Customer Benefit & Nirvana

With reference to all material about this, here’s what I realise about the customer benefit value chain:

Need -> Solution -> Product -> Brand

And here’s how I detail this value chain:

Need: What a user needs – expressed or latent need

Solution: Any answer, physical or logical, tangible or intangible, single or multiple, that helps the user feel his/her need has been met

Product: Indivisible component(s) of the solution that contribute to meeting the user need

Brand: The name with which world remembers the product(s) or solution(s)

What’s so special about this value chain?

More often than not, you see the evolution from Need to Brand. But very rarely do you see the evolution in the other direction. In other words, it’s likely that the descendant doesn’t exist but the ancestor does exist. It’s highly unlikely that the ancestor doesn’t exist but the descendant exists. The descendant is the smoke that comes out of the ancestor fire.

Each of the descendants evolves when there’s a critical mass of the ancestor. Take the software world for that matter.

Need: People wanted to communicate quickly with each other at workplace and outside of it. This was felt across a few offices which were evolved and in the cutting edge of business (universities, defence institutions, financial institutions etc).

Solution: Someone thought electronic mail will solve the problem. And she/he/they defined protocols for data interchange and communication among different systems (address header, smtp/pop/imap etc).

Product: A smart guy created a web-based email that could be used by people quite easily, with very little learning curve. This used the backend protocols etc that were part of the solution defined by other people. It also could communicate with other systems using the same protocols. Bingo! the world started getting in touch.

Brand: The product was bought by a biggie for a few 100 million US$. By that time the world knew the product by the brand.

Product Nirvana is when the Brand is known as the Product. E.g. “I have a hotmail“.
Solution Nirvana is when the Brand is known as the Solution. E.g. “Why don’t you google this and find out?“

Update:

Hemang was critiquing this post and mentioned that the more you milk the brand, it tends to become a ‘commodity’. How does one handle that? More of that in a different post.

Winners take most of it

This is a departure from the classic ‘Winner takes it all’, when applied to emerging markets that are dominated by an information-intensive age.

The most visible impact of the information age (PDF), according to me, is the levelling of playing field in a trice. And, if you look at history of successful businesses in this age, the ones that make winners out of its customers are the most successful – Microsoft (created a large number of successful companies building Windows apps, a large number of individuals and groups that learnt how to use a PC and evolve in life), eBay (created a new group of people who started businesses and made money from that) etc…

In essence, the company either explicitly or implicitly focused on creating winners out of everyone who was their customer. If they’d focused on taking it all, they may have been quite short-sighted. Imagine if Microsoft did not expose Windows APIs for people to build apps and decided to do it all by itself.

That led me to think that where efficient markets are at work, any player has to get its customers to rally around itself, since it’s net perceived value (NPV?) is the sum total of the value each customer places on it. And, unless the customer feels like a “Winner”, having sided with the ‘perceived winner’, s/he will not place high value on the company, which means, the company’s net perceived value will be low.

So, in the information age, the ‘Winners take most of it’!

Update:

Ravindra, my colleague passed on an interesting comment:

“To Win in a Market, create the Market”

Catalysts are strong-willed, being Unchanged Agents of Change

God and Competition

Competition is God; Don’t be an Atheist TM

I formed this phrase when thinking about how one can get oneself and his/her team fired up about what they’re doing! I realise that a lot of inefficiences can be chopped off in one master stroke if the team’s focused on a tangible, realisable goal that appeals to primal instincts!

Nothing brings a pair, a team, a biz unit, an organization together than a common target to focus on. And, needless to say, business is where one can defeat one’s competition without much of a bloodshed. What do you think?