder why the non-consumption still exists. The reason is that non-consumption is most difficult to understand and solve, and it cannot be solved by dreaming up and developing a product within office walls. To disrupt non-consumption, the innovators need to get out in the field and understand why it exists in the first place. Once you understand the reasons you can try to solve for eliminating non-consumption and many times this has nothing to do with the product. In this blog I would highlight few reasons why non-consumption exists, drawing from my experience and reasons suggested in a must read book “The Innovator Guide to Growth “.

Here are top five reasons for non-consumption:

  1. Behavioral: Imagine a situation, a worker has used a paper based workflow for 30 years. She started on this job right after school and worries about her financials if this workflow automates. There could be hundreds of these workers in a company and they do not want any technology to disrupt their jobs. They will create big resistance to change and non-consumption will continue to exist. The solution here is change management and convincing management about the financial advantages of automating the process. Product innovation can do very little in terms of eliminating non-consumption.
  2. Specialized Skill: Jobs where specific skills are needed and technology is not an option. This is typically the case in services industry, like healthcare. But right type of technology can cut non-consumption by making the job less dependent on skill. An example shared in the book is about hip and knee implant makers improving their product over years, making it easy and foolproof to implant their products. This essentially is reducing the impact of orthopedic surgeons’ skill in the surgery, hence increasing consumption of the product earlier in the value chain.
  3. Price: Major reason for non-consumption to exist is that alternative technology is too expensive to justify the use. This constraint to product use can be easily spotted, but solving the problem takes significant analysis and innovation. Product/service providers need to understand different customer segments and the customers’ lifetime value to the company. Based on this analysis, they need to analyze the high value segments (both in terms of $ and scale) and see if Price is still a constraint. If it is then companies need to cut down the price of their products/service. This can be done by eliminating the features/functionality that the customers do not care or by improving overall efficiency in producing and delivering the product/service to the customers.
  4. Access: Customers might really like a product and would like to use it, but they are not able to use the product in their environment. For example, sales people who are always in the field cannot access the customer information/intelligence inside the sales management tool. Unless this tool has someway to deliver this information right before that big meeting. This will create access problems which will lead to non-consumption. This can be solved by methodically deconstructing the process in which the product/service is to be used, adding environmental restrictions to the process and innovating a product/service that will work within this constrained environment.
  5. Time: Here non-consumption has been created because it is very difficult or cumbersome to use the product. An example from the book is reading newspaper, as it is becoming increasingly difficult for people to spend hour+ in a day to read newspaper. Hence there has been a steady decline in newspaper readership. To identify this constraint, one needs to understand the ideal outcomes that a customer wants while using the product. And if one of the highly unsatisfied outcome is related to “ease of use” or “time to consume”, then we know that non-consumption is related to time. This can be solved by simplifying the product and making it easier to consume the product/service on-demand or in smaller chunks of time.

All of the above mentioned constraints to non-consumption can be solved by actively listening to customers, understanding their process/environments and innovating products that can be used in those environments. Please share your thoughts and experiences related to non-consumption in the comments.

Permanent link to this article: http://www.jagannemani.com/2011/11/25/understanding-non-consumption-and-barriers-to-innovation-consumption/