The Answer: When everyone else in their industry has adopted them ..
The Axion: Using The Technology Adoption Lifecycle terminology, the Early Adopters and Innovators are those to benefit greatest from new technologies. They benefit from what is referred to as first-movers' advantage. The quicker the adoption the greater the benefits.
Early adoption to a new technology will initially increase profit margins. As adoption moves across the curve to the Late Majority
- Competition on the same level brought on by the new technology increases
- Unique Value diminishes
- Profits Erode
The Irony: By introducing a new technology advance it is initially the adopting producers which benefits, but over time as competitors in the industry also increase adoption the ultimate benificiaries are the consumers.
The Examples:
Bovine Hormones
US cow farmers quick to adopt bovine hormone to increase milk production benefitted from 20% greater yields at the same cost.
Overtime their competitors adopted the same bovine hormone - often for cheaper as increased sales volumes & recouped R&D costs reduces the extent of margin required - and competition drove prices steadily downward.
E-mail
The first companies to adopted benefited from faster communication, higher productivity and reduced communication costs.
As subsequent companies adopted this technology their first-movers' advantage was nullified.
The outcome was that all companies simply had to operate at a greater pace for essentially the same profit margin.
When adoption reaches saturation, competitive advantage is neutralised for all as it becomes the new default, the de-facto standard expected by consumers.
Sunday 21 September 2008
Saturday 20 September 2008
What considerations determine the design of products?
In order to understand the decisioning behind the design of a product you must look at three factors - The CUT Principle:
- COSTS - How can we minimise costs?
- USAGE - What are we trying to achieve with it? How can we optomise usage?
- TRADITIONS - How can we minimise the disruption of the innovation?
Often its a combination of these factors.
Usage Example:
- Cups developed handles based on usage. Initially they were simply mini tin canisters. Over-time based on feedback from usage the design changed.
- Tennis rackets were originally wooden because that was the most abundant cost effective resource at the time. Over time the heavy weighted racket was replaced with lighter metals. The strings were tightened to give extra force and the handles were modified to optomise grip.
Cost Example:
- Coins that contain potraits always display only a side profile. This is because less complexity and time is required to generate a side profile versus a full-face profile. This thus reduces the cost. On paper notes we can achieve this more easily plus it also acts as a detterant for counter-fitters.
Tradition Example:
- Women's clothes button from the left unlike mens because during the middle-ages women who wore blouses tended to have servants who dressed them. From the servants position it was easier for the servant to dress them when the clothes were buttoned from the left.
Possible Exceptions:
Despite the fact that cost would be greatly reduced if beverage cans were rectangular as opposed to cylindrical - more containers could fit on the shelf, be transported, be more easily produced - the usage factor overrides the cost factor. It is a lot easier and more comfortable to hold and drink from a cylindrical container than from a rectangular cannister.
- COSTS - How can we minimise costs?
- USAGE - What are we trying to achieve with it? How can we optomise usage?
- TRADITIONS - How can we minimise the disruption of the innovation?
Often its a combination of these factors.
Usage Example:
- Cups developed handles based on usage. Initially they were simply mini tin canisters. Over-time based on feedback from usage the design changed.
- Tennis rackets were originally wooden because that was the most abundant cost effective resource at the time. Over time the heavy weighted racket was replaced with lighter metals. The strings were tightened to give extra force and the handles were modified to optomise grip.
Cost Example:
- Coins that contain potraits always display only a side profile. This is because less complexity and time is required to generate a side profile versus a full-face profile. This thus reduces the cost. On paper notes we can achieve this more easily plus it also acts as a detterant for counter-fitters.
Tradition Example:
- Women's clothes button from the left unlike mens because during the middle-ages women who wore blouses tended to have servants who dressed them. From the servants position it was easier for the servant to dress them when the clothes were buttoned from the left.
Possible Exceptions:
Despite the fact that cost would be greatly reduced if beverage cans were rectangular as opposed to cylindrical - more containers could fit on the shelf, be transported, be more easily produced - the usage factor overrides the cost factor. It is a lot easier and more comfortable to hold and drink from a cylindrical container than from a rectangular cannister.
Wednesday 17 September 2008
How can I leave an impact in a conversation?
