Discovering unseen opportunities with the rubber-band principle
In the ever-evolving landscape of commerce, creating a culture of innovation is no longer a choice but a necessity for success. With a marketplace flooded with solutions and services, adaptability and forward-thinking are the keys to success for new and existing companies alike. Increasingly, groundbreaking strategies have become the linchpin of sustained growth and competitiveness, and are shaping the way our industries evolve.
According to a survey conducted by McKinsey & Company, 84% of executives believe that innovation is crucial for their growth strategy. However, 94% of them also reported that their organisations are not satisfied with their innovation performance. This highlights the growing belief that innovation is a strategic necessity in today’s business world, but also recognises the significant challenges companies face in effectively implementing these innovative strategies to stay competitive and drive growth.
In this article we’ll examine how the rubber-band principle continues to help businesses recognise and capitalise on previously unseen opportunities. The innovation this principle offers is not based on convoluted theories but puts the consumer at the centre of the solution, to offer innovations that help them solve their real, existing challenges.
What is the rubber-band principle?
The origin of the rubber-band principle is rooted in the story of Kraft macaroni and cheese's inception. James Lewis Kraft, the visionary founder of Kraft Foods, encountered a salesman in St. Louis who had bundled boxes of pasta with bags of grated cheese, packaging them together with a simple rubber band. Kraft, recognising the brilliance of this concept, took the opportunity to patent the process of emulsifying and powdering cheese to give it a much longer shelf life. He introduced boxed macaroni and cheese to the market in 1937.
Arguably, there are many reasons behind Kraft’s success. When he first launched his blue box of Kraft Macaroni and Cheese, it was the height of the great depression, and this product was inexpensive. Its shelf life (10 months) would also have been attractive in a time when not everyone had refrigerators, and it was also a great way to feed the whole family something hearty and filling during a period of rationing in World War II while meat was not available.
However, at the heart of Kraft Foods' success was innovation in its most simple, but most needed, form: the convergence of technology and necessity. Kraft Foods' success was a pioneering technological breakthrough – the ability to effectively dry cheddar cheese, a feat particularly crucial during the challenging times of the Great Depression when economic efficiency was essential.
Rubber-band principle in modern business strategy
The metaphorical concept of the rubber-band principle holds valuable lessons for creative thinking and modern business strategies. But what lessons can today’s businesses take from this principle?
- Innovation through resourcefulness – just as the salesman used a rubber band to creatively package a meal solution, modern businesses can leverage innovation by finding resourceful ways to solve problems and meet customer needs. Creative thinking encourages companies to make the most of their available resources, whether that’s technology, talent, or existing products, to create new and valuable solutions.
- Meeting evolving customer needs – the rubber-band principle highlights the importance of identifying and addressing customer needs. For businesses today, understanding and adapting to changing customer preferences is essential. Creative thinking helps businesses stay agile and responsive to evolving market demands.
- Simplicity and convenience – in today's business landscape, where consumers often look for streamlined and user-friendly solutions, businesses can benefit from offering products or services that are easy to use and provide a hassle-free experience.
- Innovative packaging – while the principle was based on a rubber band being used for packaging, the metaphor extends to creative packaging of ideas, products, and services in today's marketing landscape. Unique or considered presentation can set a business apart and capture the attention of potential customers – particularly in an increasingly environmentally-conscious world.
- Resource efficiency – efficiency is of growing importance to modern business strategies. Just as Kraft sought efficient ways to store and transport cheese during the Depression, contemporary businesses strive for resource efficiency in their operations, whether it's reducing waste, optimising supply chains, or maximising the use of renewable energy sources.
- Balancing innovation with the existing – Kraft's concept reminds us that innovation doesn't always require entirely new inventions – it can also involve reimagining and repurposing existing elements. By recognising new value in existing solutions, businesses can maintain a balance between their roots and flagship services, while staying relevant in a dynamic marketplace.
The rubber-band principle serves as a metaphorical guide for embracing creativity, resourcefulness, and adaptability in modern business strategies. It encourages businesses to think differently, meet customer needs effectively, and explore innovative solutions within the context of today's ever-changing business landscape.
Innovation and opportunity in sales
Innovation plays a central role in driving business growth and development. It represents a dynamic force that propels companies forward, enabling them to stay competitive and relevant. At its core, innovation involves the introduction of new ideas, processes, products, or services that challenge the status quo and offer fresh solutions to existing problems. Businesses that actively foster a culture of innovation are better positioned to adapt to changing customer demands, navigate disruptions, and capitalise on emerging opportunities.
