January 1, 2010

BE DiFFERENT Marketing - Think Value Additive

Developing and marketing PRODUCTS is the way most companies compete today. Nothing wrong with that. But it’s not DiFFERENT. And it’s hard to find a unique niche where your competitors won’t find you. Product competition is always challenged with how to provide features others don’t. It’s a tough road, as the RIM Blackberry smartphone is discovering. Numerous competitors are now offering their own version of the smartphone with features they hope will gain them market share.

In my book, I advocate a Customerize Marketing discipline, rather than the traditional product-centric approach where the focus is on creating value-based holistic Offers that reflect a broad view of the target customer in terms of needs, wants and desires.

The key question is, of course, how do you move to the Offer creation mode when you have been stuck in the product-only gear for so long?

Here is the Value Additive Process.

First, start with your core product. It will be the anchor for your Offer.

Second, identify additional VALUE components that can be ‘wrapped around’ your core product. The choice of what value to add is based on what you know about your target customers. This is where Customer Learning pays off. If you have institutionalized the process of continuous customer learning, you will find the choice of what value to add relatively easy. Added value MUST reflect a relevant and compelling customer need or desire otherwise the Offer will not resonate with the customer at all .

Resist the temptation to add too many value components. Don’t complicate the Offer. Choose three additional value layers (Roy’s Rule of 3 remember?) that present a consistent and seamless value proposition to the customer and a ‘natural’ add-on to your core product. If the value components are not synergistc and don’t ‘work well’ together, your target customer group won’t understand and ‘get’ the overall benefits your Offer provides. Not a good place to be.

Choosing synergistic value components is critical in Offer creation in order to present a cohesive theme to the customer. If you are in the financial business, for example, with an anchor product of ‘financial advice’, you might consider value additive components such as on-line self management investment tracking tools and quarterly financial management seminars which all play well together rather than choosing components that have no direct relationship with one another and with the anchor product (wrapping a ski weekend in Whistler, for example around financial advice may not work so well).

Third, define the value proposition, or statement of benefit for your Offer. I am not talking about a statement that simply adds together the benefits of each Offer component. You need to describe the benefit impact of all components working together. In my example above, how might you define the collective benefits of financial advice, on-line tracking tools and regular seminars? You need to express the theme they collectively express. How about something like ‘investment self-management’? Not perfect but you get the idea.

Fourth, you need to brand your Offer reflecting the value proposition. There is no sense creating something new and not taking credit for your innovation. Too many organizations are into the bundling mentality where a la carte component packaging with discount pricing is used. That’s NOT what I advocate. Your new brand should reflect the collection of benefits provided. In the example that we have been using how about branding the Offer ‘The self-management Investment Plan’? Not bad.

Fifth, price your Offer in terms of the market value provided.Think Premium pricing. Avoid the bundling mentality of discounting the package based on the number of components in it. If you have hit the mark with relevant, compelling VALUE you should be able to command a premium price and realize healthy margins. If you can’t price your Offer at a high level I would suggest you have not defined the Offer well enough. Go back to the drawing board. Start over.

Cheers,
Roy Osing
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Related blogs
Roy’s Rule of 3
Apple vs RIM
Marketing is in the VALUE CREATION Business
Premium Price Value Offers
Create Holistic Offers
Customerize your Marketing
Customer Learning

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Posted 1.1.10 at 09:18 am by Roy Osing | Read Comments (1) | Leave a Comment