Value

The purpose of this site is to help business owners and managers build the value of their firm by delivering value to customers. Call it a value loop:

• Deliver value to customers
• Recoup value from customers

• Blog - Captures examples of innovation, innovation opportunities, marketing strategies and company value
• How To - Descriptions of processes to create
  • Value Based Marketing Strategies
  • Value Based Business Models
  • Measure The Value Of A Company
  • Measure The Value Of A Strategy
  • Benchmarking Value
• Library - A collection of videos, articles, white papers and podcasts related to value and value based marketing strategies

Succeeding in business can be difficult. A “back of the envelope” calculation suggests the perhaps as few as 0.01% of all startup ideas that get as far as business plan will go on to become large successful companies. Of the companies that do make it beyond the idea stage many fail to deliver value for their owners, they make products that are similar to competing offerings and cannot escape the commodity trap. This results in lower company value and hence lower returns for the owners. One of the problems companies, especially startup’s, face is their tendency towards being product centric instead of customer value centric. Being product centric is a two edged sword, on the one hand bringing a new idea to market often requires tenacity to overcome the naysayers. On the other hand the same characteristic can lead to “blindspots” with regard to seeing what customers want and where they will see value in a product. Failure to deliver what customers see as value can result in mediocre sales if not outright failure. Businesses, especially fledgling companies, face many challenges but two of the most important are:

• Delivering Customer Value
• Capturing value for the business

The purpose of this site is to point in the direction of solutions that support increasing both customer value and business value.

How Do You Create Value for Customers?

In essence you give customers a reason to purchase your product over any other choices they may have. In marketing terms this is what Peter Doyle referred to as a “Differential Advantage”. Various parts of this website describe a process for creating differential advantage and show examples. However, the foundation of a differential advantage is Innovation.

The Need for Innovation In A Differential Advantage

A differential advantage has to be unique if it is to provide a reason for customers to prefer your product over others. That is to say customers must reach the conclusion that they cannot get the same value from other products and so they prefer your product. For example when non-algesic pain killers were introduced they offered a solution that would not cause stomach bleeding and so for people prone to stomach bleeding they offered more value. QED, the product design has be innovative or else it will by definition not have a differential advantage.

How Do you Increase Business Value

Deliver a “Differential Advantage” profitably. Easier said than done perhaps but innovation is at the heart of the process.

The Need for Innovative Business Design

Businesses often grow in traditional formats that follow historic patterns. New forms of business certainly bring new titles, such as “Revenue Officer” in instead of sales manager but in truth we have not seem much in the way of radical changes to business design in the last 50 years. Rarely do we see a dramatic change such as Dell brought to the personal computer industry when it revolutionized distribution. Innovation seems to lack in business design, so why is it important.

Why is Business Design So Important?

The value of a business is based on the total of its projected free cash flows. Ultimately this is just a measure of efficiency and effectiveness, but we can see that if your business model is no different from other firms then it will be hard to gain an advantage in terms of increasing the company value. Think for instance about the example of Dell. Distribution by telephone sales meant that Dell saved money by not having any stores. This gave them a significant advantage over their competitors. Dell’s business model allowed them to have a price advantage in the market. Innovation in product design is not sufficient, you have to be able to deliver your product profitably and this usually means that you need to create an innovative business model.

Building Value Requires

• Value based marketing strategies, providing unique value.
• Value based business models that provide competitive advantage.