At its core, the rubber-band principle encourages businesses to provide added value for their customers. Just as the rubber band bound the grated cheese to the macaroni, so should companies look to see what they can offer their customers in addition to their existing services. This doesn’t mean they’ll always need to add a new product or service, but perhaps banding two existing services into one package could be revolutionary for their users. By considering packaging or delivery methods, companies can often relieve concerns or beat stumbling blocks for their customers, simply by addressing the base concern of their consumers. Identifying such unexplored avenues will allow for growth, while also helping the company in question to position themselves as industry leaders.
In the early 2000s, as the music industry grappled with the challenges posed by digital piracy and declining CD sales, Apple's innovative business strategy emerged as a game-changer. In 2001, Apple unveiled the iPod, a sleek and portable digital music player that quickly gained popularity. However, it was the launch of the iTunes Store in 2003 that truly transformed the music business. Steve Jobs, co-founder of Apple, recognised that people were increasingly interested in digital music but were often obtaining it illegally due to the lack of convenient alternatives. The iTunes Store allowed customers to purchase individual songs legally at just 99 cents each, creating a new and viable revenue stream for the music industry. This innovative strategy addressed a pressing consumer need and offered a more affordable and more convenient solution for buying and syncing music. The result was a massive shift in the music industry's landscape. iTunes very quickly became the world's largest music retailer, while fundamentally changing how people bought and listened to music. This innovative business strategy demonstrated the transformative power of thinking differently in a rapidly changing market.
Because of the existing relevance for innovations such as Kraft’s, examples of the rubber-band principle can be seen all over the sales landscape. Another well-known brand, Ikea, has over the last few years also capitalised on this principle to deliver an innovative solution to a basic need. In time for students going off to university (or perhaps more for the parents sending them), Ikea demonstrated rubber-band principle at its finest. The idea was a simple one: a starter-kit for the first-time uni student. The offer included a list of must-have items, all packaged in one convenient storage box (handily one of the items on the list) and sold at a bargain price. However, Ikea was so successful in identifying a need, that they had parents all over social media (and all over the world) raving about the offer:
Not only did Ikea recognise that for the first-time uni student (or parent), thinking of all the things you might need to be practically self-catered might be a challenge – and provide a list to help them on their way – but they also went one step further. By gathering all relevant items and putting them in an easily transportable container (that could also be of use once unpacked at the other end) and providing a money-saving solution while they were at it, Ikea has made itself the no-brainer solution for getting kitted out for university. Just as Kraft recognised in the Great Depression, so Ikea has recognised that in a cost-of-living crisis, its customers are just as financially restricted, but still have a need that must be fulfilled.
As David Pullara pointed out in his LinkedIn post, Ikea is helping its customers realise a need before it becomes a pressing matter. It’s helping to pre-empt issues and is offering a solution before any inconvenience can arise, positioning itself as a pragmatic expert on all things associated with independent living.
Using market analysis to identify opportunities
For businesses seeking sustainable growth and long-term success, market analysis and identifying untapped opportunities become crucial. Companies need a comprehensive assessment of the market landscape, their customer needs, as well as any emerging trends, allowing them to make informed decisions and strategic investments.
By examining factors such as market size, demographics, consumer behaviour, and purchasing trends, companies can refine their products or services to better align with customer needs and preferences. This not only enhances customer satisfaction but also helps in crafting effective marketing and sales strategies that resonate with the target market too. This commercial transformation is even more successful when companies start really listening to their target market. By introducing surveys and in-person interviews, they can get an even more comprehensive picture of their commercial performance. To ensure they’re staying on the right path, the most successful companies will also develop customer-satisfaction measures. By measuring against their baseline before introducing a new product or service, companies can then better understand the progress they're making.
Identifying untapped opportunities within the market can be a game-changer. It allows businesses to discover niche markets, unmet needs, or underserved segments that competitors may have overlooked. By capitalising on these opportunities, companies can gain a competitive advantage and differentiate themselves in the marketplace. This often leads to an increased market share, revenue growth, and the potential to become industry leaders.
For businesses in a saturated marketplace, staying ahead of emerging trends and technologies is essential. Market analysis enables businesses to spot these trends early and adapt their offerings accordingly. Agile businesses that continuously monitor the market and adapt to changing conditions are better equipped to thrive and innovate, ensuring their long-term viability.
Some of the biggest household names of today have used market analysis to identify opportunities and secure significant growth. Here are some companies that have used such opportunities to rise to and stay at the top of their industries:
- Netflix – originally a DVD rental service, Netflix recognised the shift in consumer behaviour towards streaming content. By analysing market trends and understanding that viewers wanted on-demand access to a wide range of movies and TV shows, Netflix transitioned into a streaming platform. This move revolutionised the entertainment industry and positioned Netflix as the global streaming giant it is today.
