How marketers learned to sell more lettuce and why it matters

by Holland-Mark | January 21, 2015

A few years ago, I had the opportunity to attend a talk at the Harvard Business School given by Ranjay Gulati, and I learned something about marketing that I’ve never forgotten.

Gulati’s research at the time focused on the difference between an outside-in (customer-centric) approach and an inside-out (product-centric) approach. In order to explain his case for the outside-in approach, he used the example of lettuce manufacturers who kept trying to improve their product by asking about where people would prefer to buy it or how much they’d pay for it. One day, they took a step back and asked their customers about how making and consuming salad fit in with their busy lives. By shifting the question away from the product and understanding the larger context of people’s lives, they discovered that people wanted to eat more salad but didn’t have time to prepare it. This insight was the inspiration for all-in-one bagged salads, which solved the real problem – the time it took to get a salad on the table.

Today, bagged salad represents a multibillion-dollar industry. But this approach applies far beyond the leafy green category – Gulati found that between 2001 and 2007, the customer-centric companies he tracked delivered shareholder returns of 150 percent while the S&P 500 delivered 14 percent.

So all we have to do is focus on the customer, not the product…which is easy to say and hard to do. By definition, marketing is about promoting and selling products and services. The more time you spend thinking about the product, the easier it becomes to focus on the product rather than the customer. But Gulati’s research proves that it’s worth the effort to shift your focus and keep refocusing over time.

January is a big month for resolutions. It’s a time to reflect on the past and think about how we can be better versions of ourselves in the new year. So this year, I’m adding a new resolution to the list – to truly understand a problem before looking for the solution.