• Innovative Strategies That Create More Profits

Category: Private Blog

Differentiation Is The Key To Profits

Posted on by harborcapitalgroupinc

 

Current markets couldn’t be more crowded. And the number of products and services continues to grow.

Compounding that overcrowded problem, the internet allows companies to market their products globally.

Plus, most companies try to make their product better when they should be trying to make them different.

Products are sold on their perceived value. Tim Williams, Ignition Consulting Group,  said

that making your product better isn’t always better; different is better. The primary goal of business isn’t revenue;

it should be profits. Differentiation is the key to profits. Therefore, you need to keep innovating your product offering. 

Standing out from the competition is one of the most difficult challenges marketers face.

Sameness is the combined effect of companies needing to be more similar in their offers, poorly

differentiated branding, and mixed messages. The language they use is identical to that of their competition.

If you visit competing companies’ websites, you’ll find that most offer no meaningful differentiation. They say the same things.

Also, some companies need to restructure

According to Indeed.com, many businesses restructure over time and use various strategies

to advance and distinguish themselves in the marketplace. Consider creating

a differentiation strategy to increase profits without high risk or lower prices.

 

Why A Differentiation Strategy Is Challenging

 

You can only compete on features for a while. Can your incremental differentiation be featured?

Yes, according to CXL.com, but any gradual improvement has the chance of being copied relatively soon.

If you look at any mature category, you’ll find it full of products that are the same.

 

Commoditization is increasing in every category. Once novel features are now table stakes.

A/B testing tools. Or heat map (mouse tracking) tools. Or session replay tools. Or email marketing tools.

They all have similar features, with minor differences.

It’s increasingly more work to say how one tool is different or better than others.

 

Almost all smartphones have great screens. It wasn’t always like that, but you can’t build or sustain

a competitive advantage on screens anymore. You could compete on battery life,

but you can ride that wave for only so long if you make a better battery. They will catch up.

 

What Is A Differentiation Strategy

  

The main objective of a differentiation strategy is to increase competitive advantage.

You will accomplish this by analyzing the strengths and weaknesses of a product, the needs of your customers,

and the overall value it can provide. Then communicate that unique product differentiation

by showing how it differs from your competition.

 

It also requires a value proposition that matches the buyer’s needs and wants.

This product difference should also be in sync with your brand and may help build brand awareness.  

 

How To Create A Effective Differentiation Strategy

 

 Differentiation isn’t as much about creativity as it is Atep m logic. You are going to make a logical argument

that is clear, compelling, and convincing. If you see the logic of your argument,

there is a good chance you have a winner. The following are four basic steps you can take to get started.

One: Make sure your message makes sense in the context of your category. It starts from what the marketplace

already knows about your product and what your competitors have told them.

You will need to do a little research for this information.

Two: Find the unique, differentiating idea that separates you from the competition.

Three: Make sure you can support your differentiating idea and that you can

demonstrate that difference. Claims without proof are simply claims.

Four: Communicate your difference. Every aspect of your communications-

advertising, sales, website, etc.- must reflect your difference.

 

If leadership is involved in the process, you will also find that your differentiating idea greatly motivates your employees.

Product differentiation strategy should show a benefit that is exclusive to that product. Below are a few common strategies

employed to differentiate a product or service. At the same time, a  successful differentiation strategy must align

your product or service with customer needs. An example, Amazon offers two-day shipping.

This differentiation feature was embraced by customers and is one of the reasons they have been so successful. 

 

Two approaches to creating differentiation

 

A broad differentiation strategy, according to Gaussianco.com,  creates industry-wide competitive

advantages that differentiate the offering from competitors. However, customers must widely

value a product with an overall differentiation strategy. Being unique in a

large market, you can increase your price point and improve your profits.  

 

A focused differentiation strategy is used when you want to focus on one specific customer market.

A concentrated approach takes a segment of the previously described broad strategy audience.

It narrows the focus down to those with unique needs. The market should be niche,

but there must still be customer needs to address — because without customer needs, a new offering is unnecessary.

 

A Few Ways To Make Your Product Or Service Different

 

There are many ways to distinguish your product from your competitors. To get started on your plan,

the following are a few suggestions by Jack Trout to get your thought process going.

The magic Ingredient. If you have a different way to make your product or some special ingredients, don’t dismiss them. Make them a big deal. A differential.

High-Technology Product. If you have some high-tech designs, parts, or systems, name them and highlight how they make your product a better choice.

A New Innovation. You should make this the cornerstone of your differentiation. Again, give it a name and promote it.

A System Innovation. It could improve the process of using the product or enable the development to connect to other products and has a specific benefit.

Charge More. If your product is made better or has a better result, highlight it and justify the higher value and price (and added profit).

Help the environment. A product or service that helps the environment is a popular and essential feature for many people. Highlight it.

A different design for an old product. If you can change the design of an old product and make it better, different, or more usable, Make the design itself essential.

 

Benefits Of A Differentiation Strategy

 

Differentiation strategies have several advantages that may help you develop a unique niche

within your industry. Here are the possible benefits from Indeed.com of creating a differentiation strategy:

 

A differentiation strategy allows a company to compete in the market with something

other than lower prices. For example, a candy company may differentiate its candy by improving the taste

or using healthier ingredients. Although its competitors have cheaper candy,

they can’t provide the taste consumers may want from that specific candy company.

 

The benefit of a differentiation strategy is that it builds on the unique qualities of a product.

Your company may create a list of characteristics its products contain that your competitors

need to improve. Those characteristics will differentiate your product;

you may communicate this through effective marketing and advertising.

 

When products are differentiated and turned into higher-quality products, it offers more

opportunities for larger profit margins. Also, This differentiation makes it easier to generate interest and close sales.

 

How Do You Know If Your Differentiation Will Be Effective?

 

Is your differentiation real? Information from Hingemarketing.com Differentiators can’t be fabricated.

It’s too easy to spot exaggerated claims. And to make it work, you have to deliver what you promised.

Any company can claim superior service but do nothing special to make it a reality. No special policies. No special training.

Nothing to ensure it happens. The bottom line is that they are similar to many competitors making the same claims.

 

Is it relevant and part of the buyer’s selection criteria? If your point of distinction doesn’t

matter to your prospects, it won’t bring you more business. Ultimately,

what is most important is what plays into your target prospects’ selection criteria

and decision-making process. Irrelevant differentiators are a waste of time and money. 

 

 Conclusion

The marketplace is very crowded, and as we grow globally, it will get even more crowded.

Therefore,  it is critical that you have either a low-cost strategy.-but only one company in your market

can be the low-cost leader. Or do you have a differentiated product or service –

and several companies can have differentiated products in a market. 

We were told for years that market leadership ad profits came from increased efficiency,

but that is not true today. Differentiated products and services generate significantly more revenues and profits.

Getting a differentiated product or service is complex and may take some time to develop,

but it’s possible. You can differentiate your product or service in many ways..