We have conversations with peers, friends and clients each day. This interaction gives us an ideal opportunity to increase the stocks of our "personal brand", to leave a positive impression for them to relay, to leave an impact. Here are some tips I have garnered:
Use Descriptive Language - the more tongue in cheek the better
Use metaphors, similes and analogies to describe concepts.
- It is a tenous plan - It doesn't hold water
- Using the wrong approach - Using a screwdriver to hammer a nail
- It is the same - It's six of one and half a dozen of the other
- Encourage - add fuel to the fire
Use Examples
Use the phrase "I CAN GIVE YOU AN EXAMPLE.." or "LET ME GIVE YOU AN EXAMPLE.."
Followed by a concrete easy to grasp example.
Smile :)
This makes others comfortable and thus encourages them to share more.
This also increases your likability which is key to getting your point across.
Always Playback
This encourages you to listen attentively and capture all key points.
This shows the listeners that you care and builds rapport.
So, what you are saying is ..
So, let me just playback what we have discussed ..
So, let me see if I have captured this correctly ..
Would I be right in saying ..
Articulate fully & fluctuate tone + strategic pause
Listen to all the great speakers - Bill Clinton, Obama, Churchill, Blair - They all articulate their words fully and fluctuate their tone. They use strategic pauses to capture listener's attention.
Conversely, think of your most boring lecturer, didn't they speak with a monotone voice!?
Ask Questions
Show you are interested by asking questions. Also, it keeps you focused by knowing you have to ask questions.
Use gestures to show you agree, understand and are interested:
Use Descriptive Language - the more tongue in cheek the better
Use metaphors, similes and analogies to describe concepts.
- It is a tenous plan - It doesn't hold water
- Using the wrong approach - Using a screwdriver to hammer a nail
- It is the same - It's six of one and half a dozen of the other
- Encourage - add fuel to the fire
Use Examples
Use the phrase "I CAN GIVE YOU AN EXAMPLE.." or "LET ME GIVE YOU AN EXAMPLE.."
Followed by a concrete easy to grasp example.
Smile :)
This makes others comfortable and thus encourages them to share more.
This also increases your likability which is key to getting your point across.
Always Playback
This encourages you to listen attentively and capture all key points.
This shows the listeners that you care and builds rapport.
So, what you are saying is ..
So, let me just playback what we have discussed ..
So, let me see if I have captured this correctly ..
Would I be right in saying ..
Articulate fully & fluctuate tone + strategic pause
Listen to all the great speakers - Bill Clinton, Obama, Churchill, Blair - They all articulate their words fully and fluctuate their tone. They use strategic pauses to capture listener's attention.
Conversely, think of your most boring lecturer, didn't they speak with a monotone voice!?
Ask Questions
Show you are interested by asking questions. Also, it keeps you focused by knowing you have to ask questions.
- Why is that?
- What are your ideas /opinions /thoughts) on _________?
- What did you mean when you said __________?
- Why is that important/ essential/ relevant in your opinion?
- How does that look /feel/ seem to you?
- What are some examples of _________?
- What’s your definition of __________?
- Can you elaborate on _________?
- What does _________ mean for you?
Use gestures to show you agree, understand and are interested:
- Right, OK, Yes, Sure, I agree, That is true, Oh really, I see, That is interesting,..
- Could you possibly illustrate with an example, explain further,..
How do be more confident when speaking- just ask Obama?
1. You confront a sales meeting.
2. You instantly become timid.
3. You suck.
"So what do I do?!"
Try this:
1. Think of Barak Obama.
2. You = Obama.
In his book, dreams of my father, Obama explains that from a young age his mother had told him how his father was of royalty in kenya. Before every action Obama subsequently performed he would ask himself - What would a Prince, soon to be King, do in this situation.
This gives Obam his air of confidence and majesty.
Done.
Imagining yourself as someone else's persona helps you adopt that person's persona.
You start asking:
* What would Brad Pitt do in this situation?
* How would Brad Pitt respond in this situation?
* How would Brad Pitt talk to this person?
Magically, you start:
1. standing up straighter
2. having more conviction in your voice
3. doing stuff you wouldn't have done minutes ago
Productively-Confident You.
And if something undesirable happens to you, you experience this gem:
1. "I didn't get rejected."
2. "Brad Pitt got rejected."
Result: You take more risks that propel you forward on your freakish journey of total domination.
2. You instantly become timid.
3. You suck.
"So what do I do?!"
