So you need to know what your customer will love? What excites them? What moves them? This of course allows you to begin the process of designing a business model that delivers to both the customer and the business. Traditional business motivations are usually a push approach. But is this the future?
Guest post by James Streeton-Cook
Right now, let’s make something better than what’s out there, something really cool and we’ll beat the competition and make a mint. Since you are reading this post then we can assume you know better.
Current business thinking it is all about what the customer needs. So let’s pull out the Henry Ford standard about ‘faster horses’ for that one. Enough of the push!
Power of Pull – It’s a Lean Thing
Lessons from Lean Business have taught us the power of pull systems. »The core idea of lean is to maximize customer value while minimizing waste.«
When creating something new, some new value, be that a business model; product or service; or even a new industry platform – value is pulled into arrangement (not pushed) by Attractors involved.
The same thing happens in nature and as far as I know is current thinking for the formation of the universe. So with a bit of imagination, pull will also be relevant in business model innovation. It is a non-linear thing and most of everything is made up of non-linear systems. A river flows down hill. Why?
The pull in a good value proposition: 3 Types of Attractor
There are 3 types of Attractors to look for in your discovery, insight and understanding of what will excites your customer.
- Point Attractors
- Path Attractors
- Strange Attractors
(Geek Alert: Be warned, things are about to get a bit geeky. For more info on Attractors look here)
1. The Point Attractor
A point attractor is an explicit requirement or set of requirements. Your customer needs a bolt and it what they require is a grade 8.8 M10x60 hex bolt to fix a frame together. Or perhaps your small business needs a 10 Mbps DSL connection because it uses cloud-based services for accounting.
Quality, cost and service associated to the job done by the point attractor are usually the main grounds for competition. Invention of alternative ways to do the job may exist but you will need to move the customer. Localization and social benefits are emerging as approaches to offer a point of difference and additional value. Let explain this.
Great Ocean Road Milk
Fresh milk is the main form of milk consumed in Australia. Milk is essentially a food commodity. Supermarkets are one of the main retail channels for milk sales and when supermarkets entered the milk market with there own brands they priced it much lower. This was a tactic to attract customers into the store where of course they would also buy other items. Branded milk is still available in supermarkets but costs around 50% more and has significantly less shelf space then it used to. Many customers still buy branded milk based upon perceived cost and quality.
A dairy company in southern Australia, Warrnambool Cheese & Butter (WCBF), produces the Great Ocean Road milk brand for sales in supermarkets in this region. Great Ocean Road milk sells for the same price as the major milk brands however they are leveraging their value chain to sell the localized content and freshness of the product. WCBF is also known for paying a fair milk price to dairy farmers. Great Ocean Road milk have shown that by demonstrating a connection back to the community they offer additional benefits that go beyond their product. These points of difference have boosted the strength of the value proposition for Great Ocean Road milk and as a result the shelf space they have in supermarkets is growing.
Taking this a step further the social benefits of business are becoming a notable point of difference. Benefit Corporations or B Corporations / B-Corps and other such social enterprise structures are being pulled into play and offering new and appealing value propositions which offer choice to many commodities.
2. The Path Attractor
A path attractor is a set of requirements that initiates behaviours that lead to a particular action or result. A good example is driving a car along a road. There are physical constraints, a set of rules to follow and likely other road users to negotiate. If you want to travel the road (the path) the attractors involved draw a certain outcome. Getting the job done of travelling to a destination.
The systems business put in place to create required outcomes are also forms of path attractors. As can be the design of your website to drive particular customer behaviours.
Path attractors are the foundation for much of the low hanging fruit available in business model innovation.
Yarra Trams – Tramtracker
In my hometown of Melbourne, Australia, we have one of the worlds largest tram networks. It is run by Yarra Trams. When catching a tram, one of your primary concerns is will I get to my destination on time. Much of the time trams share the same road as other traffic and as such can be affected by the level of congestion on the road. So there you standing at a tram stop waiting for your tram and it hasn’t arrived yet. Will I get where I need to on time, the job you need to do. You just don’t know.
The tram network operators have introduced a smart phone app Tramtracker that provides real-time intelligence on when your tram should arrive for you to board and the time you can expect to arrive at your destination. Providing this knowledge has filled the unknown of not knowing if you will be on time. (Yes you might say now you know you’ll be late J but that is more comforting than not knowing).
You are now able to trust the transport to do the job of getting you along the path, your journey at a predictable time. Tram users report increased confidence in using the tram network. Timing is one of the attractors in the path and by addressing it Yarra Trams has increased the power of its value proposition.
3. The Strange Attractor
A strange attractor includes number of dynamic variables. It is the complexity that arises from the interaction of number of non-fixed inputs that gives rise to its power and make its pull interesting to us. Strange attractors are usually temporary arrangements but they may lock-in and become dominant for extended periods of time.
In real life when digging into customer needs we need to look to availability, emotions, response to design, likes and dislikes, morals and behavioural norms, inspirations, aspirations, expectations and rewards etc. The effect of influencers should be of particular of note.
Social media could be considered a current dominant manifestation of strange attractors. One that has become familiar to us with our everyday usage of it and yet it continues to change daily. With changes in structure, content and the users involved.
A significant area of interest for business is in trends, hits, fads and business cycles. Identifying an emerging strange attractor/attractors that are pulling these into play can enable a business to position itself to ride the next wave of change. Or perhaps take counter measures to see that emerging strange attractors that are negative, do not gain enough strength to lock-in and become dominant. Or like wise a business may act to reinforce a favourable situation.
It only takes a little imagination to realise that the strange attractors form the most fertile ground for business model innovation. Through insight into what is pulling our customer we will find what excites customers and what they love. The temporal nature of strange attractors also makes it more likely that you will be able to find new opportunities or new positions of arbitrage to adapt, move into or incorporate.
Often lauded for its success and imitated whenever possible by competitors, when it comes to strange attractors Apple are the masters to aspire to. Through the combination of simplicity, design and storytelling they have created a heady mix of inspiration, aspiration and sophistication as a response to the continually evolving attractors in tech space.
Apple has built platform, which as we know, keeps customers connected to it and for a nice premium price. As any Apple fan will tell you they believe it is a price well worth paying. Interestingly Apple is not often first to market, however once it applies its DNA, Apple is more often than not a hit.
The Apple brand has achieved some serious lock-in as a significant strange attractor. People are draw to it for many reasons, most of which are beyond requirements or results. It is obviously a business that looks deeply into the complexity in which it plays to find value propositions that continually reward both customers and the business.
Finding a Value Proposition that Resonates
If you go beyond form and function then most of the needs of our customers and our business have a basis that can be found in strange attractors. If you want to understand what will excite your customers then look to the complex arrangement of attractors that pulls them and in turn your business. Open your thinking and put aside your assumptions, ask why and in turn learn to see. There you will find the foundations with which to begin designing a business model with a value proposition that resonates with and excites your customers. You may even find yourself with a new strange attractor that customer’s love and pulls them in your direction.
For more detail on attractors you may wish to delve into the world of non-linear systems, resilience and complexity.