I will end with this. Michael Porter, Harvard Professor and renowned strategist, said there are only two business strategies: low cost and differentiated.

 

I would love to hear your thoughts on how this differentiation “starter” worked for you.

Positioning Is The Battle For Your Mind

Posted on by harborcapitalgroupinc

 

To complete today, you must create a “position” in the prospect’s mind, and getting “shelf space” in the prospect’s mind is becoming more complex and competitive.

Positioning helps solve the over communications problem. So what are positioning strategies, and how do they work?

Potential buyers have a vast array of companies and products. The internet makes it quick and easy to access this marketplace.  

Consequently, setting your company and brand apart from your competition is critical for long-term success.

According to Jeff Bezos, on hingemarketing.com”Your brand is what other people say about you when you are not in the room.”

One excellent solution to this problem is a positioning strategy that will help you establish your company

or product “position” in the minds of your target audience. But, you want to use simple concepts

and express them using simple words. Positioning can enable an instantly positive impression

of your offer and its value. Plus, it offers a way to differentiate your proposal from your competitors,

And it doesn’t matter if you are a B2B or B2C or offer unique professional expertise; it works for everyone. 

 

What is A Positioning Strategy

 

Paulwriter.com states that a positioning strategy is a marketing plan that determines where your business stands

in the overall market and how you should be positioned to attract more customers.

The net result of your project is a statement (written or visual) that sets your company and product apart

from your competition and offers extraordinary value. A successful positioning strategy helps companies become

an authority in their field, distinguish themselves from competitors for better brand recognition,

or even create new markets by identifying unmet needs among consumers.

More specifically, businesses may use this approach when going up against

established players who have been around longer and those with a more incredible distribution channel.

 

Positioning influences what customers think of your company, brand, or product. Still, it will not convince

someone of a concept they don’t agree with or believe. Therefore, your positioning must align with

the already-established beliefs of your customers and your strategy constructed around this.

 

 The Three Key Elements Of A Positioning Strategy

 

Market Positioning is the ability to influence a consumer’s perception of your brand or product relative to competitors.

Market positioning creates a designed brand or identity based on your strategy. 

 Channel

Your channel is how customers interact with your brand. Depending on your business model,

your channel may be your sales or marketing team. Use this research information to help you

to collect data on how to reach and deliver your products. 

 

Customer 

Every successful positioning strategy must fully grasp the target market and customer needs.

Knowing your target demographic will help you guide decision-making. This information is necessary to create the right pricing strategy.  

 

Competition

Evaluate your market position relative to your competitors.

A visual positioning map or tool (you can even use the business model canvas for each competitor)

helps visualize where your company stands in customers’ minds to help you see the overall market strategies.  

According to corporatefinanceinstitute.comThese three market positioning elements give you

the information you need to get an overall perception of your brand or product relative to competitors.

This perception should enable you to establish a clear objective and establish the brand

or product’s image or identity so consumers perceive it in a way that makes sense.

 

 What are positioning strategies?

 

Product price 

A reliable differentiation strategy links your product with a competitive price point.

This positioning strategy focuses on the relationship between price, quality,

and the consumer’s perception of the product value. In comparing costs, a buyer might assume that one product is higher in price

and, therefore, is higher in quality. Conversely, a lower-priced product is positioned to be more affordable,  

 

Unique value proposition

What is your product’s unique value proposition? Highlight the features and benefits

of your product as uniquely equipped to meet the specific needs of your targeted customer. 

 

Product Quality

Customers are accustomed to paying more for perceived higher product quality.

This strategy is incredibly successful in the luxury market, where high quality,

limited availability, and famous brand ambassadors influence purchase decisions.

 

Competitive Positioning

Two strategies from indeed.com directly compare your product with your competitors to show how yours 

is better or unique. This positioning strategy focuses on differentiating your product from the competitor’s products.

Based on that differentiation, you may also price the product higher or lower than the competition.

 

Positioning Based On Function

 Positioning should be based on its use or function. For example, different services

for the product in different seasons. Or other uses for the product for different kinds of jobs.

Expanding the use may change the targeted customer. 

Influentials and ambassadors. This is when a brand is associated with a celebrity 

and can be a compelling endorsement. Think Michael Jorden for Nike or Tom Cruise.

Depending on your budget, key influentials can be local or national.

 

 Why Is Positioning Important 

 

Positioning is about much more than just your content marketing strategy or

the design of your website. Done with care and a well-crafted position, it can help you:

Build brand awareness and reach new customers

Build brand loyalty among your existing customers

Create a stronger value proposition

Be more consistent in your messaging across marketing, sales, customer service, Etc.

 

Conclusion

 

Market or brand positioning allows a company to differentiate itself from competitors.

This differentiation helps your business increase brand awareness, communicate value, and justify pricing, impacting your bottom line. 

 

Your positioning strategy is a marketing plan that determines where your business stands in the overall market and

how you should be positioned to attract more customers.  A successful positioning strategy helps

companies become an authority in their field, distinguish themselves from competitors

for better brand recognition, or even create new markets by identifying unmet needs among consumers.  

 

Positioning influences what customers think of your company, brand, or product. Still, it will not convince

someone of a concept they don’t agree with or believe. Therefore, your positioning must align with the

already-established beliefs of your customers and your strategy constructed around this.

Think about this:  If you are not the category leader, can you set up a category where you can be the leader? I would love to hear how it works out.

Strategies For Competitive Markets

Posted on by harborcapitalgroupinc

 

Strategies For Competitive Markets

Customers demand that businesses give them something new in our constantly changing world.

 

The way to do that is with innovative strategies. However, this results in releasing more than 30,000 unique products each year

—and about 95 percent fail, according to Harvard Business School professor Clayton Christensen.  

At the same time, many businesses need help coping with a fiercely competitive marketplace

or need to rely more on current customers. Some are reluctant to make changes because of potential risks.

The solution to many of these problems is incremental innovation –

– rather than radical or disruptive innovation– to improve their value proposition continuously and, subsequently, their overall results.

 

What is incremental innovation?

 

Incremental innovation is a series of a company product or service improvements.

There are two basic types of innovation: incremental and radial. 

Incremental innovations are when companies make small changes to existing products

through incremental improvements to the business model to improve customer retention and marketing.

These developments also help improve efficiency, productivity, and competitive differentiation. 

Radical innovations transform the business model altogether. It transforms an existing system,

design, or invention into something new. These innovations can change parts of the system or the entire product process.

Radical innovators create an entirely new market for their products.  

However, only some products or procedures are brand-new ideas. Most new product

s are alterations or new applications of existing products, with some twist in design, function, portability, or use. 

For example, Apple didn’t invent the mobile phone but kept innovating it over the years.

Now it’s one of the world’s most profitable companies.

 

In a large study by McKinsey & Company, they were told by business leaders that many companies

were putting less emphasis on radical innovation and more focus on incremental innovation. 

