How do you create a new product that sells out in stores and pubs in its first week?

At a 1982 Apple planning retreat, six years into the existence of Apple, someone on the Mac team “thought they should do some market research to see what customers wanted”. “No,” Steve Jobs replied, “because customers don’t know what they want until we’ve shown them.”

I hate to disagree with Jobs, an icon that changed not only business but the world, but this is just mythologising.

On one of Jobs’ other points however, I concur: “Some people say, ‘give people what they want'. But that’s not my approach. Our job is to figure out what they’re going to want before they do.”

And of this Jobs was the master. He understood that what people really wanted was ‘1000 songs in your pocket’, single handedly inventing the future of the digital musical industry in an instant, based on his deep understanding of people. Seeing them as people rather than ‘consumers’ or ‘customers’ is a key to this. Give people what they really want and then they will become your customers.

Co-creating the future

This sentiment sits at the heart of an approach we use regularly to put people at the heart of our clients’ businesses – co-creation.

Co-creation is a qualitative process that brings together a company’s innovation and marketing teams with people in the target market, in order to produce an outcome that delivers mutual value – in either product, service or experience terms. In short, everyone gets what they need from the value exchange of money for goods or services; you scratch my back and I’ll scratch yours, if you like.

Innovation co-creation sessions comprise large groups, involving clients, people in the target market, agency partners and researchers which run for several hours. During these we focus on leaving the past behind and reinventing the future, encouraging our clients and their customers to immerse themselves in the process, working together on an equal footing in a mutually beneficial way to develop ideas.

At TRA we believe all humans are creative given the right environment and the co-creation process unlocks people’s ability to be creative. During co-creation clients collaborate with people who they want to target products or services towards in a creative way to understand them face-to-face, as real people. We also explore their current and emerging needs, which is not possible with other forms of co-creation carried out using online communities of people to harness the wisdom of the crowd.

Using design led techniques people build prototypes or create ideas in these sessions, but we don’t expect them to give us the answer – if they did, they would have already quit their day job and patented the next iPod!

Instead these serve as signals and direction for what excites them in regards to future possibilities, allowing us to work with businesses to future proof their innovation pipelines. This co-creation material also lives on in digital form as the project develops, for example a client’s own invented prototype drawings or advertising campaigns, to keep development on track and attached to real people’s needs, rather than simply opinions.

The proof is in the pudding

A successful new brand emerged by putting people firmly at the heart of a business’ innovation process on one of our recent projects.

Lion came to us with a challenge for Steinlager, one of the largest beer brands in New Zealand. It had been 10 years since Steinlager’s last innovation launch of Steinlager Pure, which had provided strong sales for Lion at that time.

The challenge was set to find the next big thing for Steinlager, a truly iconic Kiwi brand and a brand in need of reinvigoration.

The stakes were high, given Steinlager’s position and the fact that the cultural context around the brand had changed significantly since it first launched.

Lion’s innovation team had a range of early stage ideas based on what they felt could work, however these had been formed with little input from the target customer’s point of view.

We proposed Lion undertake co-creation sessions with their customers, rather than their previous approach of watching customers react to ideas from behind a one-way research mirror. This was a new way of understanding what people wanted, even before they did, and working hand in hand with them to develop existing ideas and find new ones.

Lion were game, and with the new approach we held customer co-creation sessions over two distinct stages where ideas were developed and progressed, culminating in a final strategy workshop where a go-to-market strategy was set for a new Japanese-inspired Steinlager beer – a New Zealand take on a Japanese classic.

The result was a product launch 18 months later that was an instant hit, which was bang on cultural code and most importantly, in-line with what people wanted:

• Tokyo Dry - two cultures, one beer.
• New Zealand’s raw ingredients meet Japanese brewing mastery. The result is a collision of two cultures in the best possible way.
• Tokyo Dry represented the next generation of premium beers, moving away from green bottled premium beers and the intellectual craft beer movement, into a new territory. It was subsequently Lion’s most successful product launch of all time.

The business results for Lion have been outstanding

• Tokyo Dry sold out in week 1 in bars, clubs and supermarkets across New Zealand.
• From 1329 new products launched last year into the category, Tokyo Dry has delivered over 40% of new product sales.
• It is Lion’s fastest new product launch to reach 1 Million litres of sales in over a decade, achieving this in only 10 weeks
• The Steinlager brand is back in growth.

Tokyo Dry demonstrates the value of people power, of being people-centric and putting them at the heart of an organisation’s innovation programme.

Putting aside sales targets exceeded, success measures nailed and KPI’s surpassed, the product’s alignment with what New Zealanders want is best captured in the phone call Lion received to their call centre after Tokyo Dry’s launch from Pete* (*name changed to protect the innocent), a dairy farmer from Taranaki.

“I want to nominate whoever came up with this for New Zealander of the year. What a friggin’ mean drop…What a bloody brilliant stroke of genius. A brilliant concept and with the Japanese symbols on the can, the marketing and even the box and how you pick it up. You’re on a winner with this one. I’m 65 years old and I’m bloody enjoying this and if I was to die tomorrow at least I’ve tasted Steinlager Tokyo Dry.”
- Pete

Clear validation for the Lion innovation team of the power of working ‘with’, rather than ‘for’ people. Like Steve Jobs believed: “Our job is to figure out what they’re going to want before they do.” This could be interpreted as a boastful statement from an icon or as a challenge to companies to use co-creation as a way to create the right environment for mutual value exchange, by authentically involving people in the process.