Try this:
1. Think of Barak Obama.
2. You = Obama.
In his book, dreams of my father, Obama explains that from a young age his mother had told him how his father was of royalty in kenya. Before every action Obama subsequently performed he would ask himself - What would a Prince, soon to be King, do in this situation.
This gives Obam his air of confidence and majesty.
Done.
Imagining yourself as someone else's persona helps you adopt that person's persona.
You start asking:
* What would Brad Pitt do in this situation?
* How would Brad Pitt respond in this situation?
* How would Brad Pitt talk to this person?
Magically, you start:
1. standing up straighter
2. having more conviction in your voice
3. doing stuff you wouldn't have done minutes ago
Productively-Confident You.
And if something undesirable happens to you, you experience this gem:
1. "I didn't get rejected."
2. "Brad Pitt got rejected."
Result: You take more risks that propel you forward on your freakish journey of total domination.
How can I get more done in less time?
The Gem to Get Productive
First, do this:
1. Take out a stopwatch. Start it.
2. Work for XX-minutes straight (e.g., 60 minutes).
3. Stop the stopwatch. Relax.
4. Return to #1.
Do that throughout the day.
Rules:
1. When the clock runs, you have to work.
2. When the clock stops, you can stop working.
(It's like you're clockin-in and clocking-out of work. HOORAY!)
Why You're More Productive
When you do something -- anything -- with the clock running, you force yourself to work.
* No distractions (or you clock-out).
Phenomenon:
1. Simply forcing yourself to work as if a tidy-whitey baby-bunny has a gun to your sternum if you don't work a gets you doing something.
2. The little "something" gradually builds your productivity momentum to get more things accomplished.
That enforcement to-work-or-bunny-offs-you gets you thinking:
1. "I can work like a bored-unproductive piece of shizzit."
2. "OR, I can work like one happily-productive mofokoko."
Unless your momma dropped you down the elevator shaft when you were two-months old (because you = ugly), chances are, you'll choose the latter:
* "I have to work. I might as well have fun and get things done!"
More fun = More productive = More tasks accomplished.
Now, Beat Your Records
Example:
1. "Yesterday, I accomplished 100 minutes of good work by 11 pm!"
2. "Today, I will accomplish 100 minutes of work by 10:30 pm!"
Or:
1. "Last week, I completed 1500 minutes of work!"
2. "This week, I'll go for 2000 minutes of work! WHO'S THE MAN?!"
You start taking the deliberative approach to improve your daily productivity (e.g., "Let's save time by not checking NYTimes this morning!") -- constantly looking for different ways to improve how efficient you work.
Result: Freakishly more work done everyday.
First, do this:
1. Take out a stopwatch. Start it.
2. Work for XX-minutes straight (e.g., 60 minutes).
3. Stop the stopwatch. Relax.
4. Return to #1.
Do that throughout the day.
Rules:
1. When the clock runs, you have to work.
2. When the clock stops, you can stop working.
(It's like you're clockin-in and clocking-out of work. HOORAY!)
Why You're More Productive
When you do something -- anything -- with the clock running, you force yourself to work.
* No distractions (or you clock-out).
Phenomenon:
1. Simply forcing yourself to work as if a tidy-whitey baby-bunny has a gun to your sternum if you don't work a gets you doing something.
2. The little "something" gradually builds your productivity momentum to get more things accomplished.
That enforcement to-work-or-bunny-offs-you gets you thinking:
1. "I can work like a bored-unproductive piece of shizzit."
2. "OR, I can work like one happily-productive mofokoko."
Unless your momma dropped you down the elevator shaft when you were two-months old (because you = ugly), chances are, you'll choose the latter:
* "I have to work. I might as well have fun and get things done!"
More fun = More productive = More tasks accomplished.
Now, Beat Your Records
Example:
1. "Yesterday, I accomplished 100 minutes of good work by 11 pm!"
2. "Today, I will accomplish 100 minutes of work by 10:30 pm!"
Or:
1. "Last week, I completed 1500 minutes of work!"
2. "This week, I'll go for 2000 minutes of work! WHO'S THE MAN?!"
You start taking the deliberative approach to improve your daily productivity (e.g., "Let's save time by not checking NYTimes this morning!") -- constantly looking for different ways to improve how efficient you work.
Result: Freakishly more work done everyday.
