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Insight. Proposition, Value, USP,LQuality, Expectations,
Beliefs, Brand Pillars...
A number of y<i!ars ago whcn I f.rst started consulting and tr.I.ining innovation, I became aware that the language
being used can seem complex and confusing. Many people find themsel'ffls in a role which invol'ffls innovation
without any support or explanation of the processes and terminology. For many this restrictS their contribution
and damages the creativity of the solutions which come out of their company or organisation.
My belief at that time was that any attempt to explain innovation properly should be simple and accessible to all
and we set about creating innovation tr.I.ining which was fun, engaging and actionable. The rest is history.
Since 2003 we ha'ffl trained IS,OOO people globally in the generation of insight, development of propositions and
the creation of finished solutions. We've also been lucky enough to consult on a multitude of fascinating projectS
along the way.
This innovation dictionary is a key part of demystifying the language of innovation. You may have been given
this because you ha'ffl in one of our innovation sessions, because you have participatcd in a workshop
or possibly because you ha'ffl attended one of our key note speeches somewhere around the world.
We hope that this will be<ome a useful reference for you right away and in whatever roles and companies you
move onto in the future.AII that we ask is that you contribute to our effort to simplify and open up the innovation
process and share this book with any colleague that may need it-If you need extr.l. copies, please get in touch and
we will be happy to help.
Enjoy innovating,
Mat Shore
Founder Outside In ComP<Jny.
www.OutsidelnComP<Jny.com
mOf@Outsideincompony.com
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Disruptive innovation:
Involves launching an entirely novel product or service rather than providing improved products & services along
the same lines as currently.The size of the consumer perceived benefit change is the only relevant disruption,
not the size of the technology change
Incremental Innovation:
A step forward along a specific technology trajectory with little uncertainty about outcomes and success and
is genen.lly minor improvements made by those working day to day with existing methods and technology
(both process and product), responding to short term goals. as% of innovations are incremental innovations.
This is sometimes known as a line extension or prodUCl improvement,
Positioning Innovation:
A dev.:lopment ill the way that me exining service. product, portfolio or brand is padaged up and sold to the
consumer. This is not just innovation in design, but communication, range line up and tone of voice.
Man companie$ categorise thi$ a$ the day to day role of brand and product management and simply refer to it
as marketing. Thi$ is sometime$ known as renovation.
NPD:
An abbreviation for New Product Development-It can be either a Di$ruptive or Incremental product-
Market Driven Innovation:
The development of $olutions based on market need$ rather than the available technology. It is Ouuide in thinking
End user driven innovation:
The development of $ohnions ba$ed on the need$ of the end user as a priority. Other customer need$ can be
considered, however these cannot take precedence over the needs of the end U$er (con$umer)
Technology push:
The reverse of market driven innovation where companies believe that they can create new and unknown need$
through the pure brilliance of their technology. Think Segway, smokeless cigarette$ and Olennl.
The Technology Trap:
The situation companie$ find them$elve$ in, whereby they continue to pursue and tell us we need an unwanted
technology due to the large amounu of development money they have already poured into it.Think Sony (Blu Ray,
Memory Sticks, Mini Disc, UMD Di$ks etc.)
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Innovation brief:

The document thu explains why an organisation is doing an innovation. how it will be achieved. who the
organisation is going to speak to in order to generate insights and what techniques they are going to use to do it.
Innovation Objectives:
The reason why an organisation has chosen to do in innovation
The 5 innovation objectives:
Applying technology to solve new needs.
A technology exists and the organisation seeks to find the most relevant or exciting new application or need that
it addresses.
Fixing what's already there.
An assumption that there is a solution already in the market, however it is sub.optimal or does not deliver the
key benefit adequately and needs to be improved. renovated or extended.
Improving the delivery.
An assumption that the existing solution is fundamentally sound technically. but could be more flexible or relevant
through better packaging or distribution.
Improving the targeting.
An assumption that through more sophisticated targeting or segmentation, your benefit can be delivered to a more
strategic audiel'lCe,
Improving the perception.
An assumption that there is an issue with the way that the marketplace and target user sees and thinks about your
existing solution which needs addressing.
Innovation Strategy:
How an organisation plans to meet its innovation objective.
