This article is part of a series that deals with social, economic, and technological dynamics and highlights the consequences for people, brands, and organizations.
Overview of the Article Series
- Why yesterday's business success and today's operational hecticness put your company at risk
- System optimization vs. system overcoming: why continuous improvement stands in the way of real innovations
- How system overcoming succeeds: from the obsession with optimization to strategic conviction
- Relevance, Resonance, and Acceptance: The Success Criteria of Every Entrepreneurial Bet
Every venture is comparable to a bet. This entrepreneurial bet can pay off, go wrong, or fail. Whether a bet fails or not is decided by the market with its paying (and non-paying) customers. Every entrepreneur is constantly required to keep an eye on their bet and its fit with the environment.
As complexity and dynamics increase, so does the need to make the bet watertight. What may sound paradoxical at first becomes the most important success factor in a dynamic competitive environment: preparing for surprises and dealing with uncertainty. Without these complexity management skills, there is a risk of experiencing "nasty surprises" with one's company and succumbing to increasing complexity.
Yesterday's success and today's operational hecticness are often the reason why serious developments and necessary changes are not recognized in time. The company is at risk of losing its connectivity if changes in the environment are ignored. Future-proof organizations are able to recognize changes and adapt in time to internal and external conditions. To do this, the organization relies on vigilant individuals who, unlike the organization, are able to perceive and condense weak but significant signals.
But what are the factors that decide the outcome of the entrepreneurial bet? What ensures that the value creation cycle is maintained? Which factors decide whether a company's services will be used in the long run?
Relevance: A Question of Interpretation
Today's society of abundance and multi-options offers more consumption possibilities than ever before. In the networked world we live in, there is almost nothing that doesn't exist. While a few decades ago much revolved around the existence and availability of goods and services, today it is a matter of course that a variety of products can be purchased in different variations, at different prices, and through different channels. At any time and in almost any place, it is possible to obtain goods and services from all over the world with just a few clicks.
The increasing supply of services and the increasing availability of information have turned seller markets into buyer markets: It is not the companies that decide what is bought. Customers can usually choose from several alternatives. They are spoiled for choice and usually have all the information they need to make largely autonomous decisions.
Such a (purchasing) decision process is less rational than most people would assume. In fact, it is a person's limbic preferences and the cultural power fields of society that guide our decision-making.
Only through this central realization was it possible at all to pave the way to the consumer society: for thousands of products that no one needed before, demand had to be generated so that people were willing to pay for them. Marketing, advertising, propaganda, and PR were and are significant drivers of globalization. Only by addressing emotional needs, longings, and motives could the value of novel goods and services be made apparent. Unlike today, however, only a few alternatives were available back then. Even if several providers for a product were available, it was usually difficult to access transparent information that would have allowed for a product comparison.
The findings on the nature of humans have always been abused for manipulative purposes. There have always been market criers who prevailed through volume rather than substance.
Due to the unprecedented selection and variation of goods and services, the question of the relevance of offered services is increasingly being asked today. What is really important? What has the greatest benefit? What relevant alternatives are there and what can be easily ignored?
If the supply of providers and products is low, what is available is highly sought after and sold quickly. In that case, the information and negotiation power lies with the companies. However, if the supply exceeds the demand, the consumer can decide what seems most useful for their situation.
Socially, the constant availability of countless alternatives has not only led to positive outcomes, but also to a high degree of excess and waste. Increasing consumer and environmental awareness, rising cost pressure, and other market-changing forces are leading consumers to question the meaning and purpose of an offer. Only if the consumer can recognize that the offer reliably solves the problem and thus makes a relevant utility contribution for them is there a chance that they will decide on the product or service.
However, the high expectations of customers cannot always be met. The offers do not always match the current needs and actual demands of the people interested in them. For people to recognize the value of the offers for themselves, the rightpeople must be reached first. Who are our ideal customers, employees, and partners?
Depending on the product or service, the utility and the resulting added value are not always immediately apparent to everyone. In addition to activating purchases for people who are already aware of their demand, awakening latent demands plays a decisive role in marketing success.
Whoever awakens demand and reliably covers it, wins. For this to succeed, it is important to know the emotions, motivations, and the understanding of value of your own target groups exactly. What do my ideal customers and employees want and what do they need?
For companies, it follows that:
- the relevance of the offers must be reviewed for existing and potential customer segments. Digital possibilities for designing and expanding the business model must be taken into account to ensure future viability.
- the relevance of the offers must be communicated more clearly for different customer segments or contexts so that their value becomes apparent. The claim must be: even before the first contact with the company, the value of the offers for specific people in specific problem contexts is clearly apparent.
Human-centricity requires constantly becoming aware of the needs of customers, employees, and partners, as well as the company's influence on society, in order to make decisions that serve the human being as an individual, society as a whole, and the environment as a living space.
Relevance is the prerequisite for resonance: if something seems irrelevant to us, it does not set us in motion. What does not seem useful to us finds little attention.
We maintain: The relevance of offerings from the perspective of individual customers and society as a whole is becoming the decisive success factor for every company. Companies remain viable in the long term in dense and dynamic markets only if they regularly face the question of what relevance their own services actually have for customers, employees, partners, and society. This relevance is not always apparent immediately and without effort. Marketing must therefore become a core competency of every company to reach the right people with the right messages.
Those who align their business model with fulfilling a truly relevant purpose and thus making a meaningful contribution to society have a good chance of winning paying customers in the long run and establishing themselves as a unique brand.