Why don't better products win hands-down?
Why "Better" Products Don't Sell
Posted August 02, 2006 in Innovation, Sales & Marketing, 4 Comments »
*
"We'll build a better product. We'll win, easily."
*
"We have so many more features than the competition. We'll win easily."
*
"Our product has an extra __. Dude, we'll so win easily."
*
"Let's choose our Porsches!"
Not quite, our beloved amigos.
Most entrepreneurs tout their better features. The theory goes: "If my product has more features, that means I have a better product. Then, people will buy my product instead."
Who can fault them? The so-called business experts encourage them: "Get your competitive advantage. Get better capabilities. If they have one widget, have two," they say.
Sure that's common sense talking: people buy products that are feature-rich, right?
But, folks: common sense is wrong.
People don't buy "better" products.
People don't buy rationally.
People buy emotionally. Then, they try to rationalize their purchases.
See: The Feature-Rich Zen Vs. the Stylish iPod
The Creative Zen murders the iPod in features and cost: bigger hard drive, FM radio, voice recorder, among others.
But, the iPod offers something the Zen doesn't: an emotional connection.
Zen sells features. iPod sells style.
People buy on emotions, says the fabulous research.
Building on research on the mind, Harvard Business School Professor Gerald Zaltman states that 95% of our purchasing decisions happen in our subconscious:
What we really think is largely hidden from us. In other words, most of what we know we don�t know we know. Probably 95% of all cognition, all the thinking that drives our decisions and behaviors, occurs unconsciously�and that includes consumer decisions. That�s not to say that the 5% we�re privy to is unimportant�just that marketers overemphasize its importance, because it�s so visible and easy to access.
Bob: "I bought a Mercedes. It has better stuff."
Sure, it probably does have better capabilities; but, like most non-car buffs, Bob bought his sweet ride based on emotions. He bought status.
Then, he tried to rationalize his purchase with choosing "better capabilities."
How to sell your new product
If you want to sell your new product, touting features won't compel your customer to buy your product. You're targeting the customer's rational side --- when the irrational side does 95% of the talking.
What do you do then?
Forget selling features.
Sell status. Sell luxury. Sell solutions. Sell hope. Sell inspiration.
Sell dreams.
(Gosh, we're feeling cheesy today. Apologies.)
Posted August 02, 2006 in Innovation, Sales & Marketing, 4 Comments »
*
"We'll build a better product. We'll win, easily."
*
"We have so many more features than the competition. We'll win easily."
*
"Our product has an extra __. Dude, we'll so win easily."
*
"Let's choose our Porsches!"
Not quite, our beloved amigos.
Most entrepreneurs tout their better features. The theory goes: "If my product has more features, that means I have a better product. Then, people will buy my product instead."
Who can fault them? The so-called business experts encourage them: "Get your competitive advantage. Get better capabilities. If they have one widget, have two," they say.
Sure that's common sense talking: people buy products that are feature-rich, right?
But, folks: common sense is wrong.
People don't buy "better" products.
People don't buy rationally.
People buy emotionally. Then, they try to rationalize their purchases.
See: The Feature-Rich Zen Vs. the Stylish iPod
The Creative Zen murders the iPod in features and cost: bigger hard drive, FM radio, voice recorder, among others.
But, the iPod offers something the Zen doesn't: an emotional connection.
Zen sells features. iPod sells style.
People buy on emotions, says the fabulous research.
Building on research on the mind, Harvard Business School Professor Gerald Zaltman states that 95% of our purchasing decisions happen in our subconscious:
What we really think is largely hidden from us. In other words, most of what we know we don�t know we know. Probably 95% of all cognition, all the thinking that drives our decisions and behaviors, occurs unconsciously�and that includes consumer decisions. That�s not to say that the 5% we�re privy to is unimportant�just that marketers overemphasize its importance, because it�s so visible and easy to access.
Bob: "I bought a Mercedes. It has better stuff."
Sure, it probably does have better capabilities; but, like most non-car buffs, Bob bought his sweet ride based on emotions. He bought status.
Then, he tried to rationalize his purchase with choosing "better capabilities."
How to sell your new product
If you want to sell your new product, touting features won't compel your customer to buy your product. You're targeting the customer's rational side --- when the irrational side does 95% of the talking.
What do you do then?
Forget selling features.
