1. Strategy and Value Exchange: Don’t be better. Be better than the impossible. How to create more value for customers.
Contribution margin doesn’t show how much value you’ve created for the customer. It shows how much more value you’ve created compared to others.
Customer value is not measurable.
Customer satisfaction is measurable, but this is a totally different thing.
But we can evaluate customer value qualitatively by comparing it with other products.
If we ask customers to compare our products with those of our competitors at the in-depth interview, we can derive some ideas for innovation.
But they are unlikely to be disruptive.
At most, you can come up with a better version of the existing product.
But if, building on the knowledge gained from the analysis of JTBD and CJM, we ask customers to compare an imaginary, even impossible product (its description or prototype) with existing ones, we can gain valuable insights for innovation.
And then we craft a strategy based on these insights.
Try to imagine the impossible and try to be better. Even if it won’t bring you great insights, it will sharpen your strategic thinking.
2. Strategy-related terms: Net profit = Profit – Losses
You have undoubtedly heard about the Pareto Principle, aka 80/20 rule.
It states that for many outcomes, roughly 80% of consequences come from 20% of causes.
20% of your products generate 80% of your profits.
20% of your customers deliver 80% of your profits.
I see it differently.
In my experience, 20% of your products or customers bring in 100% of your profits.
50% of your products or customers generate 20% of profits.
And the remaining 30% produces 20% of losses.
Some of your customers or products bring nothing but losses.
It is crucial to consider this when crafting a strategy.
The incurrence of losses can also be part of your strategy, but only if you do it consciously.
3. Trend of the week: AI talks to AI. Who will listen?
A few days ago, The Wall Street Journal published an article titled “There’s a New Hit Podcast That Will Blow Your Mind.”
It says: “With this Google tool, you can make a show about any topic you could possibly imagine. The hosts aren’t human. You won’t believe your ears.”
It is about a new Google tool called Deep Dive.
“All you need to do is drag a file, drop a link or dump text into a free tool called NotebookLM, which can take any chunk of information and make it an entertaining, accessible conversation.”
It can turn any topic you could possibly imagine into a 10-minute conversation between the same male and female voices.
Google says they don’t have names, but they sound very natural.
And they may turn even things like a train schedule into a meaningful and amusing dialogue that can then be published as a podcast episode.
Contemplation questions:
[1] Does your strategy imply active engagement with your customers through media communication channels? [2] Do you use storytelling to convey your strategy to employees, partners, and customers? [3] Can this tool help you communicate your strategy effectively?Do you think this idea will become popular and compete with podcasts featuring live hosts and guests?
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Svyatoslav Biryulin
