There are two basic values that arise within the relationship of the customer and the enterprise:
1. The values for the customers – they want to receive “as much as possible for as little money as possible”
2. The value for the company – it wants to earn, to create profit – currently and also in the future.
With this way of doing business we enter into a conflict – on the one hand the value for the customers who wish to obtain “as much as possible for the lowest possible price” and the values for the company which wants to make a profit. Growing competition reduces the real price and the firm has to reduce the costs as well. However, this is possible only up to a certain point. The long term solution lies in reducing the costs but also in innovations which enable an increasing of the maximum price by creating a new market and entering it with an original solution which hitherto has not existed.
It is not enough only to compete with a low price and it is no art to sell cheaply. The art of business is to sell for high prices and at the same time to satisfy our customers. Think of how to sell for high prices and to have satisfied customers. Take a look at the best restaurants, how they are doing it, or producers of premium products.
How to define value for the enterprise? The company is inventing and making new things which should bring profit in several areas:
1. The finance – higher turnovers, bigger profit, larger market share, etc.
2. The customers – a higher satisfaction and loyalty of the customers, new customers and markets
3. The innovations – new knowledge, know-how, image, progress in the value chain towards customers, etc.
4. The processes – higher flexibility, quicker serving of the customers, better service, etc.
Do you know the needs of your customers and the level of their satisfaction? Do your customers talk to you about their desires and dreams? Do you know the world of your customers enough for you to be able to reveal their hidden needs, desires and dreams?
So many questions and so few answers because we live our lives trapped within our own worlds.
Ask a development engineer about a product he has just designed – he/she will describe thoroughly all its technical functions. However, when you ask him/her about the customer and the way of using the product, then arguments are often lacking. A short time ago I was discussing with development specialists in a firm about the benchmark of their product. A table full of technical parameters which I did not understand at all. When asked if the customer understood it, I received the answer that they do not make products for “blondes”. We often do not realise that the customers do not buy a drill from us but the hole that they want to create. Sometimes we ridicule a customer who does not understand our language; however, the important thing for us is to understand the customer’s language. The language which will reveal the deficiencies in his/her work; his/her unfulfilled needs and sometimes the unexpressed dreams. In a language in which we can find an opportunity for our innovation.
Visit your customers, observe them at work and listen to them.
If I were to choose an expression as the most important one for our lives and the making of decisions – for everything we are doing, no matter if it is business or love in our lives, I would choose just one single word. It is the word “listen”. To listen to the signals which life brings, to the people in our surroundings, to the voice of our conscience that is deep within, the voice which determines our mission in this world.
Instead of listening we often talk, yell and shout each other down. We often think we understand everything, underestimate our customers, speak for them, but we do not know their real language at all. The largest source of failure is the success which brings pride because it is that pride which removes our ability to listen.
The word “listen” is the basis of leadership. To listen to our inner voice, the voice of our fellow-workers, customers and world means to replace pride with humility, yelling with silence and our own words with the words of others. To listen to the customers means to learn their language, to understand their problems and to have the chance to give them more than our competitors.
Every entrepreneur attempts to have satisfied customers. It is fine to have satisfied customers but it is much better to have enthusiastic customers who relate positive anecdotes about you; found fan clubs and discuss on the internet.
Do you know who can be a better source of your entrepreneurial success than a satisfied customer? A dissatisfied customer or a non-customer. A non-customer is that one who is not served by us because he/she is unaware of us and our offer, or denies our offer. A dissatisfied customer is that one who expresses reservations about our product, service or method of service. He/she is giving us two opportunities at the same time – information on what we can improve or innovate, and an opportunity to resolve the situation for him/her to become our fan.
Don’t explain to the dissatisfied customers that they are not right. Listen to them. And convert their annoyance and dissatisfaction into a positive relationship. I observe the doctors or nurses how sensitively they respond to criticism. However, the patient has more reason to be sensitive than a doctor – a professional. Don’t let’s forget that the customer needn’t be a professional in our field of work and does not speak our language. We are those who have to learn the language of the customers, we have to be patient and generous. Let’s keep in mind that angry customers and listening to them are the best business opportunities.
Look around you and you will find hundreds of successful businessmen who have built their firms on some of the aforementioned trends. And probably you will reveal other new trends which are just being developed. Don’t be worried by an idea because nobody has ever done it like this. When everybody is doing it, there is no new opportunity any more, only business with commodities.
Now, let’s look at the value from the point of view of the customer. What have you bought during the recent year? What was the thing that made you happy and satisfied? What was the reason for your satisfaction? A good price, usefulness, the novelty of solution, attractive design or something else?