Sell status. Sell luxury. Sell solutions. Sell hope. Sell inspiration.
Sell dreams.
(Gosh, we're feeling cheesy today. Apologies.)
How can I leave an impression in meetings?
Know the Questions:
Know the questions you need to ask before you go into the meeting. This will ensure you prime yourself to listen. It will ensure you appear fully engaged as an active participant.
Know the Wit:
Know the witty lines you can possible use in the meeting to put everyone at ease and show you are not all business.
Playback:
Use the playback mechanism to repeat everything you have heard.
"I want to ensure that I have captured this correctly, let me play it back for you .."
"So, if I understand it correctly .."
"Let me play it back to ensure I fully grasped it .."
a) Forces you to listen
B) Shows the speaker you care and understand
c) You appear smart
Encourage Dialogue:
"Before we start, when I mention _____ what words come to mind?"
"Tell me more about ____"
"So if we have not yet formalised what steps we need to perform to ensure success, let me make it easier by turning it on its head...so, what steps/lack there of would reduce success?"
Identify the WoW Factor:
What phrase, idea, methodology, slide, question, comment is going to leave them with that WoW - "impressive" - Factor.
End with Actions:
"So, in terms of actions and next steps.. "
Know the questions you need to ask before you go into the meeting. This will ensure you prime yourself to listen. It will ensure you appear fully engaged as an active participant.
Know the Wit:
Know the witty lines you can possible use in the meeting to put everyone at ease and show you are not all business.
Playback:
Use the playback mechanism to repeat everything you have heard.
"I want to ensure that I have captured this correctly, let me play it back for you .."
"So, if I understand it correctly .."
"Let me play it back to ensure I fully grasped it .."
a) Forces you to listen
B) Shows the speaker you care and understand
c) You appear smart
Encourage Dialogue:
"Before we start, when I mention _____ what words come to mind?"
"Tell me more about ____"
"So if we have not yet formalised what steps we need to perform to ensure success, let me make it easier by turning it on its head...so, what steps/lack there of would reduce success?"
Identify the WoW Factor:
What phrase, idea, methodology, slide, question, comment is going to leave them with that WoW - "impressive" - Factor.
End with Actions:
"So, in terms of actions and next steps.. "
Sunday 7 September 2008
How can I innovate when my product is being commoditised? - The Utility Buyer Map
The commoditisation problem:
If an idea is good and profitable you can bet your children that others will enter your market and start competing for sales. More often that not these entrants will compete on price, putting pressure on your business by driving down the cost.
This is what we refer to as commoditisation. That is, the change from monopolistic to perfect
competition and the change from distinguishable to standardised.
Examples of commoditisation include: electricity, air travel, telecoms.
Why do we need to innovate?
In business, any innovation is a potential source of competitive advantage. If it proves succesful competitors will try to emulate and copy it.
There is a constant pressure towards commoditisation of any successful innovation as everyone tries to take advantage of it.
What can we do to avoid getting caught up in the commoditisation spiral?
The matrix below shows us the abundance of phases where we can innovate accross each stage of the customer-experience.
The Six Stages of the buyer experience cycle (x-axis)
[Please Deliver Unless Some Man Dies]
A customer experience can usually be broken down into a cycle of six distinct stages, from purchase to disposal.
Each stage encompasses a variety of specific experiences. E.g. Purchasing includes the experiences of browsing amazon.com as well as the experience of pushing a physical shopping cart through Tescos.
In order to guage the quality of the buyer's experience at each stage:
A customer's product experience passes through six stages.
To help companies assess the quality of a buyer's total experience, their are key questions for each stage.
Together they uncover the full picture of the experience cycle.
The Six Utility Levers (y-axis)
[Please Start Changing Rate Instead of Experience]
The ways in which companies unlock utility for their customers.
The most common lever used is customer productivity - helping customers do things faster, better or in easier ways.
E.g. , the financial company Bloomberg makes traders more efficent by offering online analytics that quickly analyses and compare the raw information it delivers.
By placing a new product on one of the 36 spaces of the Buyer Utility map, one can quickly see if/how the new idea creates a different utility proposition from existing products.
Innovation, using the map can be achieved via:
New utility lever at the same stage:
Starbucks - revolutionised the office-workers' coffee break traditionally coffee in delis or fast-food places , competitors offered fast + cheap coffee - in terms of the map those competitors focused on delivering productivity in the purchasing experience.
