Summary: When you’re looking to move into an industry, follow this guidance on finding the opportunity to make an impact.
The first step is you need to look at where the opportunity is. From your segmentation, you can see how consumers are grouped based on the famous 4.
You now have to begin to ask yourself, “What can we do here based on what we know?” You need to start coming up with ideas based on the opportunities that the market shows and what you feel you can make.
Based on what you know, where can you see the greatest opportunity scores amongst the greatest number of people? Sure you can come along and provide a solution to any old job, but in reality, the job has to be important and the level of dissatisfaction high (expressed or otherwise) in order to make an impact. That’s what so many “me too” companies don’t get. They make a few incremental improvements to an existing solution and expect people to beat their door down for it – but it’s not going to happen. It’s no good launching a product that just slightly improves on everything else that’s out there. In any event, incremental improvements can and will always be quickly copied.
There are 9 ways to build demand with differing combinations of –
sell existing, modified or new products
to
existing customers, to new geographic markets, or to new types of customers.
Whatever you decide to do, first, you’ll need to focus on the actual value itself. How close can you get to the ultimate solution?
Will you be…
- Making improvements to current solutions?
- Meeting segments ideal solutions?
- Giving segments the companies ideal solution, surpassing their ideal solutions?
- A selection of various ideas from all of the above?
You should now know the famous 4 for each segment and be ready to decide which ones to research further.
Just as with choosing segments, at this point we are not choosing what ideas we are definitely going to pursue, again that comes much later, but we are trying to rule out definite no go ideas if we can. We are also trying to rule out ways of creating better value that are not worthwhile. If you can rule some segments and ideas out now as definite “no go areas”, then you’ll save time on research, because you won’t need to research competitors and their offerings for those ruled out ideas and segments. If time and money are less of a concern then you may wish to include all ideas and segments in your research.
The Right Focus of your mind, energy, emotions and time for value innovation is:
Job – approach – benefits per costs – competition
The main focus should be on the job consumers are trying to do and how well the competitions solutions meet it. Your main focus should not be on the actual approach. Many companies soon become obsessed with the approach – the solution itself and how it works – at the expense of everything else because they thought it up. It’s the classic self centred approach. A company becomes excited by their solution because it matters to them, but they operate in a bubble and forget the rest of the world. The approach is how you are going to do the job better, and of course is very important, yet get the job wrong and it matters not one bit. Likewise even if you get both the job and solution right but forget to measure it against the competition’s solutions, you’ll not excite others with what you have to offer.
You have to know the realities. What are people trying to do? How are they doing it? What are they using? How exactly will what you offer do better?
We now need to assess roughly how we might be able to bring better value to the segments we have found and in what way.
For example you have 3 ideas in mind for a broad segment – men that shave.
The first is an improvement of current solutions – by adding blades to a razor, doubling how long they last, and making them cheaper from a new material.
The second meets consumers ideal solution – a razor that lasts forever made out of a revolutionary composite material. It simply never needs replacing.
The third is the company’s ideal solution – a tablet taken once a month that prevents all hair growth on the face. Now there’s no need to even go through the actions of shaving or remember to do it, let alone buy new razors every few weeks.
As you can see, when you go onto identify competitors in the next stage, how their Value Creators match up to the Value offered by each solution will be very different. Indeed for the third idea, some of the value creators competitors have worked so hard on, simply become valueless overnight – they no longer matter. Contrast this with the value creators used for the first idea, the main competitors are so well suited they could make changes in a matter of weeks to counter us. Value creators are only valuable if they provide the value required by consumers.
Secondly, remember, don’t just focus on the products, focus on the entire Consumer Value Line. So whenever you have solutions in mind ask “Can we see new and better Value Lines for each of these opportunities, these new solutions?” Look at these especially in the areas of communication and delivery of value. Can you really innovate along the Consumer, Product or Company Value Line? Innovation can take place not just in a product but in a variety of other ways. Across processes, or changing the way a product is marketed, a new business model or a new way of doing things.
From your initial consumer research you should have a good idea of the competing solutions for the jobs and outcomes you want to target. You may have already identified segments of consumers were you feel you can offer something better, or you still may be unsure. As well as looking at the actual Value, you look at the entire Value Line from the value receiver’s side – remember this is -
Identify value – Create value – Look for value – Choose value – Get value – Use value – Evaluate value – Sustain value
An example of two separate Consumer Value Lines for the same product type would be –
Two segments that buy high end ladies designers clothes. Both segments prize designer names and luxury and care little for price, however Segment A enjoy the shopping experience, and being seen buying these designer goods. They will only buy from “The Big Name Shops”. Segment B however lacks the time to shop, and is more interested in just getting the clothes with the minimum of fuss. They are more price sensitive.
