Author’s note: This is the second in a series of several posts on the much-discussed notion of ‘creating customer value’, culled from what was originally an extraordinarily long post and separated into more focused topics. The first, exploring customer value through the lens of VORP, can be found here.
This from C.B. Whittemore of the well-penned Flooring the Consumer:
But instead, if you use social media as a new channel to connect with your customers and create valuable content for them, to give them information that they can use, then you are giving them a reason to connect with you. You are creating value for them. And a byproduct of doing so, will be that these customers will help promote your efforts, which results in the online conversation about your company increasing, and becoming more positive.
This from The Future of Competition by C. K. Prahalad and Venkat Ramaswamy
web-empowered consumers will usher in “a new industrial system” characterized by “co-creating value through personalized experiences unique to the individual consumer.” Under the new regime, headstrong consumers will “seek to exercise their influence in every part of the business system,” and companies will accommodate them by, for example, allowing them to design their own individualized cosmetics and houseboats (an innovation whose benefits include “emotional bonding with… the company” and “a greater degree of self-esteem”).
Fair assertions, both.
Flipping the tables, though, for the moment: what value does the consumer place on the product or service you are providing them? How much would you pay for the opportunity to design your own houseboat (assuming, as we are, that you have designs on doing just that)? The answer, one suspects, would depend on a great number of factors. Assuming, however, that all houseboats were constructed of equal quality, there is probably a good deal of value in the ability to do so through one supplier.
If, and only if, scarcity applies.
If all houseboat manufacturers – or even several – allow the design of custom houseboats, then the value created for the consumer is minimal.
Consider the competitive space of the airline industry. In what is effectively a commodity market – a seat from Boston to Los Angeles is a seat from Boston to Los Angeles – every attempt to create value for the consumer1 (always leveraged as a competitive advantage) has been mitigated by the relative ease with which other carrier can duplicate effort. Amenities are not scarce.
The Campbell Soup Co., which made great inroads online early this decade with Campbells Kitchen, created value for consumers through cooking instruction and recipes.
Cooking instruction now exists in abundance; for free; from multiple trusted sources.
Recipes? Abundant. Very abundant.
Kitchen tips? Abundant.
As content or utility grows more abundant, it bears asking: Is the value generated for the customer ever-diminishing?
- even organic fruit [↩]
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