25 innovation strategies:
There are 25 innovation strategies including 'understanding a ritual', 'busting a taboo', 'improving distribution' and'
niching the mainstream: See Outside in'" 25 innovation strategies session for more details
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Insight:
A revelation about what O U ~ target customer does and why they do it.This allows us to talk to them in a more
convincing and emotional WJ:j about why we can ben meet their needs.The best W<rf to think about an insight is to
consider it as a question that I'leeds answering; the more urgently it needs addressing the bigger the mart.et opportunity,
The] WWW's:
The simplest way to think about an insight as each one must contain:-
What does the end user do now!
Wtfy do they do it/This is vital to ensure you are probing motivation
Wow - that level and depth of understlmding of the issue is superior and better artkulate<l than the insights used by
my competition! - not merely stating an observation.
Written Insight:
Should be structured using the fol!owing logic:
Sltuatlon:Who am I!What is my context/What is going on around me!
Dilemma In that situation: How does the above situation cause a problem for mel
Perlect Situation: What does the world Iool< like if that problem went away!
Accepted Consumer Belief:
A line or remarlt about the C3tegory that plU'<lses the cOllsumer's prejudice about your Qtegory or bnrod.
This thought may keep the target group from showing the desired behavlour. These ACB's are often mistaken for
imights with dire conseqlleOCes.
Observation:
Merely a 2D fact-It is tnJe and it is observable bitt it does IlOtgive an explanation for the motivation behind an action
or behavior.
The 7 Whys.
The method of repeatedly asking)'OlJr target user why they need something over and over again in order to really
understand their insights on a deeper and more meaningful level.
I. Why do you shaver - Because worII tell me to.
2 Why do wol1< tell you to! - They think it gives a better impression to customen.
3. Why do they think It gives that Impresslonr .... etc.
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Target:
The person for whom your proposition will be first choice.
Consumer:
The person who consumes or uses our solution. The consumer may not always be: the purchaser.
Customer:
A business or organintion who we sell our solution to. this customer may or may not sell our solution on to
others. This could be a retailer, business p;lrtner, OEM manufacturer etc.
Segmentation:
The decision to limit the urget iota smaller groups of people based on a particular set of defining
characteristics. These might be age. gender. income. education. geography even attitudes and beliefs.
The more tightly we define the segmentation. the easier we find it to generate a common insight that the group
find resonates with them.
Socio-demographic profile:
A fancy way to describe segmenution.These profiles are sometimes given alpha-numeric titles like A
(Senior management) B (Middle management) CI (Clerical) C2 (Skilled manual worker) D (Unskilled worker)
E (Unemployed. pensioners)
4 rules of segmentation:
1.lt needs to be measurable. If you can't measure it you can't know its a viable target!
2.lt needs to be affordable. Make sure )'Ou have the budget to reach this segment!
3.lt needs to be reachable. If you cannot reach )'Our segment effectively with marketing communication then it
is not viable.
<I. It needs to be strategic. It needs to be a group aligned with the target for your brand.
Competitive set:
Relevant competitors to your proposition as defined by the target user. Remember that )'Our user
may see things differently than you! Also remember to indude dire<:t competitors (solutions providing the same
benefit using similar technology to you) and indirect competitors (solutions pl"oviding the same benefit using
different technology or methods to you). Keep in mind that the user just wants the best benefit, they don't care
so much which method achieves it.
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takeholder:
A key target group 01" individual essential to the success of our innovation.They are used to generate insights.
Stakeholder Chain:
An overview of 1I1l the stakeholders relevant to the success of 11 new innovation. At one end of the chain is the
manufaaurer or service provider and at the other end is the end user with other stakeholders such as purchasers.
decision makers, gatekeepers in between.
Stakeholder Network:
An extended version of the stakeholder chain which takes into account all indirect stakeholders and influencers
as well such as regulators, policy makers, interest groups etc.
End User:
The last person in the stakeholder chain to experience a difference or effect from the product.This distinction
is often vital to prevent us only talking to customers mid-chain without considering the needs of the user or
consumer at the end of the chain (could be a patient, passenger. child etc.) These stakeholders may be the key user
of the solution without ever needing to be the decision maker or purchaser.
Think- who is the end user of street lighting!