These companies focus on improving their significant products, exploiting known opportunities, conserving cash, and minimizing risk.  

However, they concluded that more urgent actions are required in turbulent times. For example,

  1. Adapting their core products and service to meet changing custom

2. Identify and quickly respond to opportunities created by these market changes

3. Restart their innovative programs and allocate resources as needed

4. Develop products and services to be ready for post-crisis recovery.

 

 Examples of Innovation Strategies For Competitive Markets

 

Gillette had created and patented a unique razor handle and inexpensive replacement blades.

They upgraded the handles with innovations like pivoting heads. When the patented handle expired,

they replaced the expensive handle with a cheaper one and sold “improved,” more expensive blades.   

Coca-Cola has been innovating and staying relevant with line extensions for over 100 years.

For example, Cherry Coke, Coke with lime, and Diet Coke. They have remained relevant as trends change.  

Apple iPhone was introduced in 2007 with few features. Here are a few examples.

From small metal flip phones to glass with touchable features, from 3G to 5G to small phones to large,

multipurpose phones with cameras to thousands of apps so you can even do your banking on the phone, 

 

 Focus On Your Entire Business Model

 

Often, incremental innovations focus on the company’s specific product or service. This focus is fine,

but I suggest starting with your business model and examining every area within that model

— plus your competitor’s business model. Look at every value proposition of your offering, brand, and more.

Another strategy is to set up a schedule for each iteration. When implemented, you will have a period of exclusivity.

Then hit your competitors with another significant improvement.

When you have gone through your entire business model, your competitors will find it difficult to copy your value-price offering. 

Or look at improving just two or three areas and implement them.

Then come back and innovate another two or three areas several months later

and not only impress your customers but also drive your competitors crazy and make it hard for them to copy you.

 

Creativity

 

Entrepreneurs work with two types of thinking. Linear thinking—sometimes called vertical thinking

—involves a logical, step-by-step process. In contrast, creative thinking is more often lateral,

in which established logical thought patterns are purposefully ignored or challenged. 

According to Wikipedia, lateral thinking indirectly solves problems using a creative

approach where the reasoning process is only sometimes obvious. It involves ideas that may take time to be noticeable. 

Lateral thinking involves ideas that may only be obtainable with a step-by-step approach.

It solves problems using an indirect method. Rather than going from A directly to B,

you start from a different place, not on the A to B road. 

You begin at location C, which is lateral (at an angle) to the A to B road.

This process causes your mind to think of new, different ways to reach your destination at B.

It is a powerful way to generate very creative ideas. You can learn more about lateral thinking

from Edward De Bonos’ book, “The use of lateral thinking,” or our blog on lateral thinking.

Edward De Bono also links lateral thinking to humor, where your mind has to switch from

a familiar pattern to an unexpected one that generates surprises and new insights.

This innovative thinking process is a powerful creative tool worth your time learning.  

 

 The Benefits of Incremental Innovation 

 

Instead of risking radical innovations, many companies are now pouring their development

budgets into incremental innovations. Also, many customers prefer upgraded products

over radical new products. This incremental strategy gives the company additional cash to work toward radical innovations.   

An incremental innovation strategy enables you to retain your market share by staying relevant.

But you also have to understand what your clients want. For example,  

 Incremental innovations allow you to stay ahead of your competition while taking negligible risks

and using limited financial resources. Customer satisfaction with your offering creates customer retention. 

Radical innovations are essential to an organization’s long-term strategy,

but short-term upgrades to existing products keep customers interested in your business.

 

If you keep the products you have now without keeping them up to date,

you could be in trouble as the economy and markets change in the future.

 

Conclusion

 

With our constantly changing economy and a competitive marketplace, the solution is

to develop an incremental innovation strategy. These small and often frequent changes help improve efficiency,

customer retention, and competitive differentiation. Apple is a perfect example of how to do it.  

When looking for areas to improve, be positive in your approach. Don’t focus on problems.

Focus on the opportunities that will result from your efforts. Also, broaden your perspective and use both vertical and lateral thinking skills.

The benefits from this incremental innovation can be powerful and include:

Staying relevant to your market, Improving your growth with minimal risk, and retaining clients longer.

Protect yourself from a changing economy and marketplace. Innovative Strategies For Competitive Markets

 

Steps To Create Incremental Innovations?

 

Step One: Start by studying your current customers and competitors. Include their business models.

Step Two: Look at all the modules in your business model. Don’t ask, “What’s wrong?”

Ask, “How can I make this module (product, price, performance, Etc.) better?

When you are looking for ideas, keep your questions positive. Focusing on the positive will result in positive answers. 

Step Three: Select a reachable, measurable objective and do the research needed to expand that objective. 

Step Four: Get several ideas for each module. The more modules you examine,

the stronger your innovation will be. Select which idea you will implement

(this may be challenging because you may only be able to execute some of your ideas simultaneously.

Step Five: Make sure you have the time and resources, test it, then iterate and try again.   

Cheers.    Jim Zitek

You should take a look at these blog posts also:

Innovative strategies that create revenues

Harborcapitalgroupinc.com

Incremental Innovation For Competitive Markets

Posted on by harborcapitalgroupinc

Incremental Innovation For Competitive Markets

 

In our constantly changing world, customers demand that businesses give them something new,

which results in the release of more than 30,000 unique products each year —and about 95 percent fail,

according to Harvard Business School professor Clayton Christensen and (northeastern.edu)

At the same time, many businesses need help coping with a fiercely competitive marketplace

or need to rely more on current customers. Some are reluctant to make changes because of potential risks.

The solution to many of these problems is incremental innovation — rather than radical or disruptive innovation

— to improve their value proposition continuously and, subsequently, their overall results.

 

What is incremental innovation?

 

Incremental innovation is a series of improvements to a company’s existing products or services.

There are two basic types of innovation: incremental and radial.

Incremental innovations are when companies make small changes to existing products through incremental improvements

to the business model to improve customer retention and marketing.

These developments also help improve efficiency, productivity, and competitive differentiation.

Radical innovations transform the business model altogether.

It transforms an existing system, design, or invention into something new.

These innovations can change parts of the system or the entire production process.

Radical innovators create an entirely new market for their products.

However, only some products or procedures are brand-new ideas.

Most new products are alterations or new applications of existing products, with some twist in design, function, portability, or use.

For example, Apple didn’t invent the mobile phone but kept innovating it over the years.

Now it’s one of the world’s most profitable companies.

 

 In a large study by McKinsey & Company, they were told by business leaders that

many companies were putting less emphasis on radical innovation and more emphasis on incremental innovation.

These companies focus on improving their major products, reviewing known opportunities, conserving cash, and minimizing risk.

However, they concluded that more urgent actions must be taken in turbulent times. For example,

Adapting their core products and service to meet changing customer needs

Identify and quickly respond to opportunities created by these market changes

Restart their innovative programs and allocate resources as needed

Develop products and services to be ready for post-crisis recovery.

