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<h2>"How to reduce unit cost, use AI for insights, increase market demand, LoveSac, and irrational loyalty."</h2>
<p><em>Product development and manufacturing client with over 10K monthly followers.</em></p>
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<table><tbody><tr><td><p>Hey everybody, it’s November 2nd, 2023. In this issue of Product EVO’s 5X5, we cover our proven tactics for reducing unit cost, how to use AI for insights for product innovation, increasing market demand using core emotional drivers, LoveSac’s pivot, and creating irrational loyalty brand loyalty.</p><p>Enjoy :)</p><ol><li><strong>Reduce COGS:</strong>&nbsp;5 Proven tactics to negotiate with suppliers.</li><li><strong>AI For Innovation:</strong>&nbsp;AI is bad at creating insights unless you know how to ask.</li><li><strong>Increase Market Demand:</strong>&nbsp;Use emotional drivers to develop your core product and drive market demand.</li><li><strong>LoveSac Pivot:</strong>&nbsp;LoveSac’s pivot from niche product to mass market.</li><li><strong>Irrational Brand Loyalty:</strong>&nbsp;Make your customers feel like they are cheating on you if they stray.</li></ol></td></tr></tbody></table>
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<table><tbody><tr><td><h2>X1 - REDUCE YOUR UNIT COST WITH OUR PROVEN SUPPLIER NEGOTIATING TACTICS</h2></td></tr></tbody></table>
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<table><tbody><tr><td><p>By simply being aware of what to avoid and where to lean in when negotiating with a manufacturer, you increase your likelihood of success.</p><p>Some of the techniques we recommend may seem counterintuitive, but they are rooted in a decade of experience working with hundreds of brands and manufacturing millions of product units.</p><p>In our latest blog post, we’ve outlined the exact process we use to negotiate with overseas manufacturers to get the best price and quality:</p><ol><li>Understand Your Product Specs Before You Begin Negotiations</li><li>Search for the Best Value, Not the Cheapest Price</li><li>Do a Deep Dive into What’s Driving Cost</li><li>Look for Red Flags During Negotiations</li><li>Build a Partnership with Your Manufacturer</li></ol><p>Read our&nbsp;<a rel="noopener noreferrer" href="https://www.productevo.io/blog/negotiating-overseas-manufacturer-success?utm_campaign=Signature%20Product%20Development&amp;utm_source=hs_email&amp;utm_medium=email&amp;utm_content=280851848&amp;_hsenc=p2ANqtz-_NUx6Bf7rJVtuoWR77gP33D3RkawFf-AO868cLK94WkohAF8CipTvW2BEWhNBcaWM8LpSEGA6X7qkYhJq6Vr2PmZsiVQ">post on How to Negotiate with Suppliers</a>&nbsp;to get the details of how we apply the steps above in real-world situations.</p></td></tr></tbody></table>
<table><tbody><tr><td><h2>X2 - HOW TO USE AI FOR PRODUCT INNOVATION INSIGHTS</h2></td></tr></tbody></table>
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<table><tbody><tr><td><p>A beautifully articulated insight can simultaneously inspire a new product design, a new business model, and an innovative marketing campaign, all three of which can give brands a long-term competitive advantage.</p><p>The problem with AI is it is far better suited to regurgitating what is already out there, but it rarely gives you anything new…unless you know how to prompt it correctly.</p><p>&nbsp;Here are three techniques to use AI to get insights:</p><ol><li>Find the contradictions</li><li>Look at the periphery</li><li>Keep asking why</li></ol><p>Get the prompt details for these three techniques in Chris Kocek’s article on&nbsp;<a rel="noopener noreferrer" href="https://www.fastcompany.com/90961117/generative-ai-wont-give-you-insights-unless-you-use-these-3-techniques?utm_campaign=Signature%20Product%20Development&amp;utm_source=hs_email&amp;utm_medium=email&amp;utm_content=280851848&amp;_hsenc=p2ANqtz-_NUx6Bf7rJVtuoWR77gP33D3RkawFf-AO868cLK94WkohAF8CipTvW2BEWhNBcaWM8LpSEGA6X7qkYhJq6Vr2PmZsiVQ">Fast Company</a>.</p></td></tr></tbody></table>
<table><tbody><tr><td><h2>X3 - HOW TO INCREASE MARKET DEMAND WITH&nbsp;EMOTIONAL DRIVERS</h2></td></tr></tbody></table>
