Who's the user of your product or service?
Where's your product or service aimed at?
Who decides on purchasing your product or service?
The answer to the above questions is "your customer".
And "your customer" can be each element in your ecosystem, from a private customer, an employee of to the organization itself.
The key is to convert customer insights in meaningfull innovation.
1. CUSTOMERS FIRST
another look at value innovation
Andries Reymer
Business innovation coach
kmo-connect beurs,
Lotto Arena
2. Master in Product Development
University of Antwerp
2006
Since 2016 at AMS as Business Innovation Coach.
I assist companies in broad innovation trajectories.
Currently working on a ’Value Based’ project.
Previously worked for KOMONO, PHILIPS, SIRRIS.
4. Answer some of the most difficult questions facing managers:
•How does one design global operations so they are at once effective
and equitable?
•How does one can stay focused on the customer and navigate through
a myriad of ways to connect, engage and communicate with customers.
•What is the purpose of a corporation beyond the creation of
shareholder value?
•….
What we do: applied research
8. Compentence blindness
Company experts tend to focus on features of products that are interesting for
them, but not always for customers. By doing so, they can miss the next big
thing that will disrupt their business.
9. Commoditized customers
Going from commoditized customers, only focussed on price towards engaged
customers chosing a product or service based on the value it brings for them.
11. Methods Brief Explanation
Observation
The researcher gets close enough to study objects to observe
(with/without participation) usually to understand whether people do
what they say they do, and to access tacit knowledge of subjects
Interview
This involves asking questions, listening to and recording answers
from an individual or group on a structured, semi-structured or
unstructured format in an in-depth manner
Focus Group
Discussion
Focused (guided by a set of questions) and interactive session with a
group small enough for everyone to have chance to talk and large
enough to provide diversity of opinions
Other Methods
Rapid assessment procedure (RAP), free listing, photo ethnography,
diary, visual anthropology, pile sort, ranking, life history (biography)
…
12. can give you insight in what people
do or think but won’t tell you about.
Because, qualitative user research
14. Context
Water is worth a lot
if you’re stuck in the
desert for some days.
When your basementWhen your basement
is flooded you wantis flooded you want
to pay to get rid ofto pay to get rid of
the water.the water.
In the supermarketIn the supermarket
where water iswhere water is
abundant, you’reabundant, you’re
choice is deliberate.choice is deliberate.
19. 80% of innovations fail
Most innovations fail because their creators are “Putting
the ‘wow’ before the ‘why'”
Mark Payne. Cofounder, Fahrenheit 212
25. Customer value
The only base to formulate your price in this flow is
your product and the cost it represents.
The value and the reaction of the customer is only a
consequense of this price.
27. Cost plus
Changing costs
Changing forecast? 100k -> 50k
Obsolete stock?
Bad engineering?
Changing exchange rates?
Declining value
Discounts for over stock?
No innovation -> commodity?
28. Competition based
Predictability competition
What do you know from competitors?
Do you know their roadmap?
Is their direction the right one?
Action -> reaction!
Price war
No differentiation -> commodity?
Race to the bottom -> price pressure!
29. Customer value
In a reversed flow you have insights from your
customers needs and the elements your customer
values. This gives you insight in their willingness to
pay what gives you a good angle towards your
pricing.
34. We developed a scan
to position yourself
in this grid as an
indication on your
price setting and price
getting capabilities.
Price realization
Business value
36. Project Valerie
The project starts by building buying personas, mapping the stakeholders,
discovering insights with your customers up to price and sales learnings.
A new methodology is developed to create value step by step.
37. VALUE BASED INNOVATION
1. VALUE DETECTION
2. VALUE CREATION
3. VALUE CAPTUREProject Valerie
The methodology is based on 3 phases: value detection, creation and capture.
And on 3 business elements: product, service and brand.
38. 1,99€
Launch of new private
label yoghurt with initial
price setting of:
Case
Research by MIT-Sloan mgmt review
39. Case Considered to be a commodity
in between competitors: all
having the same characteristics.
They found one unique feature
that their target audience,
mothers buying yoghurt for
their little children, could relate
to: the yoghurt was perceived
as healthier due to the low
sugar content.
This gave them the opportunity
to position and price the
product completely different.
Just below the A-brand but
well above their competitors.
40. LOW IN SUGAR
Case The health benefit was
highlighted and the price
was set 40% higher:
2,49€Sales numbers were
higher than expected and
revenu was 600% more
than anticipated.
41. So if you recognize this,
know that we can help you!
Such broad, multifaceted questions do not easily lend themselves to scientific experiment or validation.
2 sides of looking to cost, price and value
Internal vs external
Company vs customer
BY qualitative user research
BY qualitative user research
BY qualitative user research
PROBLEMS WITH cost based?
PROBLEMS WITH competition based?
Costs + margin = price
Costs + margin = price
What do they do?
A good farmer knows to not drain the soil, he has to shift his crops every year
Blue ocean strategy !
2 AXES
Price orientation = prijs goed kunnen vastleggen – idealiter op waarde gebaseerd
Cost – based = wat met variabele kosten/vaste kosten? 100k verkocht – 50k verkocht…
Concurrent – based = price war – brand value!
Value – based = ideaal! Waarde detectie – perceived value – willingness to pay
Price realization = krijgen wat je er voor vraagt
Is samenspel tussen marketing en sales.
Waarde moet uitgedragen worden door sales – moeten eigen waarde geloven
Waarde moet gecommuniceerd worden door marketing – consument moet waarde kennen en geloven
Systemen en procedures moeten sales houvast geven – geen adhoc kortingen - negotiation power – etc;
PerWillingness to pay?
Next best alternative?
Value for the customer?
Setting up pricing team – ongoing challenge!
Setting up salesforce – selling value!
(Discounts only in certain cases: limited in time – action to buy – cash in!)
Value thoughout the company – selling value!
Engineering value for the customer
Doorlopen methodologie
Staps gewijs naar resultaat
Analyseren wat is – richting wat gewenst is
Divergeren – convergeren
Methodology
3 PHASES
DETECTION – limited
CREATION – focus of innovation
CAPTURE – innovation is not common
Large European supermarket – private label of yohurt delivering heath benefits.
They decided to launch at 1,99€ with a cost of 1,29€
In comparison A branded product was 2,99€
MIT-Sloan mgmt review
Competition based pricingunder A brand = 2,99€
Competition = equal
Selling way more than expected
Why?!
Changed packing – higher focus on health benefit
Despite increase in price of roughly 40%
Sales volumes exceeded targets
MIT-Sloan mgmt review