 

  What Are Some Examples of Incremental Innovation

 

Gillette had created and patented a unique razor handle and inexpensive replacement blades.

They upgraded the handles with innovations like pivoting heads. When the patented handle expired,

they replaced the expensive handle with a cheaper one and sold “improved,” more expensive blades.

Coca-Cola has been innovating and staying relevant with line extensions for over 100 years.

For example, Cherry Coke, Coke with lime, Diet Coke, Etc. They have managed to be relevant as trends change.

Apple iPhone was first introduced in 2007 with few features. Here are a few examples.

From small metal flip phones to glass with touchable features, from 3G to 5G to small phones

to large, multipurpose phones with cameras to thousands of apps so you can even do your banking on the phone.

 

Focus On Your Entire Business Model

 

Often, incremental innovations focus on the company’s specific product or service.

This focus is not a problem, but I suggest starting with your business model and examining every area within that model —

plus your competitor’s business model. Look at every value proposition of your offering, brand, and more.

Another strategy is to set up a schedule for each iteration. When implemented, you will have a period of exclusivity.

Then hit your competitors with another significant improvement.

When you have gone through your entire business model, your competitors will find it difficult to copy your value-price offering.

Or look at improving just two or three areas and implement them.

Then come back and innovate another two or three areas several months later and

not only impress your customers but also drive your competitors crazy and make it hard for them to copy you.

 

Creativity

 

Entrepreneurs work with two types of thinking. Linear thinking—sometimes called vertical thinking—

involves a logical, step-by-step process. In contrast, creative thinking is more often lateral,

in which established logical thought patterns are purposefully ignored or challenged.

According to Wikipedia, lateral thinking is solving problems indirectly using a creative approach

where the reasoning process is only sometimes obvious. It involves ideas that may take time to be noticeable.

Lateral thinking involves ideas that may only be obtainable with a step-by-step approach.

It solves problems using an indirect method. Rather than going from A directly to B, you start from a different place, not on the A to B road.

You begin at location C, which is lateral (at an angle) to the A to B road.

This process causes your mind to think of new, different ways to reach your destination at B.

It is a powerful way to generate very creative ideas.

You can learn more about lateral thinking from Edward De Bono’s book, “The use of lateral thinking,”

or from our blog on lateral thinking.

Edward De Bono also links lateral thinking to humor, where your mind has to switch from

a familiar pattern to an unexpected one that generates surprises and new insights.

This innovative thinking process is a powerful creative tool worth your time learning.

 

 The Benefits of Incremental Innovation 

 

Instead of risking radical innovations, many companies are now pouring their development budgets

into incremental innovations. Also, many customers prefer upgraded products over radical new products.

This also provides the company with additional cash that allows them to work toward more radical innovations.

An incremental innovation strategy enables you to retain your market share

by staying relevant. But you also have to understand what your clients want. For example,

 Incremental innovations allow you to stay ahead of your competition while taking negligible risks and using limited financial resources.

Customer satisfaction with your offering creates customer retention.

Radical innovations are essential elements of an organization’s long-term strategy,

but short-term upgrades to existing products keep customers interested in your business.

If you keep the products you have now without keeping them up to date,

you could be in trouble as the economy and markets change in the future.

 

Conclusion

 

With our constantly changing economy and competitive marketplace,

the solution is to develop an incremental innovation strategy.

These small and often frequent changes help improve efficiency, customer retention, and competitive differentiation.

Apple is a perfect example of how to do it.

When looking for areas to improve, be positive in your approach. Don’t focus on problems.

Focus on the opportunities that will result from your efforts.

You get what you focus on. Also, broaden your perspective and use both vertical and lateral thinking skills.

The benefits from this incremental innovation can be powerful and include:

Staying relevant to your market.

Improving your growth with minimal risk.

Retaining clients longer.

Protecting yourself from a changing economy and marketplace

To get a substantial update, innovate two or three business model modules.

I would love to hear how it works out.

Steps To Create Incremental Innovations?

 

Step One: Start by studying your current customers and competitors. Include their business models.

Step Two: Look at all the modules in your business model. Don’t ask, “What’s wrong?”

Ask, “How can I make this module (product, price, performance, Etc.) better?

When you are looking for ideas, keep your questions positive. Focusing on the positive will result in positive answers. 

Step Three: Select a reachable, measurable objective and do the research needed to expand that objective. 

Step Four: Get several ideas for each module. The more modules you examine,

the stronger your innovation will be. Select which idea you will implement (this may be challenging

because you may only be able to execute some of your ideas simultaneously.

Step Five: Make sure you have the time and resources, test it, then iterate and try again.   

 

 

 

 

 

How Innovative Strategies Drive Sales

Posted on by harborcapitalgroupinc

Innovative Strategies Make Sales

Why innovative strategies to drive sales are critical and how you can create one.

 

 The Situation 

  A constantly changing future 

According to research by McKinsey, more than 80 percent of CEOs at large U.S. firms believe

innovation is crucial for their company’s future success.

Yet, many of these organizations need an effective innovation strategy.

As technology advances, so too does the pace of change. Your industry doesn’t matter —

the choice is the same for all companies: you need innovative strategies to drive sales or get left behind. 

Unfortunately, many business leaders believe they have a strategy when what they have is a goal.

But, a goal without a strategy is simply a wish. To be successful, you need to turn your goal into a reachable and measurable objective.

And this objective could be –in descending order–a corporate, market, product, or marketing strategy. 

You need to identify the top one or two critical problems and the pivot points you can use to multiply your effectiveness.

Then focus and concentrate actions and resources against those pivot points.

To do this, you need a strategy that creates a pathway to show you how to achieve and maintain your goals in our rapidly changing environment.

 

What Is An Innovative Strategy?

A brief description and example.

An innovation growth strategy is a clearly-defined plan a person or team must perform to achieve

the company’s growth and future sustainable goals. While all innovation strategies are different,

they should outline the objective of your organization’s innovation activities to help you achieve your objective.  

 

The Harvard Business Review describes creating an innovation strategy as determining how innovation will create value

for potential customers and ways to capture that value. Plus, which types of innovation to pursue?

Product designs must evolve to stay competitive, and innovation strategies must evolve as the environment changes.

Good business innovation strategies must be simple, straightforward, and easily understood by all participants.

You want everyone on the same page. And if it is a product or marketing strategy, your innovation strategy must sync with your overall business strategy.

Suppose you maintain your traditional way of business because “that’s the way you have always done it,'”

sooner or later. In that case, that Strategy will have you in trouble.

Think Kodak and their inventions of digital photography or Blockbuster’s unwillingness to give up their retail stores and go to streaming.

 

 The Difference Between Tactics And Strategy  

These terms are not interchangeable.   

Strategy and tactics are very different, although they are often used interchangeably.

Strategies are solutions to problems (objectives) and refer to long-term objectives. Tactics refer to the specific actions required to achieve those objectives.

