CUSTOMERS FIRSTanother look at value innovation

Andries ReymerBusiness innovation coach

kmo-connect beurs, Lotto Arena

Master in Product DevelopmentUniversity of Antwerp 2006

Since 2016 at AMS as Business Innovation Coach. I assist companies in broad innovation trajectories. Currently working on a ’Value Based’ project.

Previously worked for KOMONO, PHILIPS, SIRRIS.

Expertise CenterBusiness Design and Innovation

Answer some of the most difficult questions facing managers:•How does one design global operations so they are at once effective and equitable? •How does one can stay focused on the customer and  navigate through a myriad of ways to connect, engage and communicate with customers.•What is the purpose of a corporation beyond the creation of shareholder value? •….

What we do: applied research

In this deck

• WHAT • WHY • HOW

What?

costs

price

value

customer

surplus value

profit

COMPANIES WHO STRIVE FOR SUCCES COMPETE BY SHIFTING MEANING

Barco

Compentence blindness

Company experts tend to focus on features of products that are interesting for them, but not always for customers. By doing so, they can miss the next big thing that will disrupt their business.

Commoditized customers

Going from commoditized customers, only focussed on price towards engaged customers chosing a product or service based on the value it brings for them.

Qualitative user researchQualitative user research

Methods Brief Explanation

ObservationThe researcher gets close enough to study objects to observe (with/without participation) usually to understand whether people do what they say they do, and to access tacit knowledge of subjects

InterviewThis involves asking questions, listening to and recording answers from an individual or group on a structured, semi-structured or unstructured format in an in-depth manner

Focus Group Discussion

Focused (guided by a set of questions) and interactive session with a group small enough for everyone to have chance to talk and large enough to provide diversity of opinions

Other Methods Rapid assessment procedure (RAP), free listing, photo ethnography, diary, visual anthropology, pile sort, ranking, life history (biography)…

can give you insight in what people do or think but won’t tell you about.

Because, qualitative user research

Going from assumptions to validated facts

ContextWater is worth a lot if you’re stuck in the desert for some days.

When your basement When your basement is flooded you want is flooded you want to pay to get rid of to pay to get rid of the water.the water.

In the supermarket In the supermarket where water is where water is abundant, you’re abundant, you’re choice is deliberate.choice is deliberate.

Qualitative research

“Beauty is in the eye of the beholder”Shakespeare

“Beauty is in the eye of the beholder”Andries Reymer Value

Why?

80% of innovations fail

Most innovations fail because their creators are “Putting the ‘wow’ before the ‘why'”

Mark Payne. Cofounder, Fahrenheit 212

Source: IDEO

Meaningfull innovation considers not only the technical feasibility, but values the desirability and viability aswell.

Sour

ce: D

oblin

, Del

oitte

Dev

elop

men

tThere is more than one way to innovate.

revenue from innovation

With the aim of

RAISE

and

development time

REDUCED

How?

Customer value

The only base to formulate your price in this flow is your product and the cost it represents.The value and the reaction of the customer is only a consequense of this price.

Cost plus

COSTS+

Margin=

PRICE

Cost plusChanging costsChanging forecast? 100k -> 50kObsolete stock? Bad engineering?Changing exchange rates?

Declining valueDiscounts for over stock?No innovation -> commodity?

Competition basedPredictability competitionWhat do you know from competitors?Do you know their roadmap?Is their direction the right one?Action -> reaction!

Price warNo differentiation -> commodity?Race to the bottom -> price pressure!

Customer value

In a reversed flow you have insights from your customers needs and the elements your customer values. This gives you insight in their willingness to pay what gives you a good angle towards your pricing.

Research is ongoing,want to get involved?

More information here: PROJECT VALERIE

Business value

Price realization

The research focusses on 2 major topics: price orientation and price realization.

Price orientation

Customer insightPerceived value

Next best alternative

Willingness to payValue for money

Next best alternative

Price realization

SalesPricing teamSelling value

EngineeringCreating true value

Cost to serve

We developed a scan to position yourself in this grid as an indication on your price setting and price getting capabilities.

Price realization

Business value

Curious?You want to learn more?

Get in touch!andries.reymer@ams.ac.be

Project Valerie

The project starts by building buying personas, mapping the stakeholders, discovering insights with your customers up to price and sales learnings.A new methodology is developed to create value step by step.

VALUE BASED INNOVATION

1. VALUE DETECTION

2. VALUE CREATION

3. VALUE CAPTUREProject Valerie

The methodology is based on 3 phases: value detection, creation and capture.And on 3 business elements: product, service and brand.

1,99€

Launch of new private label yoghurt with initial price setting of:

Case

Research by MIT-Sloan mgmt review

Case Considered to be a commodity in between competitors: all having the same characteristics. They found one unique feature that their target audience, mothers buying yoghurt for their little children, could relate to: the yoghurt was perceived as healthier due to the low sugar content. This gave them the opportunity to position and price the product completely different. Just below the A-brand but well above their competitors.

LOW IN SUGAR

CaseThe health benefit was highlighted and the price was set 40% higher:

2,49€Sales numbers were higher than expected and revenu was 600% more than anticipated.

So if you recognize this,know that we can help you!

www.antwerpmanagementschool.be

Andries ReymerMobile +32 472 175 504andries.reymer@ams.ac.be Andries Reymer

@AndriesReymerGet in touch!

Opening minds. Touching Souls.Energizing Business.