In such a process as the definition of your own offer, where most of the effort should be put in the differentiation and research of unique benefits, it seems strange that our starting point is often the attempt to reach some kind of equality with the competitors on the value offered to the market.
An attempt by everyone to offer the same conditions to the potential client.
This happens because the client we address to is often the ideal client, someone who already knows what he is buying, someone who is aware of his needs as much as he is aware of the offer. For this reason he tends to ask for things that nobody is offering or things that one of your competitors has and you seem not to have.
Satisfying the needs of this costumer means matching your own offer point by point with the competitors' offer. It means getting in what I call the competition of the “x-sario”, that is a challenge based on a chart comparing the features of different products, where “x” identifies the presence or absence of a certain feature.
The competition of the “x-sario”
In these hyper-competitive markets where everybody aims at the ideal client, the “x-sario” of the features becomes an instrument of choice for the client, even if he has no real need to be satisfied.
Imagine when you go buying a new car: ¾ of the features or frills you base your comparison on will eventually prove totally useless for you. You never needed them before, and probably you won't need them once you have them; nevertheless part of your choice is based on a comparison between these elements. Do you prefer a model with 12 airbags rather than one with 10, or automatic wipers rather than manual ones, automatic control of tyre pressure and so on. Given the price, the more the better, this is what you think. And this way of thinking is exactly what fuels the race for functionality and flattens the offer.
Until someone decides to change the rules and starts innovating and introduces a new driver in the competition.
If we come back to our example in the automotive industry, this is exactly what happened with Toyota and the hybrid cars: helped by a global “green” boost things have suddenly changed, the “x-sario” was no more crucial and new parameters like consumption, pollution, recycling and so on came into play.
I wrote this article for those who are tired of running after the newest feature and want to start innovating their offer.
To these people I suggest three ways to change the situation:
1. Start thinking of all the clients you never thought of
Here it's about overturning the above-mentioned process. Instead of starting with an ideal client, start with a potential client that you haven't been able to serve yet, because of a low spending power or because not well informed on the offer in your field. Get the notion into your head: asymmetries in information are not a threat but a chance for you and your business.
To serve this kind of client we always try to develop a lighter version of our offer: less content, less features (reduced “x-sario”) a price lower than the complete version. Note that this way of thinking is often a feature of western companies when working in emerging markets, where it is commonly thought that a less developed demand can be satisfied by a simpler offer.
Again, the starting point is wrong: your offer is thought for an ideal client and a lower offer could be very far from the new needs of these markets.
To build your “value proposition” you have to go among them, understand clearly what their needs are, and find a way – often totally different from the current one – to serve them, keeping in mind that they are not a “minus target” and it's your offer that needs to be totally designed for their needs.
Go back to the basics, to your assets, you will probably have a lot of things that you consider too banal for your current market, things that with the right business model could turn into a great “value proposition” for this markets!
When Ryanair started conceiving his offer, they didn't address to frequent travellers, they dind't try to develop the best possible consumer experience for plane-habitues: they addressed to the people who usually travel by car or train. They aimed at the people who couldn't afford a weekend in London.
All these people had no need for a better “menu”, for better services in the airport and on board, for frills, movies and so on... they simply weren't traveling by plane, they wanted to travel but couldn't afford it!
Ryanair addressed to them, started thinking of cars and trains as competitors, and offered a solution that was until then unthinkable for standard airlines: direct sale only online (without agencies!) secondary airports, no service on board, pricing depending on the booking timing, starting price lower than filling up at the petrol station...
2. Think like a start-up company, DON'T start from your own offer
Your current offer is built for and with the ideal clients. If you want to innovate, forget that!
Start thinking of your true assets, focus on what you can do really well, instead than what you have to sell!
When I started with ADVB Strategic Minds in 1999 it was easy, I had no client, no service and I could start thinking from blank paper.
When I started with ADVB Strategic Minds in 1999 it was easy, I had no client, no service and I could start thinking from blank paper.
After 10 years of business, a lot of experience and a full portfolio for a strategic consulting company, I found myself much more in trouble when I had to innovate the offer and think outside the ideal client.
For years our services were thought for a target of people with a clear head, looking for market analysts and strategical minds to develop new business models or innovate their own competitive placement.
What did we do with people who didn't have a clear head yet? For those who didn't want to invest thousands of € but were only looking for advice? Simply, like all the other strategic consulting companies, we did nothing!
We hid behind the classical saying “This client is not ready for strategic consulting yet!”.
Later, in 2010, we paid a great effort, we started thinking like a start-up. We asked ourselves: if we were to start a company today, what could we offer to these potential clients, to the “minus-target” that everybody ignores?
We listened, tested, thought through and we found out that their need is not to run market research, business plan and break-even analysis...
Their only need is to understand which idea is valid, what are its risks and how to develop it effectively.
And to achieve this you don't need a business plan, you need to meet real people, to talk constantly to the people in your field who have already lived all this, and made mistakes, and realized... And we had all these strategical minds, we had more than 400 around the world!!!
It was all about creating a team of sharp minds for each project and send them thinking with the client. In this way the ADVB Strategic Minds service that makes me more proud is born: it's called Achieve Team (A-team, for friends!).
A low cost consulting service for those who have a business idea and want to talk to us to make it stronger and develop in a very short time a profitable business model. For those who are not yet ready to spend thousands of € in business planning, but are convinced that 2 sharp minds in a room always produce something!
3. Look at how the people solve problems and were they meet difficulties
Ok. You are in Kenya, it's not the world's poorest country, but not even the most developed.
You work in Nairobi and your family lives in Mombasa, 500 km far, and you can't go there more than a few times per year, or you will spend the little money you earn in traveling. You are there to work and transfer the money to your family at home. To do this you don't use banks, because you have no bank account, you use local agents but without any warranty and you can often be cheated.
But – this is a paradox of the world we live in – you have a mobile phone, like other 20 millions Kenyans (50% of the population!!!), Safaricom, the main mobile phone provider in Kenya, has a great service called M-Pesa “Send Money Home” (“Pesa” in swahili means money), you go to a Safaricom ATM like when you charge your mobile, you give them the money you want to send home, they accredit it on your mobile account, and then you text your wife with a code and the amount of money that you want to transfer, she goes with her mobile to a Safaricom ATM – they are everywhere – she shows the code and her mobile to the agent... and she withdraws the money! No risks, as easy as texting!
Why did I tell you this nice story?
* Because M-Pesa changed the lives of millions of people in Kenya and it's the first successful case of P2P money transfer in the world!
* Because all of you (including me) would think of Kenya like a country where you offer the lower version of our mobile phone services
* Because Safaricom looked at how people solve problems and without – and not only – thinking of any advanced mobile service!
* Because, if you think of it, we all have the chance to conceive an idea like M-Pesa in our job, we just need to believe in it and think outside the box!