 

Three levels of Innovative Strategy

The process is the same, but the three levels must be coherent.

There are three levels of Strategy: Corporate, business (units), and functional (departments).

Corporate: Senior management determines the company’s mission and long-term performance.

They guide decisions about growth, acquisitions, diversification, and investments.

Business:  These strategies integrate into the corporate vision but focus on specific companies.

They focus on turning business objectives into Strategy and how the business will compete in the marketplace.

Functional. These strategies determine how the functional departments like production, marketing, R&D, H.R.,

and other departments will support the corporate and business Strategy.

   

The Key Elements Of Innovative Strategies That Drive Sales

The process of analyzing and creating a strategy

 

Strategies vary in depth and complexity depending on their objective. The following are the critical components of most strategies.

There are many different ways to analyze and create a strategy.

I am using a description and explanation from Professor Richard Rumelt’s book Good Strategy/Bad Strategy

that is easy to understand and use. They offer a simple understanding of a complex subject.  

It starts with a vision, aggressiveness, and key objective or problem.

Here, your purpose is to determine the key (not multiple) objectives that must be solved to meet your goal.  

 

Then you need to diagnose the problem or obstacle preventing success.

This research will be extensive and include many types of analysis, such as SWOT analysis,

market analysis, potential customer analysis, competitive analysis, industry analysis, and much more.

 

We cover more of these research techniques on our website and our online ClickVisor Program.

This step takes time, but it is critical and necessary. 

 

This analysis also includes trends, opportunities, and potential issues that will or could impact the market positively or negatively.

A few examples: Design (BMW), chain-link systems (Walmart), and anticipation (Toyota and hybrid technology).

Ignoring trends can be harmful also (Kodak).

 

Insight and Innovation. Analyses look backward from yesterday’s data, which is necessary.

But, you also have to look forward to where the diagnosis can lead to creativity, insight, and innovation to create a solution to the problem.

Our minds a wired for creativity, and there are many techniques to help create “out-of-the-box ideas.

We also cover these kinds of techniques in our ClickVisor program.

 

The Guiding policy. The guiding policy is the approach chosen to cope with or overcome the identified obstacles in the diagnosis.

It’s what the company will do and will not do because of limited resources (time, talent, and money).

 

Coherent actions. These are the coordinated actions required to carry out the guiding policy.  

 

Types of Innovation

Sustaining and disruption

 

What is sustaining and disruptive innovations? According to the Harvard Business Review, Business innovation can be sustained and disruptive.

Sustaining innovation continues to improve a company’s products, processes, and technologies within its existing market.  

Disruptive innovation is when a company introduces a revolutionary new product or service

or introduces a low-cost product or service with limited performance or limited capabilities and a much lower price. 

Or, the disruption can be aimed at a new market to gain new clients.

Think of Walmart creating a chain-link distribution system to market low-priced goods to small towns.

These innovative strategies to drive sales are essential considerations if you want to be more than just competitive.  

 

 How To Create A Business Model

What they are and how to use them

 

A business model lets you visualize the company’s components and overall concept.

Strategyzer.com’s famous business model canvas (template) includes nine elements:

customer segments, value propositions, channels, customer relationships,

revenue streams, key resources, key activities, key partnerships & cost structure.

This illustration is a copy of Strategizer’s business model canvas.

undefined

In addition to the nine key components you control, it has four elements you do not control (competition, market, industry,

and government regulations). Still, it is equally crucial for strategists to consider.

Update regularly, or the company might miss future trends or challenges.  

 

 

Types Of Business Models

Following are a few more common models

 

There may be 50 or more different business models that companies use.

Many of which you already know. Following are a few to illustrate the variety of models.

E-Commerce or internet commerce is buying and selling goods or services using the internet.

Direct Sales involves selling a product directly to the consumer. That means there are no retail centers for companies that adopt this model. 

Subscription business models charge consumers a subscription fee to access a service.

The razor blade model sells an inexpensive yet durable product, below cost, to capture higher margin disposables over a long period.   

The Pay-as-you-go model is exactly as the name implies. You are pre-purchasing a certain amount of something, such as cell phone minutes,

and you are charged your actual usage at the end f the booing period. 

Freemium models give you a free product or service and charge for premium features or services.   

 Brokerage models connect buyers and sellers and help facilitate a transaction.

They charge a fee for each transaction to either the buyer or the seller, and sometimes both.

 

Business Model Innovations  

Here are a few ways to approach business model innovation.

 

You can achieve innovation through any nine business units,

like a new or improved product or improving your value proposition. 

Business models give you a visual concept of your business and enable you to imagine many different

ways to take the model apart and put it together differently and more effectively.  

Or if you have a problem in one area, like a product not performing, you can focus on that problem

and develop solutions and see how those would work within your business model.

Check out our blog post: Want a creative solution to an unsolvable problem?

With innovative strategies to drive sales, you will come up with different potential solutions

and will need to decide which possible solution is the best. 

 

Or, if you have a fiercely competitive market, you should examine each unit of your business model

to see how you add or eliminate parts to make that unit more effective or reduce costs or value to the entire business model. 

If you reimagine and innovate each unit, you will improve your value proposition

and make it difficult for your competitors to copy what you have accomplished.

Or, if your market growth is slowing, you may want to change your business model with different products or services

or expand your marketplace beyond the traditional industry or market to convert current non–buyers into new buyers.

Or, you can create a business model canvas for each of your competitors to see

where their strengths and weaknesses are –and if they change over time — so you can improve your position or anticipate future changes.

Net: you will need to create innovative strategies to drive sales.

 

  Innovative Strategy Benefits

Seven significant benefits of having an innovative strategy to drive sales.

 

To start, think about this: what if you took the opposite view?

How would you compete in the marketplace if you didn’t have a strategy?

You wouldn’t know where you stand or where you are going.

Answer: having a strategy is critical to a company’s success. Following are some of the benefits of having a strategy.

Creates A Competitive Advantage. An innovative strategy enables you to improve every aspect of your business model.

This Strategy allows you to maximize your resources, reduce unnecessary costs, improve your value proposition,

and create a competitive advantage that would be difficult for the competition to copy. 

 Improves Your Financial Success. A strategy requires you to review your costs and eliminate any unnecessary charges.

It also requires you to look for ways to enhance your offering, add premium pricing, create new offerings, or even enter new markets.

It enables You To Make Better Decisions. Because you are analyzing your current situation and creating a vision for the future,

you will use your experience and critical thinking skills and broaden your perceptions of the

company, industry, markets, products, and services. This type of analysis will enable you to make better decisions.    

It helps Build Your Brand. Because of all your work in preparing your Strategy,

you know who you are and who your audience is; you can create a distinctive and memorable brand.

Plan For Today And The Future. To create a strategy, you must identify the key steps to reach your goals.

This requires you to define and evaluate your company and your offering (value proposition’s) strengths and weaknesses

to determine what, if anything, has to improve or be eliminated.