In the table look for values which could address your customers.
|Novelty||Mobile phone, smartphone, iPad, Red Bull, lighting with LED, MP3, passive houses, e-bike, electro mobile – new solutions which have created or are creating new markets and new business models (blue oceans)|
|Output||Increasing the computer output enabled simulations and animations of complicated processes, increasing the output of digital cameras gradually killed off traditional photography|
|Customer adaptations, customisation||The company Nike will make you tailor-made shoes, in the firm Shirtinator you can create your own T-shirt design, special e-shops assemble customised bikes, on a cooking course the customer collaborates with the cook in creating a meal, etc.|
|Improving the work of customers, increasing performance efficiency of their process||The delivery chair from the company Borcad saves 40 % of the room surface and 18 % of the doctor’s time, the 3D scanning of the spaces radically increases the designer’s productivity of work|
|Design||The firms Apple, BMW, Loewe link the technical parameters with exceptional design|
|Brand, status||The brands Harley Davidson, Ferrari, Christian Dior, Gucci, Calvin Klein, Channel or Rolex symbolise the status, image or lifestyle|
|Price||The customer usually appreciates an offer of high value for a lower price – luxury for an adequate price, all inclusive. Tata Nano is sold for 2,500 dollars in India and has enabled people to swap bicycles for cars|
|Cost reduction for the customer||The digital printing processes or computer systems have reduced the costs in production, the passive house reduces the costs for living|
|Risk reduction||The hospital bed LINET reduces the risk of the patient’s falling to the floor, developing infections or bedsores, NOD 32 from the firm ESET reduces the risk of viruses penetrating the computer|
|Availability of the inaccessible||Henry Ford made the car accessible to the general public. Similarly, Southwest Airlines and Ryan Air travel by airplanes|
|Simplicity||The iPad has a simple and intuitive control, the purchase of books on Amazon is simple and quick|
And at the end, one more glance at the possibility to create value for our customers – let’s take a look at the whole chain of purchasing and utilising our product. How can we increase e.g. the customer’s productivity or non-complicatedness in the purchasing process? Have a look at your e-shop or the system of selling. I often think about this value when I am registering at a hotel reception and undergoing a tedious and complicated process after a long drive. Are we able e.g. to increase the customers´ comfort when delivering a product – by delivering the goods to their homes or automatic installation? Does our product possess any entertaining features or image? Can I eliminate any customers´ risk when they use my product or improve its productivity making the maintenance simpler, or eliminate the ecological risks during its disposal?
|Entertaining character, image|
Can you see what a magnitude of opportunities we have for us to create new values for the customers? You will certainly find others, your own ideas and inspirations. However, one thing is important – they have to be values acknowledged by the customers and not values enforced by us.
Until now we have dealt with the problem of what values we can bring to the customers and to us with our new product. Now, let’s continue and we will look for an innovation potential of our product.
At first we will analyse the process of the customer which possesses the following principal steps:
When analysing the customer process it is important to suppress our effort to speak about the functions of our product, material or the algorithms we inserted into the products, but we have to speak the language of the customers for us to improve the process metrics, the quality and productivity of their work and to improve the competitiveness, safety and security, convenience, etc.
Let’s remind ourselves of the properties of a successful innovation
– it significantly increases the value for the customer as well the company
– it improves the customers´ quality of life
– it improves the environment
– besides the measurable value it often evokes emotions
– it removes controversies, conflicts, paradigms or contradictions which have so far not been resolved.
The customers´ process and its thorough knowledge provide us with a lot of possibilities to look for innovation ideas. Other innovation sources can be found e.g. in new technologies which can not only radically improve the customers´ process, the functionality of our product or service but they sometimes lead to the termination or regression of a whole line of business based on old technologies.
Further trends could be designated as transformational ones. They are the trends which arrive during the breakthrough time periods when the world of business is changed for long time periods, the industrial revolutions are under way – and they change the current rules and paradigms.
The evolutionary trends are the next source of innovations
The products around us develop according to evolutionary laws which say that every technical system has a life cycle in the form of an S curve, similarly as with human life – at its rise the system is imperfect, it optimises step by step, improves and then ceases to exist and is replaced by a system with a new S curve which lives it own “life”. There are several evolutionary principles we will not analyse here, e.g. increasing the level of idealness (the system permanently eliminates its harmful functions and improves its useful ones), segmentation, dynamisation and field deployment (material was cut by a sharp stone, axe, saw, grinding wheel, laser, plasma, water beam, a typewriter with letters changed into a needle printer which transferred to the black-and-white and later colour laser printer, etc.). The technical systems increase the density of the functions, they get smaller, they gradually increase their automation level, etc.
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