Knowledge Bank Blog, Pricing & Promotions, Range & Portfolio, Shopper Communication

Reversing Your Assumptions

On 15th January, Wikipedia celebrated its 20th birthday.

It was founded by Jimmy Wales. This is how he describes his vision… “Imagine a world in which every single person on the planet is given free access to the sum of all human knowledge. That is what we are doing”.

To achieve this vision he started with some basic assumptions and then reversed them.

Firstly, he reversed assumptions about how to build a bank of knowledge:

“Keep it narrow and focus on the big stuff”. Instead Wikipedia went broad. Articles on Shakespeare and Einstein along with ones on Homer Simpson and Peppa Pig.

“Get experts to write the articles”. Instead Wikipedia allows anyone to contribute. Currently there are 141,000 active contributors.

“Pay people to contribute”. Instead Wikipedia contributors do it for free.

Secondly, he reversed assumptions about the typical business model tech companies follow:

“Charge a subscription fee for access”. Instead Wikipedia is free.

“If you offer a free service generate revenue through advertising”. Instead Wikipedia has no advertising. It is funded through donations.

“Have a recommendation algorithm to keep readers on site as long as possible”. Instead Wikipedia has no algorithms.

Has reversing these assumptions worked? You’d say so. Wikipedia has 1.7 billion unique visitors each month. It has over 55 million articles written in 300 languages. You have probably visited it yourself in the past week.

Twenty years on, a lot of people have free access to a lot of human knowledge.

Why are we talking about this? In our industry many of the things we do are based on assumptions.

They might be assumptions about what to sell. Based on the products that are currently sold in your category. They might be assumptions about where to sell. Based on where your category is currently sold. They might be assumptions about how to sell. Based on how you typically launch NPD or promote.

Some of these will be the right assumptions. You should keep following them. But some may not be the right assumptions. They might mean that you are doing things because that is what you have always done or is what your competitors are doing.

To do things differently you need to think about them differently. You need to reverse your assumptions.

So how can you do this?

Price Expectations. Do you have assumptions about how much shoppers are prepared to pay in your category? The coffee category had an assumption until Nespresso came in and shoppers started paying about 40p per cup. The ready meal category had an assumption until Bigham’s came in and shoppers started paying £7 or so. The beer category had an assumption until craft came in and shoppers started paying £2 per can. What if you reversed the assumptions in your category? There might be a lot of value up for grabs.

Base & Promoted Prices. What is your assumption about the base price of your products? A price to sell most of your volume at? Or a price from which to promote? For many brands it is a price from which to promote. Have a base price of £2 but promote consistently and frequently at £1. What if you reversed your assumption? Said that you want most shoppers to be buying you at (or close to) your base price? What would you do differently? You might look to differentiate your proposition – like Hendrick’s. You might offer shallower discounts – like Peroni. You might run more brand building promotions – like Walkers flavour campaigns.

Usage Occasions. What are your assumptions about how your product is used? Are they based on how it is currently used or how it could be used? Hellmann’s Mayo is a good example of a product moving beyond its core usage occasions (e.g. sandwiches) and into new occasions by positioning it as an ingredient through its “Legendary Leftovers” campaign. Baileys is going beyond its core occasion (on its own over ice) to new occasions – Baileys & Ice Cream, Baileys Hot Chocolate. Reverse your assumptions and there may be lots of new usage occasions to go after.

Product Role. What are your assumptions about the role of your product? And how does that translate into shopper assumptions? For instance, the assumption about spirits & mixers was that the spirit was the primary product and the mixer was the secondary product (if it mattered at all). Fever Tree changed that. They made the mixer an equal. In fact sometimes it’s the lead “a Fever Tree tonic with X”. Berocca reframed their role. From something you use to recover (relevant on bad days) to something you use for mental sharpness (relevant every day). Reverse your assumptions and you are likely to reverse shopper assumptions.

You need assumptions. Without them you would just be freestyling.

But the assumptions you make can have a big impact on what you do. Reversing them can often take you down a different, more productive path. You can zig whilst your competitors zag.

Zig & Zag. Remember them? Even they have a Wikipedia page.

Feel free to forward. Have good weekend. Speak to you in a fortnight.