It also helps you plan and allocate resources more efficiently and anticipate resource requirements

that will be needed in the future. You will have to challenge some entrenched assumptions to do this.

Improves Your Organization And Processes. A strategy helps you organize the company to support your values

and help you reach your goals. It can get your entire organization on board and focused on

helping execute the tasks needed to reach your goals. This focus is vital because the execution of your Strategy is as important

as the Strategy itself. Poor execution — rather than the Strategy — is a significant reason plans fail.

It gives Management Control and Reduces Risks. A strategy gives you control over

all activities that affect your goals and let you measure progress toward those goals.  

 

Conclusion

 

About 80 percent of companies believe strategies are essential, and many believe they have a strategy.

Unfortunately, few do. What they have are mission statements and goals.

But goals are wishes unless you have an innovative strategy to drive sales, so you have a pathway to achieving that goal.

An innovative strategy describes how the company will capture the new or additional value and which types of innovation to pursue.

There are also three innovative strategy levels: corporate, business, and functional (department responsibilities).

A business model canvas is a conceptual structure that explains the viability of the business

through the company’s essential nine components. Companies may use 50 or more different business models—

many of you already know- like E-commerce, subscription, and direct sales.

Business models are essential for both new and established businesses.

Also, you must update regularly, or the company could miss future trends or challenges.  

 

The way to approach business model innovation depends on the company’s situation.

Does it have a significant problem preventing it from achieving its objective, or does it need to break out of the competitive market,

or the company’s market is slowing down, and it needs to find new buyers?

 

There are seven significant benefits to having an innovative strategy.

It creates a competitive advantage, improves financial success, enables leadership to

make better decisions, helps build your brand plans for the future,

enhances the function of your organization and gives management better control, and reduces risk.

 

The First Five Steps To Your Business Strategy Journey.   

 

Go through the five steps below and begin to question and probe for answers to each question.

It will take some time to prepare an overview of how you will approach putting together your business plan.

Thistiewill be well spesnt. On the other hand, set a time limit for getting this done. Don’t delay all the benefits that result from a business strategy. 

Step One: Establish a plan to keep up with the constant pace of change in your marketplace. Involve your team.

If you have three people, you will get three different answers to the questions and other responses to future suggestive ideas.

It would be best if everyone were on the same page when you executed your proposed strategy.   

Step Two: Determine the overall objective of your future strategy. How aggressive do you want to be?

Do you have a specific problem to solve or an opportunity you want to achieve?

Are you looking for an incremental or radical program?

Step Three: Go through the first three steps in creating your strategy: define your objective

– which has to be the most critical objective, –it has to be achievable and measurable.

Then, diagnose the problem/opportunity– you only need information that helps you solve the problem, not an encyclopedia.   

Step Four: Determining your general policy. This step is difficult because it means saying no often.

After all, you have a concept you want to implement and limited time, talent, and money to do everything,

so saying no to additional ideas is challenging. Then, put your plan together on how you will execute this strategy.

Step Five: Monitor and measure the results of your programs and adjust as often as necessary.

This strategy program is a work in progress, so there will be many starts, stops, and rewrites.

Try out some strategy ideas, and let me know how they worked out for you.

Jim Zitek

Innovative Strategies Make Sales

 

Strategies Make Your Marketing More Effective

Posted on by harborcapitalgroupinc

Growing pot of flowers demonstrates how strategies generate results

Want To Make Your Marketing More Effective?

Close the efficiency gap between strategy and marketing 

Reaching revenue goals, for most companies, is very difficult. According to Reflektive.com, 90 percent of companies do not meet their goals. Why?

They do not have an effective business growth strategy.

There is often a gap, difference, or disconnect between the business growth strategy and the company’s marketing messages.

They are often not identical. Consequently, this gap damages sales and marketing results.

To close that gap, you must first create business growth strategies to generate revenues.

Why? Because your business strategy is your story. Marketing is how you tell that story. 

 

A strategy looks simple when you look back at it.

Here are a couple of examples:

BMW designs, engineers, builds, and sells “The Ultimate Driving Machine” (for that unique slice of the upscale car market).

Walmart: “Save Money. Live Better.” They created a strategy to chain-link an operating system

to get the population density needed to serve small towns with brand choices and lower prices in larger city stores like K-Mart.  

Netflix: “See What’s Next” anticipated the power of cloud computing and its ability to reach individual computers and individuals.

They pivoted from a disc rental company and created a new video-streaming strategy for the world’s homes and businesses.

 

Today, business growth strategies must generate more revenues.

Market boundaries do not have to stay permanent. 

Most business leaders accept market boundaries and industry conditions are fixed.

The assumption is that it’s always been that way.

Therefore, you must strategically choose between differentiation OR low cost to succeed.

But you can’t do both: add value AND lower costs.

This belief hurts product and market innovation for companies in very competitive markets.

We have learned from professors and strategists like Richard Rumelt’s Good Strategy/Bad Strategy

to rule breakers like Chan Kim and Renee Mauborgne‘s insightful Blue Ocean that this belief is false.

You need to be more creative.

What is true is that strategies have been crippled by believing this value–cost trade-off rule is impossible.

Consequently, this viewpoint narrows your perspective and limits your potential product and market opportunities.

We are not just talking about creating disruptive technologies.

We are talking about competing in very competitive markets.

 

You can shape your market boundaries.

Innovative strategies enable you to create your own boundaries to generate revenues.

You can shape your market boundaries and target customers,

creating differentiation (more value) and lower costs. Here are a few examples:

Southwest Airlines broke the industry “hub and spoke” model and flew direct routes to smaller airports.

They have been the only consistently profitable U.S. airline since its inception.  

Apple broke the industrial computer market by introducing a beautiful, easy-to-use computer for individual consumers.

That worked pretty well.

CitizenM Hotel created a “five-star hotel” experience with four-star prices

by eliminating the things “five-star” customers didn’t care about,

like lobby check-ins and a concierge service.

And then added in items they did care about,

like King size beds, better mattresses, cotton sheets, and better pillows.

As a result, customers told their friends, and the hotels became an instant success.

 

Disruptive technologies’ successes often go viral.

More money is made from adapting those technologies

New technology is important and disruptive technology is and should be well rewarded.

But history shows that “big” money comes from applying technology and creating new strategies and markets.

Some popular examples from the New York Stock Exchange are

Apple, Google, FaceBook (Meta now), Airbnb, and others exploited the new technologies. 

Therefore, if you have an open mind and a broad perspective, you can change how you see opportunities.

You can go from fighting fierce competition to creating a bigger market.

A market consisting of current buyers and previously ignored nonbuyers

who become buyers because of your unique, new business growth strategy.

 

  Are you tired of constantly fighting your competition?

Take your company to the next level with an insightful strategy.

If you are willing to entertain new ideas and are committed to involving your team, you can make it happen.