Starbucks however moved into a new space entirely, by establishing a chic coffee bars with an exotic mix of brews, the company injected fun and cachet into the coffee purchasing experience. They inovvated in the fun & image/purchase space.
(They also offered convenience & comfort in the delivery.)
Same utility lever at a new stage:
Innovation through extending a familiarity utility to differnt parts of the customers' experience.
Michael Dell did just this in the computer business. Manufacturers used to compete by offering faster computers with more features and software.
In terms of the map this was productivity in the use of their machines. Dell extended the same utility to the delivery experience. By bypassing dealers, Dell delivers PCs tailored to customers' needs faster than any other manufacturer. Aswell as the costs saved by removing this link in the value chain.
New utility at a a new stage:
Something completely new, e.g. Alto, a disposable fluorescent bulb manufacturered by Phillips. Most bulb manufacturers competed to offer customers more productivity in use, they did not pay attention to the fact that the bulbs had to be carried off to a special dump because of their harmful mercury content.
By creating a bulb that could be disposed of environmentally friendally they moved into a whole new space. Env. friendliness in disposal. In its first year alone it poached 25% of the US market while enjoying supperior margins.
Apple's ipod focussed on Fun & Image at a new stage, durng use. They alsoe focused on usability simplicity when other manufacturers were innovating around price, storage and quality of music to the point of diminishing returns.
Beyond highlighting the difference between ideas that are genuine innovations and those that are essentially revisions of existing offerings, the buyer utility map reminds one just how many unexplored innovation possibilities there are.
Example of an innovative company that created exceptional utility:
Charles Schwab was a discount broker.Schwab's first innovation was to make customers feel safe trading over the phone and later online. At the time when most brokers were competing on price, Schwab recognised that customers were actually more concerned about the safe executions of their trades. By providing instantaneous computer confirmation the perceived risk is eliminated.
Schwab then went on to make purchasing more convenient. Most discount brokers were only open during normal office hours when most of their customers weren't free. Schwab offered 24hr 7 day a week service and a Schwab one cash management a/c avoiding the inconvenient bank hours.
The next innovation came in the simplicity and maintenance space. It saw how difficult it was for customers to track and manage their mutual fund investments. Customers would typically receive statements from each of the fund companies they dealt with. They would be burdened by sticking it all together to get a better picture of performance. Schwab launched One Source a consolodated statement of all mutual investments purchased through Schwab.
Whether or not Schwab continus to lead will be dependent in great part on their ability to sniff out new utility spaces before competitors do.
On what spaces does your company lie? Where could they move to?
If an idea is good and profitable you can bet your children that others will enter your market and start competing for sales. More often that not these entrants will compete on price, putting pressure on your business by driving down the cost.
This is what we refer to as commoditisation. That is, the change from monopolistic to perfect
competition and the change from distinguishable to standardised.
Examples of commoditisation include: electricity, air travel, telecoms.
Why do we need to innovate?
In business, any innovation is a potential source of competitive advantage. If it proves succesful competitors will try to emulate and copy it.
There is a constant pressure towards commoditisation of any successful innovation as everyone tries to take advantage of it.
What can we do to avoid getting caught up in the commoditisation spiral?
The matrix below shows us the abundance of phases where we can innovate accross each stage of the customer-experience.
The Six Stages of the buyer experience cycle (x-axis)
[Please Deliver Unless Some Man Dies]
A customer experience can usually be broken down into a cycle of six distinct stages, from purchase to disposal.
Each stage encompasses a variety of specific experiences. E.g. Purchasing includes the experiences of browsing amazon.com as well as the experience of pushing a physical shopping cart through Tescos.
In order to guage the quality of the buyer's experience at each stage:
A customer's product experience passes through six stages.To help companies assess the quality of a buyer's total experience, their are key questions for each stage.
Together they uncover the full picture of the experience cycle.
The Six Utility Levers (y-axis)
[Please Start Changing Rate Instead of Experience]
The ways in which companies unlock utility for their customers.
The most common lever used is customer productivity - helping customers do things faster, better or in easier ways.
E.g. , the financial company Bloomberg makes traders more efficent by offering online analytics that quickly analyses and compare the raw information it delivers.