Key Stakeholder:
The person with the most to lose and most to gain from the problem we have identified (insight) and the benefit
~ offer.They are normally the one who mentions this insight first and can articulate most detail about the
problem so for this reason they are the focus of our efforts above all others.
Red Thread:
The way we describe an insight which is understood and shared by all stakeholders.Although the pain point of
the insight may have its epicentre with the key stakeholder all stakeholders share a vision that solving the problem
is of benef,t to them.
Value Chain:
A list which re-expresses the key stakeholder insight from the point of view of all the players in the stakeholder
chain. True to the red thread philosophy there are not multiple insights in the value chain only one.
However each stakeholder may see and describe the impaa of the same problem differently as it relates to them.
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Proposition.
Once we know our target's biggest unmet need (insight). we need to write a story that proposes a solution.
This proposition sketches an extremely broad brush idea of the solution. As an euty concept designed to check the
overall attractiveness of;m idea, the proposition needs to sketch an idea of the technology and formu that is
being proposed [Q make the idea tangible and credible. In order to prevent us proposing only things we already
know how to do or retrofitting, the proposition does not necessarily have to have technical feasibility
confirmed at this stage
Also referred to u:
Solution, Concept, Idea
Value Proposition:
A particular logic flow used to tell the story of how a need could be solved. It maintains the single minded locus
on what is most valuable throughout the story, adhering to the following fixed storytelling format
I. Insight: What is your biggest problem!
2. Benefit: We single-mindedly promise to fix that problem. this will provide the most value to you
J. Reason to Believe: Here is why you should believe we can do that
4. Discriminator: We provide the most value by fiXing your biggest problem better than anyone else
Proposition testing
The process of piKing multiple written propositions in front of customers and consumers to check their relative
attractiveness,8y establishing the rejection of a proposed solution or a fundamel'ltal issue with an idea at this early
written stage, this saves enormous amounts of time and money in teChnical development
Also referred to as:
Concept testing, Proposition confrontation
Concept lab:
Aworkshop or environment where a cross-functional team come together and brainstorm possible ideas in a
hothouse situation,
Sequential recycling:
A method where a team create propositions and then test them immediately with consumers and customers. Then,
building on the input they receive, the team make modifications to the propositions and retest them. This process can
continue all day or even over multiple days
Proposition validation.
The use of a quantitative study to give statistically significam confidence in a proposition. Normally these are
sophisticated on-line studies involVing hundreds of respondents
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The promise to the big problem expressed in the insight. It comes in 2 sorts. functional benefits and
emotional benefits because people have two parts to their brains (left and right) which require differerlt
information to engage them.
Functional benefit:
The right brain explanation of what your proposition rationally delivers and whit the user should functionally
expect your proposition to do. It should only ever contain one single minded benefit. and should be directly
answering the functional request of the user written in the perlecc situation section of your insight.
Emotional benefit:
Also known as High level benefit or Higher level benefit
The left brain e)(planation of the emotional effect felt by the user u a direct consequence of your proposition
delivering its functional benefit. This should single minded tied to the functional benefit and is not a
new benefit, but the of the S<lme thought.
Example: Anti Dandruff Shampoo
Functional Benefit: free hair
Benefit: Greater Se!f Confidence
Emotional Reward:
A nicer and more thought provoking way to describe emotional benefits
Laddering Up:
The intellectual process of describing the benefit based on the functional benefit. This be
in consumer and customer research using methodology called (see Outside In's
'2S' Connection techniques)
Maslow's hierarchy of needs:
A theory created in 194] which seeks other things to show how we value emotional benefits more
just function, this proVides solid why we never sell a proposition with only
description of the benefit it prOVides,
Off Benefit:
Aterm used to describe a proposition that is not strategically with the need of the target. This
would be perhaps better Off, Insight
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Reason to Believe
The p ~ r t of your proposition where it is spelled out to the target why they should believe the benefit can be
delivered. (f the insight is Why something needs to be done, then the benefit is What will be done and the
RTB is the How this will be done.
Rational support:
A'right brain' explanation of what the solution brwdly is (ie.lt's a new kind of light bulb or it's a handheld device
for surfing the neLl It could include a description of how the technology works but remember to describe this
technology or solution in language appropriate to the knowledge alld engagement l e ~ e l of the target. It should not
be a list of specS, but a broad brush overview.
