Welcome again…. One of my own quotes that I like to repeat too often is
“As soon as you move, you are in a different place.”
To me it means the simple action of taking a metaphorical or actual step – a single step – changes my view.
And with every change of view comes a whole new world.
It seems humans are at their best when moving forward. When standing still we have no momentum, no power. Think how much easier it is to change direction slightly once you are moving – just swerve a bit!
Dr. Seuss wrote: “The more that you read, the more things you will know. The more that you learn, the more places you’ll go.” I add that: ” Learning is moving, and moving is great. Taking action on your learnings is when you best create.”
You don’t “get it” until you do it…. Knowing how to touch-type is not the same as touch-typing…
This weeks Bite is one of my favourites and most powerful tools. I believe most it to be the most potent “framework” for strategically growing any business (or career)
Hierarchy of (Dynamic) Value.
(Created by a seriously clever man called Marshall Thurber.)
Here is how it works.
In a market where there are:
1. Fully informed buyers (now almost every where because of the internet) and
2. Alternative sources of supply –
then the only defense against competing solely on price is to have UNIQUE value (and constantly improving). This means there is NO alternative source of supply. ie the value you bring must be unique – because in a fully informed market and with alternative sources of supply – unless you are unique – you will end up competing on price alone.
According to Thurber there are different levels of value.
From the lowest level:
Commodity – where the only difference is price. This will give you the lowest possible margins and most competition. No loyalty. Eg coffee beans – grind them and make your own.
Product – better than commodity. Eg a phone or a cup of coffee. Margins better than commodity, but not much. Hard to defend.
Service – same as product – and these two levels (product and service) are merging – eg phone with a phone plan. eg coffee made for you at a standard coffee shop. Products and Services are MERGING to create “offers”.
++++++++++++++++++++++++++++++ ++++++Minimum Target+++
Experience – by definition – every “experience” is UNIQUE. Selling the experience rather than a product/service or commodity means protection from competing on price. eg Starbucks sell the experience – not the coffee. Disney sells the experiences – not the rides. And we pay much more for it. (How can you make your business into an “experience”?)
Transformational Experience – Can charge even more if you can “transform” them. Eg lose 20kg. Get hair. Become attractive to women/men. Become a ‘different/better’ person in some way.
Predictably Transformational Experience – Can charge even more because you can guarantee it – risk reversal.
Your goal is for your businesses to ALWAYS move to at least the “Experience” level. Not only that – it is DYNAMIC – people will copy your and the internet makes information flow faster and faster – so your value creation must keep changing and improving…As soon as we are not unique – we are subject to price pressure.
This is a heavy duty model – and I will revisit it in the future. Right now make a list of what you do that your competitors do not. And then make a list of what you could possibly do…. I promise it is worth it.
Cheers
James
Ps – your list does not have to overpowering. Plumbers who give chocolates, balloons on signs, specific guarantees (eg quotes to you within 3 days), different colours (pink cement trucks!), loyalty programs, smile!, get details and send birthday gifts, newsletter (seriously) – and make it “human”.
Most “competition” is vanilla flavoured beige sameness. If you cannot create a difference that increases value (???), then make it a cosmetic one.
Pps – if this makes sense – forward it to a friend…