 Getting started on your insightful new business growth strategy could put you ahead of your competition.

About 70% of companies say they have a strategy, but only a few have an actual strategy.

The problem is their definition of strategy is goals or a mission statement.

Goals are mostly wishes without a strategic plan on how to achieve them.

 

Unfortunately, only 15% have real, achievable, measurable, specific strategies.

And of these companies with real strategies, about 40% still miss achieving their objective. Why?

Not because of the strategy but because the execution of the strategy is often neglected for many different reasons.

So, having a strategy AND executing it are important.

Also, because execution takes time, it can lose its priority. Success takes a long-term “team” effort.

On the positive side, if the team is included in the process,

they will become more excited as the execution becomes more and more of a reality.

Conclusion

You will be ahead of most of your competitors just by starting your journey toward an effective business growth strategy.

Looking forward can seem daunting at first.

But, once you see your strategy, if done right, looking backward, the strategy looks simple and easy.

Even though the world is getting more complex and seems to be moving faster, we can help make it as easy and effective as possible.

If you have an open mind and broaden your perspective,

you can shape your marketing boundaries by creating differentiation AND low cost.

 

 

How Much Can You Spend To Get A New Client?

Posted on by harborcapitalgroupinc

Customer Lifetime Value (CLV) is an important business metric. It is the total revenue your business earns from a customer over time. It gives you a picture of the business’s short-term, and long-term status and financial viability. It is also an indicator of product-market fit, client loyalty, and recurring revenue from existing customers. You can’t continue to improve if you don’t measure.

Know what your customers will spend over time

CLV gives you an understanding of the costs and profits of your business as it relates to acquiring, generating revenues, and retaining customers. Also, getting repeat orders from existing customers brings in a healthy cash flow regularly into the business. When you know what a customer will spend with your business over time, you can consider more options for your acquisition budget. 

Two basic ways to calculate CLV

There are two basic ways of calculating CLV, depending on what data you have available.

1 Accumulated data

If you have historical sales data, this method is far more accurate. It puts together all orders by individual customers to get their own real CLVs. 

2 Average estimate

If you don’t have granular data, you can estimate an average by the following formula: Average order value times number of orders per year.

How to calculate Customer Lifetime Value

For instance, if your customer base will, on average, buy ten times per year at $10 per transaction (or $100 per year) for ten years, the lifetime value of a customer is $1,000 (minus costs). If your profit is 25% of sales, the CLV is $250 (25% of $1,000). Therefore, you could technically afford to spend $250 to attract a single new customer. However, many marketers suggest that you do not spend more than 33% of CLV or, in this example, would be $82.50.

Another view. If you could improve each of the three CLV numbers by 10%, you would increase profits by 33 percent, giving you a profit of about $332 (plus $82). This additional profit could then be added to your marketing budget to grow even faster the following year.

 Now, how can you improve each element of your Customer’s Lifetime Value? 

Now that you know the lifetime value, you want to spend some serious time examining how you can improve your revenues and profits. This information will also give you a long-term look at your business and help you plan for the future. To improve your results, you should do the following things sequentially: 

  1. Increase the dollar amount of each sale to a customer. 
  2. Increase the frequency that customers purchasing from you. , 
  3. Try to increase the number of products or services you provide for your customers.
  4. It gives you a customer feedback loop so you can improve customer service
  5. Build customer loyalty
  6. Analyze and improve customer pricing
  7. Better target your customer through segmentation
  8. It helps you plan both short-term and long-term strategy
  9. Then, you can begin to increase your market share by going outside — to increase your market share by working on your competitor’s customers.

This process also forces you to look at different market and customer segments. For example:

  1. Who are your best customers and worst customers using CLV? How can you get more of the good customers and maybe fewer of the lower-value customers? 
  2. Which products provide the most revenue and profits? Can you add value to your products and increase the price?  
  3. Which industry or market segments provide the most or least CLV? Are you in the best markets, best niches and aiming for the best clients?

You also want to generate many alternative ways to increase your Customer Lifetime Value. 

Now, you can focus on developing many alternative ideas and practices to increase your CLV. You want to focus on your overall business strategy, potential innovations, and marketing strategy. More information is available on our ClickVisor program to help you accomplish these crucial tasks.  

Consider Multiple Marketing Approaches

This process also requires you to expand your marketing approaches based on the industries, segments, and types of customers. It is also a good idea to have more than one marketing approach that you continue to use long term. You need to try and test different approaches as the world and people change. 

 Customer Lifetime Value will change as you create and implement new programs.

As you implement your marketing program, this lifetime value should change as the variables in the process change. So, reviewing your CLV regularly make sense. It will cause you to rethink many things you’re doing as you always look for ways to improve that number. 

Conclusion 

Client Lifetime Value is an essential concept for every business. It goes hand in hand with customer repeat orders and retention. It is also a great concept to broaden your thinking about your company and its mission. Plus, businesses with a high CLV can service their client better and grow continuously over time.

 

How To Make Better Decisions, More Often

Posted on by harborcapitalgroupinc

Make Better Decisions, More Often

In a survey of top executives, the results showed that executives made “sound decisions” only 52% of the time.

That’s only 2% better than flipping a coin. So if you could improve just a few percent, you could be in an elite class of decision-makers.

Why only 2% better than flipping a coin? There are three reasons:

1. Their extensive industry knowledge and expertise.

2. Their reliance on analysis and critical thinking

3. Their limited perspective.

Industry knowledge and expertise

By the time you become the decision-maker, you have accumulated extensive knowledge and experience in your industry, market, products, and services.

You have talked to many customers.

You know how what works and what doesn’t work.

You have established patterns and processes and probably have established a culture of how we do it here.

Don’t limit yourself  to your expertise and your built-in biases

While all of this is necessary, it has also established automatic patterns of thought, which you can refer to quickly.

And at the same time, it limits your ability to think outside of your industry and market to understand how other markets and industries think about the problem or opportunity.

So they decide based on past thinking rather than exploring new ways to think about the problem or opportunity.

Hearing about how different markets do something can often give you additional ideas on how

you might also use this idea or process to solve a problem or improve their strategy, product, or service.  

Overreliance on analysis and critical thinking

Most people were taught that if you gather enough information and analyze the data thoroughly,

you will develop “the way” to solve the problem or create a better way forward.

Ufortuanlly, this does not often work because the data you are analyzing is all about the past, not the future.

So, if you need to move forward into the future, all those old solutions and ideas will not work.   

The Critical Thinking Process

Critical thinking is a good process and should be used, but the object of critical thinking is to judge whether the information you have is correct or not.

It is undoubtedly important to understand the problem or opportunity,

but it will not help you look into the future to solve this new problem or exploit this unique opportunity.

Another view

Here’s an article from Forbes if you want another view.  

Here is the caution when dealing with averages and human behavior data.

As you know, there are many variations in personal values within that average.

So, if you are thinking about behavior, be sure to take into account all the possibilities that data includes.