Endorsement:
A'left brain' explanation that your technology is credible. It could be a relevant study or organization that says
your technology works to deliver the benefit (ie. Used by 1million people daily or endorsed by the
Scandinavian Skin Foundation)
Credibility Gap:
The distance between the benefit you are promising and the user's current trust that you can achieve your promise,
TIle bigger this gap is the more convincing your RTB needs to be.
Specifications.
A list of specific values or components that are inside a product. These are often mistakenly presented in a long list
as the Reason to Believe <I solution will work.
Example of specifications:
-4.2 Mhz
-1080 progressive scan
-Omega 3
Features:
Bundles of associated specific<ltions. translated into meaningful<lnd credible reasons to believe the
benefit can be achieved.
Example of features
-Easier to use imerlace
-Longer bittery life
-Cle<lrer picture
Also known as Attributes
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Discriminator
The single minded point of differerlCe that sets this proposition apart in target user's minds from all competition.
It should be based only on the functional and emotional benefit and never include information on the technology
(Reuon to Believe).We avoid putting our technology into the discriminator so that we do not need co keep
changing it every time our rechnology changes. Discriminators work best when the consumer has time to
understand and recall the single minded point of a propositlon.ThinkVolvo and the discriminator of Safest! A
discriminator often starn with words like,'The only' or 'The best way to' ... The discriminator is our internal
ilrticulation of our point of difference and is the basis on which we build our extemal claims.
Also known as a Unique Selling Point (USP)
Claim:
The form of words used outside of the in advertising and literature to communicate our
The only thing thu a discriminator and different from one another is the of our legal and
regulatory colleagues.
Example:
DIscriminator: Only our kills germs
Claim: Our bleich helps kill 99.9% of known germs
Claims Support:
The testing and data thilt will proVide evidence to support your As soon as proposition
discrimina.tor is creilted. c1ilims generation ilnd support begin. See Outside In's session'Tl'\12 to
superiority even if tec.hniGilly you ilre not!'
Tag Line:
The form of words used to ilrticulate your discriminator in form of words is often shorter
more memorable thiln the it hilS been copy written be types.
Also referred to u Selling LIne, Slogan, Payoff or Strap Line.
Example:
Apple-Think Different
Esso-Put tiger in your tank
Avis-We try harder
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Quality:
The degree to which your finished solution Is perceived by the user to ad".ieve me promise you made in your
original proposition.
Expectations:
Also known 35 Requirements
The deliverables mat USllr1 expeCt to receive on hearing our proposition. UndersUinding not only what we said,
but what me user understood is critical to delivering a satisfactory finished solution. The role of defIning these
expet::tations takes the product development process from me sometimes vague words of a proposition such as
Wherever you need it", to me everyday expectations of product usage. Expectations are critical input for the
subsequent specificarion of the solution by the technical team.
Emotional Expectations:
How a user expe<:[S to feel after experiencing your proposed solution
Functional Expectations:
What a user expecu your proposed solution to do in specific s,wations and how they expect to use and interact
wim it over its lifetime.
4 Expectation Responses
There are 4 response types mat users give uS regarding rneir expectations.They provide ever decreasing scope for uS
to specify someming unique and surprising.
I. DesIred Outcomes. What does me user expect the solution to achievel
2. Beliefs. What does me user expect our limitations and parameters to bel
3. Specifications. What specif,cations does the user expect us to deliverl
4. Solutions. What solution do mey expect uS to give meml
Voice of the customer:
The exact words your target uses to describe meir expectations
Touch points
Areas of interaction wim a solution where users will have expectations. such as ordering. specifying. delivery. day
to day usage. aftercare etc.
Standard Requirements.
A list 01 mings mat me product needs to deliver in order to jun exist and be legal.The lin 01 standard
requirements can run to hundreds or mousands of highly valid expectations. However these are not related to
the value of our proposition and should not distract uslrom me task of defining and delivering on me key value
related expectations as our priority. (see Kano must haves)
Also referred to us: Hygiene Factors, Basic requirements
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Satisfac ion:
The users' level of corltentment due to your finished solution meeting their exact eKpectations
NPS (Net Promoter Score):
A popular way to SCOn) satisfaction based on the net number of people who promote your solution [0 others
having experienced il..