- Tesla - recognising the potential for electric vehicles (EVs) as a sustainable and environmentally friendly alternative to traditional combustion-engine cars, Tesla set out in 2003, investing heavily in EV technology and battery development. Having spotted a gap and opportunity in the market, Tesla released its first electric car, the Roadster, in 2008, and have been leading the production of popular electric vehicles that have disrupted the automotive industry ever since.
- Amazon – through comprehensive customer data analysis and market research, Amazon has continually identified opportunities to expand its product offerings. For example, Amazon Web Services (AWS) was born out of the company's recognition of the growing demand for cloud computing services. Today, AWS is a dominant player in the cloud services industry.
- Airbnb - Airbnb disrupted the hospitality industry by identifying a gap in the market in which travellers were looking for unique but affordable accommodations that went beyond traditional hotels. They created a platform that connects travellers directly with independent hosts who could offer a wide range of accommodation options. Recognising that holidaymakers and travellers wanted a unique experience, Airbnb has continued to improve its product with filters and search options, allowing customers to search by a growing number of quirks and features.
For those companies that invest in market analysis and adapt to changing trends, it can open up a world of new opportunities. With the opportunity to pivot their business models, businesses with an agile approach and a growth mindset can achieve remarkable success.
Developing stronger customer engagement and brand loyalty
The rubber-band principle can be applied effectively to enhance customer engagement by creating a dynamic and interactive relationship between businesses and their customers. As Kraft has successfully achieved, through market analysis, businesses can open the door to continual improvement which keeps them relevant. By listening to their customers, considering the market, and bringing a fresh perspective to an existing product, Kraft’s single box of macaroni cheese has now turned into a 36-product line of macaroni cheese. By using market data, companies can also develop a strong sense of customer engagement and brand loyalty:
- Feedback loops – establishing ongoing feedback channels with customers is key to nurturing lasting interactions. By encourage customers to share their insights and opinions, using tools such as surveys, reviews, or social media platforms, companies can actively acknowledge and respond to their feedback. This iterative conversation between company and customer not only strengthens customer relationships but also serves as a valuable source of market data to enhance products and services.
- Build anticipation – just as market data provides insights that help companies understand customer preferences and behaviour, businesses can also use this information to craft teaser campaigns, countdowns, or sneak peeks that generate excitement during product launches, events, or promotions. By aligning these strategies with customer insights, companies can pique customer interest and effectively boost engagement and brand loyalty.
- Personalisation – customising products, services, or marketing communications based on individual customer preferences and behaviours can build a profound sense of relevance and establish a strong personal bond with that customer. To do so though, companies must truly understand who their target customers are, what challenges they face, and where they’re headed. When customers have a wide choice of solutions, they will naturally gravitate towards the option that is most relevant to them, so when they find a company really understands their needs, it significantly boosts the likelihood of deepening their engagement and nurturing their loyalty to the brand.
- Loyalty programs – this is a great way for companies to reward their customers for their ongoing engagement while new purchases can keep them connected to the brand. Customers may engage more frequently to earn rewards or benefits, providing a learning opportunity for companies to recognise the motivating factors for their customers. By analysing this data, companies can gain valuable insights into what drives their customer engagement and brand loyalty, allowing them to further tailor their strategies and strengthen the customer-brand relationship.
- Education and value – offering educational content and valuable resources is a strategic approach for companies. By recognising pain points or areas of challenge for your ideal customers, companies can then provide relevant webinars, tutorials, blog posts, or newsletters that assist customers in addressing these challenges or improve their expertise. Market data works two-fold here: it allows you to identify areas that customers are confused about, but also can provide insights into their interests and needs, creating new paths of opportunity for that company to fulfil.
The rubber-brand principle here encourages businesses to keep in mind a culture of adding value, while also providing them with an excellent opportunity to build and strengthen their relationships with their customers. By keeping customers actively involved and connected to the brand, companies can more readily gather data and insights to help them shape the future of their product, while ensuring relevancy and success for the product with their target customers.
Adding value everyday
While adding value is instrumental to the success of product development, it is also a concept that has a key role to play in the day-to-day running of a company too. As the rubber-band principle demonstrates, at the core of successful businesses and transactions is the need for customers to experience added value. As an existing customer, you’ll likely only renew a contract, or increase a commitment, if you can see increased value in what you receive. Therefore, it is important for companies to reflect the rubber-band principle at every level of their business. It needs to become part of their ongoing culture, rather than a temporary strategy.