Market segmentation and psychographies will help get your thinking started.

Here is a traditional view of critical thinking from the Critical Thinking Organization.

Limited perception

The first and maybe most important thing you need is to see the problem or opportunity. In other words, your perception.

It is your perception that will help you design a solution. One of the best ways to explain this is with an example.

Here’s an example from Edward de Bono.

A group of 12-year-old boys was always picking on Bobby, one of the boys. Because that is what they do at that age.

One day, they showed Bobby two coins, a larger one worth one dollar and a smaller one worth two dollars, and they told Bobby he could pick one of the coins and keep it.

Bobby picked the larger coin, and of course, the other boys laughed and talked about how dumb Bobby was.

They made this offer every time they wanted a good laugh at Bobby’s expense. 

One day an older man saw what they were doing and told Bobby that the smaller coin was worth twice as much as, the larger coin.

Bobby said he knew that. But if he took the two-dollar coin, they wouldn’t keep coming back and giving him additional coins.

There is a distinction between a perception and a concept.

Perception is a grouping of things realized when we look out at the world—for example, a mountain.

A concept is a grouping of things discovered when we look inwardly at our experience.

A concept has a purpose or benefit—for example, a takeout restaurant.

Also, a concept always consists of both the concept and its implementation.

Conclusion

I want everyone to make better decisions more often, me included.

Expertise and analysis are essential, but you have to look forward rather than just backward.

You may also have to broaden your perception if you want to move forward.

So, your perception of the situation, which is often not considered, is critical to what kinds of decisions you will make. 

PS.  If this information helped you with your decision-making, let me know how it helped (or did not help) so we can help others.

 

How To Define And Solve The “Real” Problem

Posted on by harborcapitalgroupinc

We’ve all been there—several people discussing the problem that needs to be solved to meet the goal. But the challenge is that different people have different definitions of the “real” problem. This short blog post, taken from Michael MIchalko’s book, Thinkertoys, will help you end that uncertainty. It will help you identify and prioritize problems and convert them into specific challenges using creative thinking. I have condensed this to keep it as short as possible for this blog post.

Start with a list of problems.

Start by making a list of the problems that need to be solved. Following are a few examples. How can I increase revenues by 20% this year? How can I cut costs and increase production? How can we better differentiate our product from our competitors? How can we improve the role of the service department?

Just the act of writing your challenges down may result in some immediate ideas.

Carefully craft your challenge statement.

The more time you devote to perfecting the wording of your challenge, the closer you will be to a solution. So the next time you have a problem, write a challenge statement out, study it for a while, then leave it, change it, stretch and squeeze it, and restate it. Questions help you look at a challenge from different perspectives. Following is the blueprint for executing this statement challenge.

Blueprint

Broaden your view.

 1. Write your statement as a definitive question, beginning with “In what ways might I (statement)…?”

2. Vary the wording of your challenge by substituting different synonyms for keywords

to broaden your perspective of the problem (e.g., increase to multiply to enlarge)

Then, squeeze your view down to a very narrow, specific perspective.

1. Divide your challenge into sub-problems

2. Solve the sub-problems

3. Then, Keep asking how else? And why else?

Again, positively phrase these problems and as a question: “In what ways might I…?”

This form helps keep you from concluding what the problem is too quickly.

You want many different perceptions of the situation to see other possibilities.

Stretch the challenge

To keep your mind open to all possibilities, stretch your challenge by asking “why?“ several times. Also, asking why will help you identify your general objective and challenge your assumptions. This process will also help you redefine and reshape your challenges.

For example, suppose your challenge is “in what ways might I sell more computers?“

1. Why do you want to sell more computers? Because we need more funds to pay bills.

2. Why do you want to increase revenues? Because costs are growing.

3. Why do you want to sell more computers? Because sales are beginning to slow down.

4. Why do you want to sell more computers? To make investments in new products.

5. Why do you want to increase your sales volume? To take advantage of discounts.

Expanding your challenge gives you a broader concept of the challenge so that you can view many more approaches.

Squeeze the challenge

Once you have a broad idea of what you are trying to find, narrow the objective from the general to the specific by squeezing it. This process makes your challenge easier to solve. To squeeze a challenge, you want to discover its strengths, weaknesses, and boundaries. To do that, ask who, what, where, when, why, and how.

1. Who might have unique strengths and resources or access to helpful information

2. What helps identify all the things, objects, and items involved in the situation,

the requirements, difficulties, rewards, and advantages and

disadvantages of formulating a resolution?

3. Where considers the place? Locations or focal points of the problem.

4. When probes schedules, dates, and timeliness of the situation.

5. Why helps you reach an understanding of your primary objective?

6. How helps you recognize how the situation developed, actions that may

have been tempted or now occurring, and steps that one could take?

You’re going to do that for the larger problem and the sub-problem.

Conclusion

Going through this exercise will enable you to see all of the things you need to do to solve the problem.

Now, you can prioritize them and accomplish them one by one until you can reach your goal.

You may also have to redo your analysis as you go because things will change.

Try to go through this discovery process. The first time makes you think. But you will be surprised at the results you get.

Reverse The Customer’s Risk And Increase Sales

Posted on by harborcapitalgroupinc

Reverse risk is a technique you should test. It will make your product or service more desirable than your competitor’s.

Most companies hedge their “guarantee.” They don’t want to assume the risk. They are afraid the customer will want their money back. Yet, a solid guarantee is the easiest, most immediate way to a cash flow bonanza. 

Your “iron clad” guarantee tells your customers that you’re willing to stand by what you say. It means your customer that you are confident that your product or service’s quality will meet their expectations — but you need to make sure it does.

Suppose a customer returns the product, rather than being disgruntled, graciously and readily give them their money back. In that case, The customer will gain confidence that your word is good, making it more likely they will purchase a product from you again because it’s easy to return what they don’t want, and you will be pleasant about it.

Also, it allows you to upsell your customers. It is also a prime opportunity to find out about the product or service they didn’t like and will enable you to offer them a product or service that will better serve their needs. You can also turn a bad situation into a good one.

Here is another way to look at risk reversal

The longer the guarantee is, the less likely it is that a customer will return the product.

If the product has a 1-day trial period, you’d better believe that during those 10 days, the customer will be hypersensitive to the product or service and its performance. They want to make sure they don’t get caught post the deadline, so they scrutinize and evaluate it before the 10 days are up.

Suppose the industry norm is 50 days; set your offer apart by offering a 60-day guarantee. Chances are, the customer is going to decide whether he’ll keep your product during the first week or two. Very few would determine that maybe the product isn’t for them on the 51st day.

This risk reversal idea will work for all types of businesses. If you are skeptical, test it out and see for yourself. If you can’t do it for legal reasons, you may be able to find a different way to execute this risk reversal idea.

How can you reverse the customer’s risk when he is thinking about buying your product? This would be a great question to work on using the random word technique in the strategy module.