CTQ's (Critical to Quality measures):
These translate the functional and emotional expectations of customers into measurable performance standards
to guide the development of our solution. If you don', know how you will measure wkat someone expects,
it becomes imponible to move forwanj with design and development in a meaningful way.
Objective CTQ's:
Numerical quamitative action standards which could be comparable. for example. 20% quieter or absolute
such as <100 db.
SUbjective CTQ's
Are perception based action standards. for example, 90% of users will say its easier to use
Kana Analysis:
This aoalysis breaks down expectatioos for products or services based 00 their impact 00 user satisfactioo.ln
order to determioe user priorities we develop a questioomire to gauge willingoess to p<l)' & customer
satisfactioo for different expect<ltioos. The output allows us to categorise features as delighters, satisfiers or
must haves.
The two Kano questions we a5k:
I) Rllte your satisfanioo if this solution had this feature
2) Rate your satisfaction if this solutioo did not have this attribute
Oellghter:
These are the source of differentiation for our inoovation.Their presence increases satisfaction, but their absence
does not decrease it. By focusing on these, we create 'Surprisingly Clever' solutions. These are vit<ll for driving
NPS as they tend to drive word of mouth.
Satisfier:
These are also called 'onedimensiooal attributes' aod they are directly lioked to voiced demaods of users, relative
to quality and their willingoess to pay. Their presence eohances satisfaction while absence reduces it.There is a
dire<:t linear correlation between satisfiers aod customer satisfaction-the better you do the more they like it!
Must Have (Oissatisfier):
These are also called 'St<lndard expect<ltions' or 'Hygiene' factors, These represent basic musts or functions
expected of a product/service. When they are present the effect on preference is neutral, when absent consumers are
dissatisfied.
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Value:
The value of 3 product or service is not solely about money.Value can only be measured by the usefulness or
desirability of something through the per<:eived benefit it offers to each individual. It means something different
to each person considering it, and that meaning can change as time, place and situation change.Value is subjective
not objective.
Stakeholder Value:
The eKcernal wording of your benefit which changes by stakeholder.
Value Translation:
The process of taking the benefit from your proposition and re-articulating it into the exact form of words that
most motivates each stakeholder. Value translation answers the fundamentlll question,
"what's the value of that ben",fit to met'
Example: Benefit-Calmer children in an MRI scanner
Stilkeholder V3lue:
Doctor-Better diagnosis. bener clinical outcomes
P<r.rents------Less stress. more reassun.nce
Pur<:hning-Higher throughput. better recommendation
Value communication:
The process of ensuring that communication to each stakeholder changes to emphasise the value 01 your
proposition specifically to them
Value based selling:
The process of selling products and services thu adapts the pitch to m;u(imise the per<:eived
v31ue to e3ch stakeholder.
Value based pricing:
The process of increasing the price you can demand for a solution. It sets selling prices on the perceived value to
the stakeholder. n.ther than on the actual COSt of the product, the m3rket price. competitors prices.
or the historical price
The so what test.
A technique designed to ch311enge yourself on wh3t the per<:eived value of benefits is to each stakeholder.
A key tool in value transl3tion.
Role mapping:
A process that allows you to rearticulate a benefit based on the role and working sryle of the stakeholder.
A key tool In value translation.
Decision mapping
A process that helps uS to rearticulue the benefit of our proposition based on the influence 3nd decisions thu
our stakeholder m3kes.A key tool in value transl3tion.
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Marketing:
Understanding the customer or consumer so well that the product euentially sellfltself.The better the quality of
the marketing. the more value the product gains in the eyes of the consumer (often way beyond the inherent cost of
its components. production and distribution).
Marketing Objectives:
These SUte JUSt where the company intends to be; at some specifit time in the future. 'What' is to be achieved and
'when' results are to be accomplished, but they do not sute 'how' the results are to be achieved.To be most
effective. objectives should be capable of measurement and therefore 'quantifiable'.This measurement m<l)' be in
terms of profit, share. sales volume etc.
Marketing Strategy:
Is one S[ep down from a marketing objective. It can serve as the foundation of a marketing plan.A marketing plan
conuins a set of specific actions required to successfully implemcnt a marketing Str.ltcgy.
