Changing the game: wants matter.

According to Seth Godin, there are "two ideologies that every product that struggles not to be a commodity stands on:

* Build something no one else can build (so you can charge enough to make a profit)

* Advertise it like crazy to build a brand (so you can charge enough to make a profit)"

I submit that in the auto industry, the companies that tend to do the first are the supplier companies, the ones from which the greatest number of innovations emerge. I further submit that in the case of the second point, the OEMs are the ones who do it and included within that approach are the manifold "incentives" that they are offering to customers.

Godin argues in Free Prize Inside!: The Next Big Marketing Idea (Portfolio; $19.95), "If marketing is about communicating to consumers that you've solved their problem, then the first step is to solve their problem." Which is often not the approach taken. One of the reasons why this is the case is because problem solving can require innovation. And Godin thinks that too often innovation is too troubling for people to embrace.

Let me to hasten to point out that this is not a marketing book per se. It should be of interest to anyone at any level in any company that is interested in being more than a proverbial (or--arrrgh!--actual) clock-puncher.

First of all, consider a company that's selling a given product and doing OK by it. Do the managers want to innovate (change, transform, modify, or otherwise do something different)? Nope. "Companies resist change because, at least at first, the new stuff costs more (and appears to risk more) than the old," Godin writes, adding, "The status quo appears to be safer, cheaper and easier." But appearances can be deceptive. If a company is racking up sales because it is essentially underwriting the purchases of its products with incentives ("Well, it's just a marketing cost, you see," tends to be one of the justifications), then what appears to be the case isn't as good as it looks.

Another problem with innovation is that if you change something, you may alienate those who were happy buying what it is that you had been selling. Godin points out that one of the things heard from management in companies is, "'We have happy customers. We want to keep them happy.' People who are happy are your company's worst enemy." No, Godin is not suggesting that you want alienated, embittered customers. He is nothing if not a provocateur when it comes to throwing out ideas, so it is necessary to take some of them with a grain of salt, some of them with a mine of salt. He argues that there is something to be said for those people who aren't wholly satisfied because, "Satisfied customers are unlikely to radically increase your sales. Satisfied customers are unlikely to push you and your colleagues to stay ahead of the competition." And if you don't stay ahead of your competition, you're invariably going to fall behind. Since examples are helpful, Godin provides good ones. Godin observes, "Yahoo!'s best customers weren't Google's first users. Nope. The happy Yahoo! customers weren't busy looking for a replacement." Good for Yahoo! as far as that went. But look at Google now. Godin suggests, "Google focused on dissatisfied Web surfers." And: "Southwest didn't sell to people who collected a ton of American Airlines frequent-flier miles." Those people were happy with American Airlines. And American Airlines would probably be happier if it was more like Southwest.

Finally, another problem with innovation is that it is perceived to be something that is done by people who wear literal or figurative white coats, the scientists and R & D personnel. This, Godin argues, is not exactly what he has in mind. At least not so far as the fundamental argument in this book goes. Instead, he harkens back, as the title of the book implies, to the day when many of us were more interested in the toy in the cereal box than the corn flakes. "Consumers (at home or at work) have always wanted more than they say they want. We proclaim ourselves to be rational, cost-conscious, Consumer Reports-reading smart people." But at the end of the day: "We want cool stuff." And cool stuff isn't necessary a technological moon shot. It can be far simpler. Thus, Godin's "free prize." He maintains, "a free prize is not about what a person needs. Instead, it satisfies our wants." And we want something special. Something different. It's what he calls "soft innovation": "Stuff like fast lube jobs, cell phone pricing plans and purple ketchup." To make an automotive analogy: Chrysler invented the minivan. When Honda came out with the second version of the Odyssey in '99, with the third-row seat that folds into the floor, it was a "free prize" to the extent that it was something that consumers not only wanted, but it was something that they talked about. Yes, it took some engineering and R & D, but it wasn't the complete reinvention of the minivan. And it was largely responsible for vaulting Honda to the position of benchmark. They changed the game. People talked. That's important. Godin's book just doesn't say: "Be innovative and you'll succeed." He actually walks through the steps that must be followed if an idea is to become a "free prize": "I don't care how amazing your idea is: If you can't get it implemented, it's worthless." And implementation can be tough because, he maintains, "The forces of mediocrity will band together to water down your innovation. They'll try to make it more popular (or so they think), easier to understand, easier to build, easier to fit within the existing ... model." They'll make it easier for themselves. And not changing is easier. Until the customers abandon your business and there's nothing left to protect.

[ILLUSTRATION OMITTED]

In Godin's view, it is not about incremental improvement. It is about being completely different. Google isn't a slightly better Yahoo! Southwest isn't a slightly different American. The Odyssey didn't succeed by adding a few more cupholders or a third row that moved 0.5-in. more. Incremental improvement may be a good thing, but it is probably insufficient. "You can't achieve rapid growth by being just a bit better than the competition. It's not enough to get people to switch. You'll be ignored in favor of the incumbent. At best, you'll grow as fast as the market does, no more."

Cracker Jack was probably not the first caramel corn. And most people would probably agree it's not the best. But that little extra, that game changer, that free prize, has made all the difference.--GSV