New services. New products. Nine Steps.
One of the big problems with chainsaws is that they can be hard to start. High compression models mean you need to yank really, really hard to get them going, multiple times. I bought a new one from Stihl recently which has what they call a recoil starter. You still pull on a starter cord but you can pull as slowly and easily as you want because all you are doing is winding up a starter spring. Once the spring is fully wound up it releases a catch that turns over the motor with enough force to start the saw. Easy-peasy. I’ll never buy another saw without this cool new feature.
Products and services are becoming stale and non-competitive at an ever-increasing rate. Phone books were viable for about 120 years. Fax machines were around for about 40 years. The Walkman was on the market for about 20 years. There are a host of other products and services that are simply no longer valuable – to anyone.
In light of this, when did you last update or create a new product or service to monetize the new realities?
- If your market is shrinking – you can sell to new types of client.
- If your clients’ needs are changing you can sell more to existing clients
- If your market position is being challenged you can increase your value to existing clients
- If you need margin (and who doesn’t) a rethink can reduce the costs of existing products by removing unneeded features and leveraging new production approaches.
Here’s my 9 Step Program for inventing new products and services:
1.Meet with your top three customer and ask:
- what must they do to get value from your products and /or how do their customers get value.
- which is the supplier they would most like to replace
- what have been the major changes in their market over the last year
- who / what they see as their direct and indirect competition
2.Value stream analysis / Value stream change analysis
- Understand how each of your products and services fit into your clients’ value steams
- What do they need to add to your product to provide value to the next member of the value chain
- How has this changed over the last year and how do you anticipate it changing over the next three years
3.Products / Features - development
- What new offerings can you introduce to satisfy changing needs andto remain competitive. (Look for both existing need and nascent needs)
- Which current features can you eliminate, what new features can you add
- Develop a short list of potentials
4.Product / Service Selection
- Rank your potentials based on
i.Ease of selling (channels, training, provisioning, etc)
ii.Ability and capacity to manufacture, source or create
iii.Ability to differentiate (think ‘Best in World’)
- Test sellability of your ideas with a Minimum Viable Product concept.
i.For services, a chart, diagram or brochure is often enough
ii.For tangible products a physical mock-up is most powerful
6.Pricing and forecasting – value derived – (Pricing pyramid)
- What is the typical value a buyer would derive from the service, product or incremental feature?
- How many opportunities are there?
- What portion are likely to buy if given the opportunity
- Where are you positioned on the pricing pyramid?
- Can you split your offering into different ranges to cover different buyer values
- Use our Pricing Pyramid to validate your pricing
7.Go to market plan
- How will you create awareness for your new offering?
- How will you engage your current and future buyers?
- What will the competitive reaction be?
- What are the timelines?
- What will it cost?
- What is the impact on cash flow?
- Develop a 12 month revenue and expense budget
- Remember that perfect is the enemy of good enough.
If you, or someone you know, would like to move faster this year follow this link.
Thanks for reading,
This blog is the second in a series providing serious ideas involve a bit more effort that our last series on ‘easy things to do now’. (If you missed them – you can read them all here).
Let us know what you think. Questions, comments, complaints and suggestions are always welcome!