Awareness
A strGtegy designed to build overall awareness of your market, product category or benefits.
Trial
A strGtegy designed to get urget consumers crying your product for real.
Penetration
A Str.ltegy to increase the number of households or locations that your product is used in. This can include the
same person being encour.lged to have more than one.
Upgrade
A strGtegy aimed at an existing user of your br.lnd or service and encouraging them to upgrade to a more
sophisticated solution or higher level benefit
Conversion
A strategy designed to make people change fmm an existjng solution or technology to a different way of achieving
the same benefit,
Loyalty
A strGtegy designed to make people more loyal to your br.lnd or solution
Milking
A strGtegy designed to make as much profit as possible from an existing product or service with minimal further
investment
CUlling
A strGtegy designed to discontinue a product, category or techr>ology completely.
Market dynamics:
Quantifiable measures of the f<lctors that affect your market,They allow you to undersund trends and activity
within your categories and once understood they can guide your response. Examples include frequency of
purchase, trial r.lte, repeat r.lte, loyalty, NPS, category growth
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Brand:
"/s a By Kknrifying and a producr or it defiverl 0 pledge of satisfaction and quoflry"
-Wolter Landor
Brand EqUity:
The value that is built up within a brand over time. The more a consumer or customer understands what a brand
stands for and values it, the mOI"1.' equity is accumulated. Equity can be destroyed by changing or failing to deliver
the promise of the brand.Think Mercedes A class and the brand equity of reliability, comfort and exclusivity.
Also known as Brand Value.
Branding:
The action of associating a particular innovation with an existing or new brand.
Brand Strategy:
The long term activities planned to develop the perception and value of a brand.
Brand Activation:
The activities conducted in the market to bring the brand to life for consumers and customers such as
sponsorship. events. point of sale. promotions. trialling, confel"1.'nces etc.
Brand Positioning.
The external wording of what the brand promises to cuStomers.
Example:
Philips-Sense and Slmpllclty
HSBC-The worlds local bank
Brand Pillars:
The internal commandments that ensure that all new innovations al"1.' strategically aligned to the brand positioning.
Without these pillars being checked against each new innovation, it would be possible to progl"1.'ss with a
solution that damages the brand. The proposition could test well with consumers but still not be appropriate for
your particular brand.
Brand Rules:
The specifics that make the brand pillars tangible for diffel"1.'nt functions within the organisation.
Example. All products should be useable without reference to a manual
Brand Values and Personality.
Words that 31"1.' used internally to ensure the tone of voice and image of a brand al"1.' consistent in advertiSing and
other brand aetivation activities.These should be aligned with the values and personality of the target audience.
Off Brand:
A proposition that is not strategically aligned to the brand positioning
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Open ended questioning:
A method of asking consumers and customers what they need in a way that cannot be answered with only a yes
or no.This way of working ensures that insight development has a chance to challenge our preconceptions. not to
validate your own ideas.
Closed questioning:
A method of asking questions which can only be answered yes or no,This is most often used by insight developers
who are short on time or not keen to hear something that might make them do something different than they
intended at the start.
Consumer/Customer connection:
A process of talking to and obserling your target to see what they need. There are numerous methods of achieving
a connection including focus groups. paired depths. home visits etc. (see Outside In's...... 2S Connection Techniques")
Discussion guide:
A way 01 preparing your questions in advance of your consumer/customer connection to ensure you ask good
open ended queStions and everyone on your team is clear what wilt be discussed.
Moderation:
The sklll of interviewing people to see what they need. Depending on the type and complexity of the connection
undertaken, this can be done by members of the project team themselves or may require professional moderation.
Focus Group:
A popular type of connection. where the conversation is focused by a moderator among a group of around 8 target
users.
Qualitative research:
Research conduCted with a small sample of the target. The output is normally more in depth but less representative.
Quality over quantity.
Quantitative research:
Market research that is conducted amongst larger statistically significant sample sizes. Is often highly structured and
does not allow for on the fly questioning. so is less flexible and emotional in its output
Copyright Outside In Company 2012. Contact Mat@OutsideInCompany.com

<)Outside in
Copyright Outside In Company 2012. Contact Mat@OutsideInCompany.com

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