Last time I wrote about the death of the core competence and your need to find partners for together creating a unique value proposition to keep your customers in the future. The big question is, of course, how do you do this? I’ve created a simple model that will help you understand your current situation, environment and plan your next moves

As always, what makes a model work is not the model, but the time and effort you put into the model. Use the model to guide you and spend time thinking and exploring – the framework will make it easier for you to collect your thoughts and find a good way of defining your future market positioning. A new market position also helps you identify the partners and services you would need to incorporate in your current offerings so you’re able to deliver unique customer experiences, also in the future

The model’s four parts covers the spectrum of customers, markets and competitors and should be fairly simple to work with:

  1. What do you really offer your customers today?
  2. Near-field value chain analysis; the business side of things
  3. Far-field value chain analysis; the user side of things
  4. Putting it together; how will you keep your customers?

One: Your unique value proposition

This is classic, so bear with me if you’ve heard about this many times before. However, so very few people actually use this in their strategic planning and business that I feel it’s necessary to highlight again (and again)

I recommend using the laddering technique when defining the value you provide. The classical example is the drilling machine:

You:

  • Buy a drilling machine because you need to make a hole in the wall
  • Need a hole in the wall so you can hang up a picture
  • Want a picture on the wall so your home can be pretty
  • Like a pretty home because it makes you feel good & happy

Taken to the extreme, you therefore buy a drilling machine to be happy! That’s probably not something you will use in your advertising but the knowing the users complete thought process about buying your products is required to work out the next steps in the model

Two: Near-field value chains

In step two, you’ll be looking at your competitors and partners in your current industry and in the industries right around you, For an insurance company, for example, near-field value chains would be those of other financial services organizations like banks, where partners in the insurance value chain could be loss adjusters or third-party (claims) administrators

Start out by drawing how your own value chain look today so you’re sure to have the right foundation to work on. Then, connect the value chains of your partners into the drawing and you’ll begin to see how you connect together and I’m sure the first ideas of other areas of cooperation will start to evolve already now. Take a hard look at what your partners (and yourself) are producing in-house and analyze if tasks / processes can be switched for a cheaper, faster and better output

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This, of course, involves touching upon untouchable areas – services, units, etc. that has been in the company forever and is held very dear by senior executives who will most likely fight to death to keep these areas in-house. And this is where it starts to go wrong. I completely understand that employees have veneration for products and services they’ve been part of creating, but clinging on to something just because of this will soon jeopardize not only the products and processes, but the whole company

You – and the company – need to move on. Therefore, write down the areas where you see others providing same or better products and services than you and understand how you could integrate them in your delivery processes

Three: Far-field value chains

The third step is exploring your key users / customers in detail remembering that all customers are whole people, so their everyday wants and needs should be taken into consideration when you think about how to design the customer journey and service / product offering of the future

Allow me to go back to insurance. Today, it’s clear that we as humans are so used to technology and ‘always on’ that we expect ultra-fast delivery, full accessibility and interesting experiences when dealing with organizations. This, too, goes for insurance, even though insurance probably is one of the more boring industries I’ve come across. Insurance managers state that “we don’t need to move this fast; our customers only want a cheap insurance and their claims paid”. Almost correct. The statement should be “our customers only want a cheap insurance and their claims paid, but they want it immediately, at any given time of day, delivered as an entertaining experience”

In essence, this means that you should understand your customers’ everyday lives and how they live them as well as how they want to live them – this information will be invaluable when you’re working on defining how to create a unique offering for your customers in the future – for some industries, this may sound far-fetched, but with the pace the world is developing, offering even insurance in a fun and engaging becomes possible – and with almost identical products in a very competitive market, this might just be the differentiator you – or your competitor – need

Four: Combining it all

If you’re done your groundwork thoroughly, you should already have a lot of ideas and thoughts on how to prepare your company for a turbulent future. Remember, you must focus on the unique value you can provide to your customers and equally important, who in the near- and far-field you can partner with to create an offering that beats the offers from your competitors

You’ll use this knowledge to define how you want to interact with your customers and you must be quite determined on what processes you want to continue owning yourself and what processes someone else does better than you. This will most likely be the hardest part of it all, as you and your team must be realistic about what you’re actually good at. In my experience, most companies are only truly good at 30-40 % of their total operations which leaves quite some room for improvements and finding great partners for securing the future together

 
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#readyfortomorrow #frederikbisbjerg #insurtech #digitaltransformation #businessdevelopment #valuechain #bisbjerg #valuechains #businesstransformation

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