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Value: Locate Ideas to Create More Sales from Improved Value at the Current Price

May 20, 2008
People go through four stages before any revolutionary development:

1. It's nonsense, don't waste my time.
2. It's interesting, but not important.
3. I always said it was a good idea.
4. I thought of it first.

-- Arthur C. Clarke

Give customers something they value more than the competition offers at the same price, and your business grows faster. Repeat this well enough, and the entire industry's growth rate expands. Add new forms of value on top of the ones that caused you to grow faster than competitors in the first place, and you will build one arm of the beginnings of a sustainable competitive advantage.

After a decade of applying this approach, your position will be virtually unassailable and the helpful habits well ingrained. Despite these significant, potential advantages, few companies focus on outperforming in providing new forms of value and greater amounts of continuing value at current price levels.

Business concepts are only as good as the amount that you can apply them to your own situation. How many good ideas have you been exposed to that your organization still doesn't use? Business model innovation is too important to suffer that fate, so let's begin our exploration of business model innovation secrets with looking at how organizations learn to be outstanding in this activity.

If you already had a good idea for an improved business model, you would probably already be using that model. Ask most people to think about what a better business model would look like, and they draw an initial blank.

The equally blank stare you receive is all the evidence that you need that the business model innovation slate is empty now. So how do you move beyond what you know to create new ideas that can help you generate better business models?

Simplify the task at first. While most minds boggle at coming up with new business models, almost everyone can provide valuable observations and ideas that can be used as ingredients for better business models.

But the order of these simpler tasks is of critical importance. Like a combination used to open a safe, tasks work well when undertaken in the correct order and will not help in any other order. Otherwise, you can spend endless amounts of time working very hard, and never adding a successful new business model. The secret is in following the right order.

Think about the last time you unsuccessfully looked for a misplaced object. What did you do? Chances are, you kept reexamining the same places. If you didn't find it there the first time, is it likely to be there the second time? Or the third?

Drawing on that experience, you will find that your odds of success are increased if you begin by looking in places where you have not yet searched.

Adding value for customers is a place where few search for business model improvements. Why? The search for improved value is almost always tied to either justifying a higher price or a higher profit margin as a result.

If neither outcome is likely to occur, few continue to look at choices. Because this dimension of creating the ultimate competitive advantage is rarely explored, you will also find that peoples' minds are not clouded with negative thinking.

They don't know any reason not to do these things, except that you cannot get a higher price or higher profit margin for them. Remove those limitations, and ideas should be immediately forthcoming that have been considered and rejected before for these same limiting reasons. So, most people will find something already in their memories when asked this question. That gets the ball rolling.

Skipping improvements that don't create higher prices or higher profit margins is a mistake for another reason. Many people who haven't started using your products don't think your value is good enough yet. By looking at only your current customers, you are missing the larger number of people who could be encouraged to buy.

If adding value for customers and potential customers is not thoroughly considered, you can imagine how much less well examined is the opportunity to add value for customers' customers. Some may draw a blank in this area.

A good way to stimulate ideas is to spend time with customers' customers, observing how they use your company's and your customer's offerings. What problems do they have? What is most important in their minds now? What opportunities are they missing?

Take that fundamental evaluation one step further back, and look at customers' customers' customers, and there is only the most remote likelihood that much thinking and testing has been occurring.

Go to the final dimension of this perspective and look at all the even further-out dimensions of those who are indirectly using your offerings through intermediary customers, and you can see that only a tiny portion of the value-adding opportunity has ever been considered in your company.

How do we break out of this mental harness as easily and as profitably as possible?

Look for as many ways as you can to add more value in traditional and nontraditional ways at current costs as your first task. Treat all of the ideas initially as being potentially valuable for the purposes of this task.

Although you will not be focusing on ways to add value with higher and lower costs, you will get a surprising side benefit. Your subconscious mind will be paying attention to those questions. You will find the novelty of focusing on adding more benefit at no more cost however to be an interesting, self-confidence-building activity.

Every idea you come up with will make you feel creative, intelligent, diligent, worthy, and competent. That's a good state of mind for opening up the positive emotions that allow your mind to do its best creative business model innovation work. Do this thinking in a brainstorming session with people who have many different kinds of backgrounds and experiences, and you will stimulate one another to do even better.

Your efforts should yield many new kinds of choices, some of which can be parts of the foundations of improved business models. In suggesting the approaches that follow, you should be aware that any other creative process that helps you should be used as well.
About the Author
Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through 2,000 percent solutions and receive tips by e-mail by registering for free at

http://www.2000percentsolution.com .
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