In almost every industry you will find a premium product, and several tiers of brands or services falling in rank there after. Their order doesn’t matter. What matters is the premium, and the non premium.
Here is what I like. Premium sets the bar, the gold standard, and the price. The market and industry of that premium product depends on these factors, for the smaller fish to survive.
But here is the catch. You can’t expect to compete with the big dogs, yet offer value on one of the key factors (quality, price, service, etc). An amazing car, but at sacrifice on service wont work. Ask the 1996 Car and Driver best luxury car of the year Mazda Millennia. Rated better than the lexus, mercedes and BMW in the class, but failed to deliver the customer service. And it did poor in sales. Mazda stunk at pampering its customers.
There are other similar stories I’m sure, but here is my point. If you cant compete on all levels, and win at the expectations placed on the premium, then dont. Find a way to better compete with the smaller fish.
Nothing wrong with being the biggest medium fish possible. Let the big fish pay for infrastructure, R&D, market research, and so on. You keep up, push the limits where you can, and focus on the ways you are different. There are a lot of cars sold in the middle to low range. Far more volume than the top cars.
Dont get me wrong, I’ll be the first to look at a new idea and ask if we can make money from it. Where are the expenses, and where is the profit. But I need to remind myself and others often, to have value first.
Try not to become a person of success but a person of value. ~Albert Einstein
Lets take a look at twitter’s newly announced plans of advertising in twitter for a great example. This week twitter announced how it will be selling ads within twitter. Its a pretty unique method. But lets step back for a second.
Twitter was free of ads, and free to users for a few years. They built up a customer base, and refined their systems. They kept it lean and mean by only offering one core service—updates. No photos, elaborate profiles, member pages, or other things that have hurt others in the past. Just updates, and a way to follow others. This added a large value to its base, and probably one key factor to its growth.
So back to present day. Twitter built value, and a customer base as its first goal, income streams came later. Did they always have plans for a revenue stream, I hope so! Sure it may have been a rough outline or a few sketchy ideas, but I am sure they did, and their investors saw it too.
Here are some simple questions to answer as you launch a new business, new product, service, or idea.
- Who is my customer for this product & what is their need?
- How will this address their needs?
- Where is my competition on this new product?
- Where can this under promise, and over deliver?
- What is the opportunity for growth after we launch it?
- Where do we see this product in 1, 2, and 5 years?
- How are we going to make sure we keep up on the times
(value now, with outdated needs in a year is no value!)
- What if we fail to offer value now, can we innovate and change? or is the product dead?
- How will we gauge & measure the value created?
(It’s not always sales numbers, especially early on)
We at factor1 are always coming up with new things to help our clients. We clearly outline the goals, benefits, costs, target customer, and where the money is. We often will beta test and give out some freebies to make sure the value is where we expect it.
What tools do you use to measure your value?
Who do you turn to for advice on your new products, service, or ideas?
There is a lot of debate about the value of Facebook & Twitter. Here are two things that can make them worth some of your time.
1. Follow people, businesses or organizations that matter to you. Identify those who are in your field or in your area of interests. People are watching who you follow.
2. Add value to the people who follow you. If you run a business or lead an organization make sure that you are adding value when you contribute something on twitter. Don’t say things here that you wouldn’t say in a relevant business meeting. Please, don’t tell everyone about your morning breakfast from your work account.