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<table><tbody><tr><td><p>Developing products with strong sales out of the gate is hard. Too many products fall short of what companies envisioned for them. The most common issue we see is clients that get too focused on the “Actual Product” and forget to connect their product with a “Core Product” that connects with customers on a deeper emotional level.&nbsp;</p><p>&nbsp;The core product is the&nbsp;<strong>psychological need or reason</strong>&nbsp;for this thing existing. For example, if you buy a Tesla, the actual product you are buying is a car, but the core reason for buying that may be for personal prestige, or praise from others who value reducing carbon emissions.&nbsp;&nbsp;</p><p>Victor Schwab was a writer and marketer who first published the book “Mail Order Strategy” back in 1956. He lists 40 key emotional drivers that all humans respond to. Use this list to connect your actual product to a deeper core product during development.</p><p>There are four categories of natural, emotional motivators that each person has:&nbsp;</p><ul><li><strong>People want to GAIN:</strong>&nbsp;Health, leisure, business, finances, prestige, etc.&nbsp;</li><li><strong>People want to SAVE:</strong>&nbsp;Time, Money, Embarrassment, Risk, etc.&nbsp;&nbsp;</li><li><strong>People want to BE (OR BE SEEN AS)</strong>: Good at things, productive, influential, relevant, good (parents, citizens, community members, etc.)</li><li><strong>People want to DO</strong>:&nbsp;Express themselves, improve themselves, appreciate beauty, win others’ affection, etc.</li></ul><p>Read the full article by Kare Garnes here:&nbsp;<a rel="noopener noreferrer" href="https://www.linkedin.com/pulse/copywriting-40-emotional-drivers-enhance-your-content-k%C3%A5re-garnes/?utm_campaign=Signature%20Product%20Development&amp;utm_source=hs_email&amp;utm_medium=email&amp;utm_content=280851848&amp;_hsenc=p2ANqtz-_NUx6Bf7rJVtuoWR77gP33D3RkawFf-AO868cLK94WkohAF8CipTvW2BEWhNBcaWM8LpSEGA6X7qkYhJq6Vr2PmZsiVQ">40 Key Emotional Drivers to Use In Copywriting</a>.</p></td></tr></tbody></table>
<table><tbody><tr><td><h2>X4 -&nbsp;DESIGNING FOR LIFE: THE LOVE SAC STORY</h2></td></tr></tbody></table>
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<figure tabindex="0" class="ql-card-editable ql-card-figure ql-align-center"><img src="https://images-production.authory.com/SarahALybrand/0ff81f4a-6712-4c2d-9d7c-d01bf6a002bb/ce17eda0-b4e1-11ee-9095-fdfa9ee12b17.jpg" alt="Photo | Utah Business"><figcaption>Photo | Utah Business</figcaption></figure>
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<table><tbody><tr><td><p>Utah native Shawn Nelson’s story of how he founded his company, Love Sac, is not only inspiring —- but also a lesson in staying relevant in a rapidly changing world.&nbsp;</p><p>&nbsp;When his company pivoted from a successful bean bag company into a blockbuster couch company, Nelson proved that nothing in business has to be static. He changed both his approach and product: instead of the bean bags they became known for, Love Sac started building sectional, adaptable couches made with the kind of craftsmanship, clever design, and innovation that wins lifetime loyalty.&nbsp;</p><p>“Sectionals gave us a new future. Their rapid adoption revealed that people love the idea of objects being built to last a lifetime and designed to evolve throughout a customer’s life.”&nbsp;</p><p>Nelson explains how planned obsolescence was no way to make a brand that lasts. He calls his new approach, Designed For Life&nbsp;“and it will inform everything we do from here on out.”</p><p><br>Read Nelson’s full story here:&nbsp;<a rel="noopener noreferrer" href="https://www.utahbusiness.com/how-shawn-nelson-founded-lovesac-utah-business-founders-series/?utm_campaign=Signature%20Product%20Development&amp;utm_source=hs_email&amp;utm_medium=email&amp;utm_content=280851848&amp;_hsenc=p2ANqtz-_NUx6Bf7rJVtuoWR77gP33D3RkawFf-AO868cLK94WkohAF8CipTvW2BEWhNBcaWM8LpSEGA6X7qkYhJq6Vr2PmZsiVQ">Lovesac Story</a></p></td></tr></tbody></table>
<table><tbody><tr><td><h2>X5 -&nbsp;HOW TO MAKE YOUR CUSTOMERS FEEL LIKE THEY ARE CHEATING ON YOU IF THEY STRAY</h2></td></tr></tbody></table>
