You get up and think about how you're gonna beat the competition. You're tired of the rat race for the top prize. You'd rather focus on your business and its growth than the eternal competition.
I understand you very well. That's why, in the next installment of the Blue Ocean Strategy, I'm showing you how to find your unique value-add for your customers, bring it to life, and save a penny on top of it without your customer even noticing. You will find the answers to the following questions ...
🔸 What are the limitations of the current market?
🔸 What is the 6-path method and how to use it?
🔸 How to use the ERRC working framework?
🔸 How to find unique added value?
🔸 Why does value innovation force cost savings?
HOW TO FIND UNIQUE ADDED VALUE AND SAVE COSTS (INTERVIEW TRANSCRIPT)
Martin Hurych
Hello. I'm Martin Hurych and this is another solo Ignition, the third of three parts dedicated to the blue ocean strategy. In the previous two episodes, we figured out how to pick a product or serviceto try to elevate to version 2.0, which we're going to try to sail into the blue ocean with.We showed how to map the existing market, the existing competition, our position in the market and how to look at what hurts and annoys potential customers in the market. Last time we also showed that customers are not just a group of people to be interested in, because if we really want to set sail into the blue ocean and a new market, it's a good idea to explore three groups of existing non- customers as well.
What are the limitations of the current market?
Today, we'll look at how to explore in a coordinated way what my existing non-customers are connecting and how to figure out how to erase those constraints entirely within the existing constraints of the market. We'll focus on how to increase my added value to those who don't currently buy from me. In the context of the red
the ocean is a bunch of restrictions. Typically, I would name the constraints of the segment or industry you're in, the strategic customer group or the specific group of buyers that are in that market of yours. It's also determined by the range of offerings that your competitors offer in that group. We can also factor in how what you're offering is perceived, whether it's an emotional thing, an impulse buy or whether it's very functionally and price driven. It's also good to look at what your time constraints are within the market.
What is the 6-path method and how to use it?
We're going to very quickly outline here today how to try to shoot down all these limitations, what to examine, and how to look at these limitations. To do this, we use the 6-path method, where each of the constraints I've listed here is examined separately and in relative detail. The first pathway will be to explore solutions to customer problems in your market from the position of similar or even quite different market segments. What I profess is that a lot of things have been written, a lot of things have been applied, and what we humans do today, and what we are creative about, is we connect what works somewhere to our new conditions in which we operate. If you have customer behaviors and their pains and sorrows in front of you in a spreadsheet, take a look at whether these or similar problems exist and how they are being addressed in more progressive market segments. My customers are often in the slower segments like construction, engineering, but also quiet IT, custom programming. I always encourage customers here to look at what's happening in telecom, what's happening in energy, what's happening in social media. Often the trends that are in these progressive segments will reach us in a few months or years, so you can see solutions to your problems there very early on.
The second avenue I recommend exploring is exploring a strategic group. What does that mean? You have business travelers who are either flying business or their top segment is traveling on private jets. It's a good idea to look at what connects those groups and based on those connecting factors, look for that value-add of theirs and a solution to the problem that that market has. It's similar with the buyer group, only it's on a smaller scale.
At the same time, the red ocean market also very often dictates what you have to offer that customer. Often we are trapped in one product category and stepping outside that category is not recommended by the standard red ocean approach. Because you lose the narrow focus and you potentially lose economies of scale within the narrow focus. It's often enough said that stepping outside the comfort zone of that particular business can be deadly. Within the blue ocean, on the other hand, this is encouraged and you should have the desire, the ambition or at the very least test to see if you can be a one-stop solution for everything for your customer. A typical example is a single functional unit solution such as a podcast studio, I don't just offer cameras, I offer a bespoke podcast studio build. That would be a way to explore the path of scale and expanding your own offering.
The fifth way is to explore the functional and emotional parameters of our business. My typical bubble works in an environment where we talk about the features, the characteristics, the parameters of those services and products that we offer by default. We talk a lot about price, and there's not a lot of great fun anywhere. On the other hand, we tell ourselves that a lot of purchases are very impulse and emotionally driven, even in B2B, because at the end of the day we're always just people. I strongly recommend that even for things that don't look sexy at first glance, think about the emotional side of it. In the context of the blue ocean, you can show that you can add a human dimension to concrete, and you can sell through emotion the moment you add a story to what you're offering.
The sixth way is taking the time and dedicating yourself to continuously monitoring the market you're operating in, not just the market, the economy in general and trying to catch emerging trends. The moment you catch an emerging trend and you are one of the few, if not the only one, who can predict that market, then of course you have a strong wind in your sails and can head out into the wide blue ocean. I recommend using at least 3 to 4 of these 6 paths at a time because each one will show you a slightly different perspective on your market.
How to use the ERRC's working framework
If you have explored, it's time to go back to the very first chart we started with. That chart is a chart of the competitive parameters of those individual companies that are in that particular market. Within that, with information about how customers are behaving, how non-customers are behaving, what the potential solutions to a given problem might be in that given market, you have a chance to do several things within your own strategy. You can safely ignore some of those parameters on which the market is competing.
In short, you decide that these parameters are not important to you. Some you can't completely ignore, but you can pretty much eliminate them. For example, I may decide not to do a podcast because it may be something in my marketing mix that I can overlook and replace with something that my competitors aren't doing. The third step is to nail down the things that you really feel absolutely strongest in the marketplace. The fourth part comes out of those intense analyses that we talked about in this and the previous episode. That's where you're going to deliver something that the market doesn't yet offer that really solves real problems for real players in the market.
How to find unique added value and save costs
This allows you to achieve two things at once. Firstly, you will reduce your costs and at the same time your offer will be completely different from what your main competitors are offering on the market. Why is it important to save money at the same time? Today the market is so dynamic in all segments that if you don't focus on reducing your own costs at the same time, you risk being copied very quickly. But if you find ways to deliver added value where you can save money and at the same time those ways are not easily copied by others, you are really creating a big time buffer in front of you. Within that blue market, you can be on your own, and that's what's called value innovation. It combines both adding value and reducing your costs. Again, dropping costs doesn't necessarily mean you're lowering the cost of bringing customers to the market, most of the time it's a pathway to greater profitability for your company.
That was a flight through the world on a blue ocean, we could still talk about how to price correctly here and how to move forward into foreclosure. So far in these three short episodes within Ignition, we've been able to define where we are and where we want to get to. If you're interested in any of this and would like to implement it in your own company, be sure to get in touch. We can talk independently about Blue Ocean and we can make those general and generic guidelines specific to your company. If you're not that far along yet, however, what I've been saying here for the last three episodes has intrigued you enough that you'd like to share it with someone around you, then by all means share it. Keep liking and Comment as the platform you're on allows. If you missed the previous two episodes, be sure to check out www.martinhurych.com/zazeh, which has all the other episodes of Ignition in addition to the Blue Ocean miniseries. I have no choice but to keep my fingers crossed that you'll be able to set sail and head towards the blue ocean. I wish you success, thank you.