A quick search of the internet on new revenue strategies will yield a variety of interesting business models: service products, affiliate streams, membership models, etc. These all are great chaff for sparking creative analysis of how a growth company (defined here as a company who believes that new revenue sources are important to survival; not always a given) can evolve strategy for the future. One aspect has repeatedly emerged as critical to best practice planning and has proven to be a strong predictor of market success. The degree of elegance in your offering is directly related to sustainability of differentiation, target market acceptance and level of margin strength over the life of the product.
I define solution elegance as the intersection of a variety of factors including: technical design, robustness of value, customer loyalty opportunity, satisfaction of real needs versus a satisfaction of perceived need and others. The “fit” of your offering must measure wide on a spider diagram of offering characteristics; and should be greater than any competitor or alternative offering. You are only as strong as your weakest point as they say. A weak point is an exploitable point. The company (i.e. product manager) must uncover and exploit the complete range of offering characteristics.
PlazaBridge Group is working with one client on a particular product category in a particular market segment. An analysis of competitors has demonstrated an emerging situation found frequently these days: many companies, in the pursuit of cost savings and survival, are ADAPTING existing products to new markets WITHOUT the necessary effort to create a more ELEGANT SOLUTION for the user. The competitors in our client’s market have simply marketed their products as performing a part of the tasks desired by the new market. There are gaping holes in offering characteristics around services, IT interoperability, form factor, operating certifications and appropriate price points for buyers. The effects of this strategy are slower adoption curves and less satisfied buyers. The advantage is new entrants have an opportunity to disrupt the market with a more comprehensive approach to offerings that takes these “peripheral” features/functions into consideration.
Companies cannot ignore the requirements that make up an elegant solution for their customers. Pursuing that extra effort to understand exactly what the customer wants, how they are going to use it and how they justify its purchase is necessary for success. And just a mention about “virtual” products here: if you think that these principle do not apply to virtual products like they pertain to “real” products, then you must explain the lack of sales for the majority of the 371,000 iphone applications available (and the fact that 90,000 are inactive).