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<table><tbody><tr><td><p>Loyal customers are always the goal. But&nbsp;</p><p><a rel="noopener noreferrer" href="https://www.forbes.com/sites/danieldambrosio/2019/05/26/are-you-a-victim-of-irrational-loyalty-branding-maven-deb-gabor-certainly-hopes-so/?sh=12947e817985&amp;utm_campaign=Signature%20Product%20Development&amp;utm_source=hs_email&amp;utm_medium=email&amp;utm_content=280851848&amp;_hsenc=p2ANqtz-_NUx6Bf7rJVtuoWR77gP33D3RkawFf-AO868cLK94WkohAF8CipTvW2BEWhNBcaWM8LpSEGA6X7qkYhJq6Vr2PmZsiVQ">‘Irrational’ loyalty</a>? That’s the <em>gold.&nbsp;</em></p><p>How nice would it be to win your target customer's complete and utter devotion? This, says marketer Deb Gabor, is what the best smart branding can do. But of course, that level of fandom and fidelity has to be earned. She says,</p><blockquote class="ql-align-center"><strong>When you get branding right, you create "Irrational Loyalty."</strong></blockquote><p>&nbsp;To get branding just right, “<a rel="noopener noreferrer" href="https://www.forbes.com/sites/danieldambrosio/2019/05/26/are-you-a-victim-of-irrational-loyalty-branding-maven-deb-gabor-certainly-hopes-so/?sh=12947e817985&amp;utm_campaign=Signature%20Product%20Development&amp;utm_source=hs_email&amp;utm_medium=email&amp;utm_content=280851848&amp;_hsenc=p2ANqtz-_NUx6Bf7rJVtuoWR77gP33D3RkawFf-AO868cLK94WkohAF8CipTvW2BEWhNBcaWM8LpSEGA6X7qkYhJq6Vr2PmZsiVQ">the first thing you have to do is understand who the human being is behind the purchase</a>.” When you get this right, you’ll have a better chance of creating a perfectly crafted brand voice tuned to resonate with your exact target customer, with a clear value proposition, memorable mission, and an inspiring motto.</p><p>&nbsp;In fact, they might get so attached it defies logic. It could be that, at some point, they’d be better served by something less expensive or by a product with different features – but none of that matters anymore. Because you’ve won them over, and now it’s a Forever Thing.</p></td></tr></tbody></table>
<table><tbody><tr><td><h2>GET A PRODUCT QUOTE</h2></td></tr></tbody></table>
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<table><tbody><tr><td><p>Product EVO helps founders and product managers develop new products that maximize sales potential without wasting their limited resources. We specialize in Market Validation, Prototyping, Product Development, Sourcing, Manufacturing, and Quality Control.</p><p>The easiest way to try us out is to get a free product costing analysis with real-world manufacturability feedback from factories for your product</p></td></tr></tbody></table>
<table><tbody><tr><td><p><a rel="noopener noreferrer" href="https://meetings.hubspot.com/joshtay00/costing-analysis?utm_campaign=Signature%20Product%20Development&amp;utm_source=hs_email&amp;utm_medium=email&amp;utm_content=280851848&amp;_hsenc=p2ANqtz-_NUx6Bf7rJVtuoWR77gP33D3RkawFf-AO868cLK94WkohAF8CipTvW2BEWhNBcaWM8LpSEGA6X7qkYhJq6Vr2PmZsiVQ"><strong>Get a Free Product Cost Analysis from Product EVO</strong></a></p><p><br></p></td></tr></tbody></table>
<table><tbody><tr><td><h2>WHAT IS THE 5X5 NEWSLETTER?</h2></td></tr></tbody></table>
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<table><tbody><tr><td><p>Once per month, we send out a memo to our clients and key partners to share thoughts and insights we believe they should know.</p><p>We focus on key trends, insights, articles, and new ideas related to product development. And yeah, we try to sneak some fun things in as well.&nbsp;&nbsp;<br>Now, you can get the same updates and we don’t even have to work together. Share this with a friend.&nbsp;<a rel="noopener noreferrer" href="https://create.productevo.io/5x5-newsletter?utm_campaign=Signature%20Product%20Development&amp;utm_source=hs_email&amp;utm_medium=email&amp;utm_content=280851848&amp;_hsenc=p2ANqtz-_NUx6Bf7rJVtuoWR77gP33D3RkawFf-AO868cLK94WkohAF8CipTvW2BEWhNBcaWM8LpSEGA6X7qkYhJq6Vr2PmZsiVQ">They can click here to sign up</a>.</p></td></tr></tbody></table>
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"How to reduce unit cost, use AI for insights, increase market demand, LoveSac, and irrational loyalty." Product development and manufacturing client with over 10K monthly followers. Hey everybody, it’s November 2nd, 2023. In this issue of Product…

Sarah A. Lybrand

The 5x5 Newsletter (No. 31)