There are many ways companies can add value for their clients, without having to increase their spend, deliver a new product, or invest in new technologies. By harnessing the attitude of “how can we better serve our customers”, companies can start finding ways to add value for their customer base, even just through simple communication. Take sales triggers, for example. A company that integrates sales triggers into its outreach can put itself ahead of the competition and in a favourable position for their target audience. The pre-intent data that sales triggers provide allows sales teams to understand their customers and prospects better than ever before. The intelligence offered through these triggers can help sales teams (as well as prospective customers) in a number of ways:
- Real value – when prospects’ inboxes are constantly full of templated messages, market insights, solutions, or relevant information tailored to the prospect's individual needs offers a more valuable point of communication straight away. The term “something for nothing” will often ring alarm bells for the reluctant prospect for two reasons: one, they’ll be waiting for the catch; and two, it’s normally something they’re not interested in anyway. By offering value at each point of contact, without forcing your agenda or cornering them into a decision before they’re ready, sales teams become far more likely to engage prospects in conversation about a product or solution that is unknown to them but has a real value.
- Relevancy – sales triggers enable sales teams to deliver highly relevant messages and offers, at the right time for each individual prospect. With access to pre-intent data, sales professionals can tailor their communications to resonate with the specific challenges and interests of each prospect as they enter each new phase of development or growth. This relevancy enhances the likelihood of capturing the prospect's attention and fostering meaningful conversations. When prospects perceive that the sales engagement is directly relevant to their individual needs, they become far more open to engage and explore potential solutions. When time is precious, this relevancy becomes a real value-add as it potentially saves them time, money, and effort in recognising and addressing their evolving needs.
- Build trust – when companies recognise that trust is a cornerstone to successful sales relationships, it becomes central to their strategies. The market triggers that provide pre-intent data allow sales teams to approach prospects with a degree of knowledge and understanding that helps to build trust from the outset. When sales professionals can demonstrate an understanding of a prospect's situation, it conveys a genuine interest in helping and a commitment to providing value for them as a client. Trust itself has real value to clients, particularly when facing difficult economic times. By fostering a trusting relationship, prospects will rely on your company and solutions to see them through difficult times and will be more likely to further a relationship in the future
- Personalisation – when everyone wants to feel important and their businesses valued, personalisation becomes a powerful tool in sales. By leveraging pre-intent data, sales teams can create personalised experiences for each prospect. They can tailor their messaging, product recommendations, and even pricing to match the prospect's unique circumstances and objectives. Personalisation not only enhances engagement but also increases the likelihood of conversion, as prospects feel that the sales process is designed specifically for them. It allows them to find their own value in the services or products offered, and further adds to the relevancy and trust in the relationship.
- Timing – this is often the deal-breaker in sales cycles. Sales triggers provide invaluable insights into when prospects might be most receptive to engagement. By analysing pre-intent data, sales teams can identify the moment when a prospect is likely to be actively seeking a solution. This timely engagement ensures that sales professionals reach out when prospects are most open to considering their offerings, maximising the chances of conversion and minimising the risk of missed opportunities. It can also mean they save the prospect time in having to research potential solutions and reaching out to multiple parties. This provides value to the customer but also to the sales team who can increase their chances of success by being the first company to engage with the prospect.
Sales trigger data empowers sales teams by providing them with valuable insights that enhance their ability to deliver real value at the right time, to the right prospects. These capabilities not only improve the efficiency of sales efforts but also contribute to the development of strong, lasting customer relationships, and have the scope to save the prospective customer too.
Take away points
In the story of Kraft Foods macaroni and cheese's inception lies a timeless lesson about the power of innovation driven by both technology and necessity. James Lewis Kraft's visionary response to the economic challenges of the Great Depression, patenting a process to extend the shelf life of cheese, is a testament to the endless opportunities that can be uncovered through a convergence of inventive thinking and market demand. Kraft's ability to recognise the potential of an everyday rubber band, when creatively applied, ultimately led to the birth of a beloved product that continues to be a success even today.
This narrative serves as a compelling reminder that hidden opportunities often lurk in the most unexpected places. Just as Kraft's rubber band revolutionised the food industry, businesses today can harness the rubber-band principle to stretch their imagination, explore uncharted territories, and find innovative solutions to meet the evolving needs of their customers. The simple pairing of technology and fresh perspective, banded together, can lead to innovation that will set out a clear path to success.
By embracing this principle, companies can confidently navigate the dynamic currents of change in their industries and uncover the unseen opportunities that lie ahead. In doing so, they not only secure their own success but also contribute to the legacy of innovation that has shaped industries throughout history.
To see how you can start adding value to every interaction, get in touch for a demo of the Selligence platform and start seizing new opportunities today.