In both cases the Ultimate Goal is “Buy Designer Clothes” but Segment A’s other jobs are “Look and feel important whilst shopping”, “Be seen at the main shops”, “Escape through shopping”, “Be served well”, whilst Segment B’s other jobs are “Save time”, “Save money”, “Quick delivery” and “Easy returns”.
Let’s look at the different Consumer Value Lines and the main Value Factors, in other words what’s the most important to the Consumer at each stage of their Experience.
| Segment A
Retail |
|||||||
| Identify value | Create value | Look for value | Choose value | Get value | Use value | Evaluate value | Sustain |
| Need for clothes | Fashion
Friends What Likes |
(Retail Stores)
Experience Choice Be Seen |
Experience
Try On Look Feel Name Where Sold Choice Be Seen Staff |
Personal Service | Wear clothes | Fashion
Friends What Likes |
Fashion
Friends What Likes |
| Segment B
Online |
|||||||
| Identify value | Create value | Look for value | Choose value | Get value | Use value | Evaluate value | Sustain |
| Need for clothes | Look at what likes
Friends Fashion |
(Online Stores)
Choice Speed |
Look
Price Returns Policy Reviews Website Feel Designer Name |
Online Stores
Quick Delivery |
Wear clothes | What Likes
Friends Fashion |
What Likes
Friends Fashion |
Figure 9.8 Consumer Value Lines for 2 segments
As you can see the actual value in the solution itself – designer clothes – is exactly the same, but the most important Value Factors are vastly different for both segments. Segment A, is far more suited to retail stores, whereas segment B to online luxury stores.
How well do the current Industry/Product Value Lines in operation meet
- Segments Consumer Value Lines compared to current solutions?
- Segments Consumer Value Lines compared to ideal solutions?
- The companies ideal solution for Consumer Value Lines, surpassing segments ideal solutions?
- A selection of various ideas from all of the above?
- How close can we get to the Ultimate Solution?
The innovation may come in the value itself, but commonly huge innovations can also be made in how consumers look for value (Google, Vista Print, Glide), choose value (moneysupermarket.com, Virgin, Apple, Amazon), get value (IKEA, Dell), and use value. (Apple, Nordstrom). Many of these innovations can of course exist at the same time, and often the biggest innovations drastically change the Product Value Line along many dimensions. In other words, innovation can be the morphing and development of many ideas, and may not be just one brilliant idea! An example is how IKEA brought almost the entire Value Line under one roof – giving customers more choice, quicker delivery and better products for less. It changed the entire consumer experience.
An important point to note, when it comes to thinking up an ideal solution from within the company for the Consumer Value Line, it’s not about deciding to tailor the Product Value Line in ways that meets the Consumer Value Line best for you as a company – but for the actual consumer themselves. If you think “Yes, we can sell directly to consumers and save them 25% – they’ll love that” you’re thinking in the wrong way. Consumers might want to save 25%, but they also might want choice, impartial advice, trusted retail brand names, so on and so forth. So, when thinking of innovation for the Consumer Value Line, just as with the solution itself, you must focus on the jobs and outcomes and the Opportunity Scores your research has revealed. Value is not value unless consumers think it is.
If you look at this from the company’s side you can see several types of innovation in the Product Value Line to better match the Consumer Value Line -
For example
- Value Creation innovation – Making a new product – e.g. email – that performs the job better – or doing a job that could not be done before e.g. The Sten – a product that helped keep the arteries unblocked.
- Value Communication innovation – Any innovation where you can change how you communicate your value or who communicates your value – Glide was a floss marketed directly to dentists rather than to the consumer due to budget constraints – 18 months later it was the best selling in the USA!
- Value Delivery innovation – Any idea where you can change how the value is delivered – for example travelling dentists, next day delivery furniture, software companies delivering directly. Look for areas where people have to spend time waiting, expend effort, travel to do something or pay middlemen.
- Value Support innovation – Any idea that enhances the use of the value delivered.
A series of internal Operational Innovations in the Value Creators will often take place here behind the scenes. There is also disruptive innovation – this is where technology exists and a need for it in the market is sought. This is the opposite way round from the usual type of innovations which place the consumer first. In other words, it is technology seeking jobs and outcomes that it could better fulfil.
Some things to watch out for because they can harm value innovation –
- Ill conceived growth strategies
- Faulty data collection
- Ideal solutions that suit the company not the consumer
- Missed opportunities
- Poor market segmentation
- Wrong growth targets
- Unfocused marketing, messaging and branding
- Poorly prioritised development initiatives
- Scattershot idea generation
- Value Line innovation that suits the company not the consumer
Let’s now look at how we come up with ideas.
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