Resonance: A Question of Communication
Relevance lies largely in the eye of the beholder. What decides whether relevance is attributed to a topic, an idea, or an offer?
The impact of an idea results from its resonance. Whether a topic or an idea is picked up, thought further, and led to innovation is decided by the resonance generated through communication between the people and systems involved.
The same applies to goods and services, which are either perceived, examined more closely, and purchased, or simply ignored. For one person, it seems relevant; for another, it couldn't be more irrelevant. Value is in the eye of the beholder: In one case, resonance occurs between the customer and the company. In the other case, resonance is absent, and the offer may not even be perceived.
Resonance refers to the echo or the "vibration of a system" with another system. Put differently, resonance means the "entirety of the discussions and reactions caused by something." it is about what moves individuals and what social systems pick up communicatively.
The human being decides on the basis of their emotional evaluation, which they then try to justify rationally as best as possible. The question of relevance is therefore less dependent on objective criteria than on the limbic preferences of the customers as well as the general spirit of the times. Our individual imprints and conditionings determine our behavior. Through cultural power fields, we get into various contexts in which certain topics are treated and positions are represented. From the mixture of person-related and system-related aspects, individual constructions of reality emerge that determine how we see ourselves and the world. If the constructions of reality match, resonance can arise. However, if the constructions differ too much on the level of observations, explanations, or evaluations, dissonance is imminent.
If the customer has a demand, they will sooner or later set out to find a solution. Provided there is an event that triggers a need and thus generates demand. But what decides which offer they will ultimately choose?
Offer communication must generate resonance in addition to demand. It must reach customers in their living environments (contexts) and match their emotional preferences. The prevailing themes, emotions, and motivations must be addressed with the offer. The prevailing understanding of values of different customer segments must be taken into account and serve as a starting point for the question of what is needed for the right people to recognize the value of the offers.
Since we are not fully aware of either the spirit of the times or our limbic preferences, we cannot ask customers about them directly either. Rather, it requires empathy and foresight to find out, with intensive proximity to the market, what sets people and society in motion today and tomorrow.
Since our understanding of language is always tied to contexts, generating resonance is primarily about understanding the contextual interaction of communication in order to use it specifically within the framework of offer communication.
The more the company succeeds in being present in the right contexts with the matching messages, the higher the probability that a customer will choose the offer.
We maintain: A basically relevant-looking offer is only considered when the offer communication hits the pulse of the times and the subconscious preferences of the target group.
"In the network, one is only powerful if one finds resonance, but not because one wants to be powerful."
– Prof. Dr. Peter Kruse
Acceptance: A Question of Reputation
To prevail in dense and highly fragmented markets, besides recognizable relevance and palpable resonance, one needs a halfway secured acceptance. Whoever does not appear credible is "not bought into." The currency of acceptance is reputation. The keyword is: brand.
Reputation arises when companies generate relevant and resonance-capable expectations that are reliably fulfilled over a longer period of time. The permanently reliable fulfillment of expectations leads to satisfied and recommending customers. For this to succeed, companies must primarily act responsibly, with a long-term focus, and oriented toward prevailing norms to find acceptance.
„It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.“
– Warren Buffett
The variety of providers and offers on today's global markets does not only bring positive outcomes. Low entry barriers contribute to dubious, irrelevant, and unreliable providers flooding the market with inferior offers. Especially the consulting market has fallen into great disrepute in recent years. This damages the image of all consultants immensely. Uncertainty and a lack of trust on the part of customers are the result.
As consumers, we are therefore more dependent than ever on questioning the relevance of an offer ("does it work as expected") and checking it carefully ourselves, despite given resonance ("it makes a good impression").
The human being is always bound to the evaluations of their fellow humans in their decisions. On one hand, it would not be possible at all to assess the relevance or quality of an offer beforehand without them. On the other hand, decisions usually have to be legitimizable before our fellow humans for us to decide on a purchase.
Nothing, therefore, decides more about a purchase decision than the opinions of trusted people with similar limbic preferences.
- If an offer is not accepted by people from our environment, the market, or society in general, it is difficult for us as buyers to overlook it. Fear of rejection keeps many people from making decisions that deviate from the norm.
- Innovative companies have a hard time finding acceptance for their novel and thus not yet widely accepted offers.
- If the purchase of a product or a service goes hand in hand with acceptance among our fellow humans, a purchase becomes more likely. If the market shows satisfied customers and the theme or idea behind the offer enjoys social acceptance, then the chances are good that a purchase takes place (again) and a brand forms.
- Often, the acceptance gained externally alone by purchasing a specific product is enough to answer the question of relevance positively.
Through the unprecedented transparency of the internet, it is an easy task today, unlike in the past, to get a picture of a company's reputation. Reviews, opinions, and experience reports from (former) customers can be accessed or written within a few seconds.
We maintain: An offer classified as relevant that hits the pulse of the times and the emotional preferences of the target group can still fail if the acceptance of the market is not given or the reputation of the company stands in the way of the purchase. For the success and continued existence of a company, it is therefore crucial to let the already experienced acceptance of customers become part of the communication in order to encourage others in their decision. In the long run, only one path leads to acceptance: the reliable fulfillment of expectations, preferably self-generated ones.
Customer-centricity can grow from profound insights into the different living environments of customers. But only when it is clear to everyone what leads to relevance, resonance, and acceptance can the entire communication and behavior of all participants be aligned with the customer and their needs.