By placing a new product on one of the 36 spaces of the Buyer Utility map, one can quickly see if/how the new idea creates a different utility proposition from existing products.
Innovation, using the map can be achieved via:
| UTILITY LEVER | CUSTOMER-EXPREIENCE STAGE |
| New | New |
| Same | New |
| New | Same |
New utility lever at the same stage:
Starbucks - revolutionised the office-workers' coffee break traditionally coffee in delis or fast-food places , competitors offered fast + cheap coffee - in terms of the map those competitors focused on delivering productivity in the purchasing experience.
Starbucks however moved into a new space entirely, by establishing a chic coffee bars with an exotic mix of brews, the company injected fun and cachet into the coffee purchasing experience. They inovvated in the fun & image/purchase space.
(They also offered convenience & comfort in the delivery.)
Same utility lever at a new stage:
Innovation through extending a familiarity utility to differnt parts of the customers' experience.
Michael Dell did just this in the computer business. Manufacturers used to compete by offering faster computers with more features and software.
In terms of the map this was productivity in the use of their machines. Dell extended the same utility to the delivery experience. By bypassing dealers, Dell delivers PCs tailored to customers' needs faster than any other manufacturer. Aswell as the costs saved by removing this link in the value chain.
New utility at a a new stage:
Something completely new, e.g. Alto, a disposable fluorescent bulb manufacturered by Phillips. Most bulb manufacturers competed to offer customers more productivity in use, they did not pay attention to the fact that the bulbs had to be carried off to a special dump because of their harmful mercury content.
By creating a bulb that could be disposed of environmentally friendally they moved into a whole new space. Env. friendliness in disposal. In its first year alone it poached 25% of the US market while enjoying supperior margins.
Apple's ipod focussed on Fun & Image at a new stage, durng use. They alsoe focused on usability simplicity when other manufacturers were innovating around price, storage and quality of music to the point of diminishing returns.
Beyond highlighting the difference between ideas that are genuine innovations and those that are essentially revisions of existing offerings, the buyer utility map reminds one just how many unexplored innovation possibilities there are.
Example of an innovative company that created exceptional utility:
Charles Schwab was a discount broker.Schwab's first innovation was to make customers feel safe trading over the phone and later online. At the time when most brokers were competing on price, Schwab recognised that customers were actually more concerned about the safe executions of their trades. By providing instantaneous computer confirmation the perceived risk is eliminated.
Schwab then went on to make purchasing more convenient. Most discount brokers were only open during normal office hours when most of their customers weren't free. Schwab offered 24hr 7 day a week service and a Schwab one cash management a/c avoiding the inconvenient bank hours.
The next innovation came in the simplicity and maintenance space. It saw how difficult it was for customers to track and manage their mutual fund investments. Customers would typically receive statements from each of the fund companies they dealt with. They would be burdened by sticking it all together to get a better picture of performance. Schwab launched One Source a consolodated statement of all mutual investments purchased through Schwab.
Whether or not Schwab continus to lead will be dependent in great part on their ability to sniff out new utility spaces before competitors do.
On what spaces does your company lie? Where could they move to?
Friday 5 September 2008
How do I write effective emails ?..
If you work in an office for a large organisation irrespective of your role you will find that you spend the majority of your time writing emails. This is a key exposure point for proving your value in the organisation. In order to have an impact with emails:
1) Alaways add-vale:
e.g. Rather than telling a colleague that a competing product exists ADD VALUE BY copying a link to that competing products image/site/SWOT etc..
e.g. Rather than agreeing to have a meeting ADD VALUE by suggesting possible times
2) Always add Structure:
Use headings such as Why? Who? What? When? Where? Benefits, Overview, Summary, Key Learnings to add structure to an email.
3) Use descriptve language:
Use words like
Kick-off rather than Start
Off the ground rather than begin
Uphill rather than Difficult
1) Alaways add-vale:
e.g. Rather than telling a colleague that a competing product exists ADD VALUE BY copying a link to that competing products image/site/SWOT etc..
e.g. Rather than agreeing to have a meeting ADD VALUE by suggesting possible times
2) Always add Structure:
Use headings such as Why? Who? What? When? Where? Benefits, Overview, Summary, Key Learnings to add structure to an email.
3) Use descriptve language:
Use words like
Kick-off rather than Start
Off the ground rather than begin
Uphill rather than Difficult
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