De-Averaging

This is a new word for me, but it expresses something I’ve only intuitively recognized before (and hadn’t clearly thought about): deaveraging. 

When we think about how we serve clients, we often think about averaging the products and services we provide. 

In a purely consumer example, this includes the logic behind why an online grocer suggests “people who buy jelly also buy peanut butter,” right after you put jelly in your cart.

“The average person would do this” is powerful logic. 

But what about the non-average people (in either direction)? 

Deaveraging is the process by which we look away from norms. It’s noting that some people who buy jelly don’t buy peanut butter, but maybe are into honey, or pickles, or…?!

Neither averaging or deaveraging solve all of our problems, but when used together – we can get a 360 degree view AND have a better chance at understanding where our most profitable, differentiated opportunities are in how we serve our clients. 

Ex. if you just offer peanut butter to jelly people and that’s worth an extra 50 cents of profit, but 1 in 5 prefer fluff, and 1 in 10 prefer cream cheese, and 1 in 20 prefer potato chips – all at > 50 cents profit… just observe the behavior and do the math. There might be better opportunities on the table than you even realize. All you have to do is give up on solely using “average.”