What’s a Strategy, and Why Do We Need It?
Let’s begin the discussion surrounding strategy. At Zion & Zion, we have a lot of conversations that start with the client saying “I need a strategy,” “strategy is important,” or “we need to be more strategic.” Yet, when I hear many people in our industry describe their thoughts on strategy, it inevitably goes right to tactics or delivery channels: “we need a public relations campaign,” “we need more sales,” “we need to get more customers.” And the list goes on.
It’s certainly easy to look at one area of opportunity or consider specific points of pain. It’s hard to step back and take the time to think broader, or to stop and reconsider the “why”—i.e. the business strategy that drives the tactical endeavors. The “why” is the driver of determining the “needs.” But it also means reconsidering the purpose of the business—which isn’t always something clients have the time to do themselves. However, in the end this is where the answer will lie, and after several tactical attempts, it’s also the place you’ll end up anyways.
“We can always find the time to redo something, but never the time to do it right.” – William Morrow
When we speak of the driver of all the needs, we’re referring not to what you [the business] needs, but what is needed by the marketplace (the customer segments) and the needs you fulfill. It’s classic supply and demand, plus the value you provide such that customers are willing to choose you (and potentially even pay a premium) over the competitors. Companies (brands) started out by meeting a need (which is what made them successful in the first place) but over time the company changes, products change, the market demographic changes, the market needs change, and we don’t always recognize the requirement of resetting to ensure the “why we exist” matches the “needs of the customers.”
In a Money Magazine/Motley Fool article, the “most important factor for success” for both Warren Buffett and Bill Gates was stated as FOCUS.
Focus on asking “why” customers need to hear from you via PR efforts, why do they need to be reached through a different distribution channel, or why do they need to donate more.
Differentiated Brand Positioning
Now let’s shift gears and discuss for a moment what a differentiated brand position is (or in other words: a value proposition that allows you to position your brand in a differentiated manner within a crowded marketplace), and why we even need one, beyond the simple equation of supply and demand.
Competition is high and fierce in most sectors. Even if you’re able to launch a new product or service—or create a whole new category—the likelihood of a competitive entry is just lurking in the shadows. Think about taxis now shadowed by Uber and Lyft; or travel agents, now clouded by online aggregators like Priceline, Kayak, and Expedia.
Along with that, you have a customer base that is more and more in control of setting the expectations in the marketplace of what they’re willing to accept (let alone demand from a company), and what they’re willing to pay. Back in the day, the old adage was that the customer could pick two of the three:
- Time
- Cost
- Quality
Meaning, if you wanted something quick and you wanted something of quality, it would cost you.
Today, savvy customers expect to get a quality product, at a competitive price, in nearly no time at all, (meaning they want it today or tomorrow). Enter a differentiated brand position, i.e. why do I choose one product/service (brand) over another, if I know quality, cost, and time are commoditized qualifiers and no longer differentiate my brand from the competition?
Well, because a value proposition that differentiates your brand position illustrates to a prospect, or reinforces with a loyal customer, value above and beyond quality, cost, and time. The late 1990s introduced the “experience economy:” a branded experience where companies became focused on the combination of the touch points of an organization as they added up in the consumer’s mind as a total “experience,” or aspects that they attributed to (and evaluated) against the brand. From learning about a product introduction, to product comparison, to the shopping experience, to the purchase and checkout, to the delivery, to the installation, to the customer service.
Even The Economist, 2016 Report – “The Path to 2020: Marketers Seize the Customer Experience,” speaks to top insights gleaned from 499 CMOs:
- The customer experience drives brand equity more than ever.
- Top marketing channels are those that lend themselves to personalizing the customer experience.
This multi-touch experience provides an emotional benefit, along with the tangible aspects of branded products or services, and is definitely critical. However, even if this touch-point experience is flawless, and you personalize it with a customer’s name and with “products you may also like,” if there’s no core value proposition that customers connect to (their needs, wants, and desires) and therein associate with the brand name, your equation will fail in the eyes of the prospect.
So then, how do we determine value?
Finding A Killer Value Proposition Is Your Strategy
Let’s return to the first paragraph. Value is the “why we exist” matching to the “needs of the customers.” It’s about serving the best interests of your customer, but in a meaningful way—their way. Now we’re not advocating that you simply exist to meet the needs of customers, but rather you define why you exist as an organization and how well that aligns with the needs of the marketplace and the customer base or segment of that sector.
At Zion & Zion, one key element of strategy is defined as the ability to pinpoint the most advantageous decision (value-add choices) in regards to a specific business question (goals and objectives).
Here’s a simple line that’s a good analogy: “brakes make a car go faster.” By making intelligent decisions and choices (or applying the brakes in some areas), an organization can be purpose-driven (in the right area), therein move quicker, more focused, and be contextually relevant to their purpose and connection to the customer base.
Though an overused example, it is still relevant today: Apple doesn’t sell computers and gadgets (that’s what you walk away with when you leave the store). Rather, they “think different” to sell innovative ways which allow their customers to live their lives in a more meaningful and enjoyable manner.
So how do we find our value proposition (that we can own)?
We Are All Customers
Defining and matching your core value proposition to the market needs is not an easy task. We’ll grant you that we’re certainly not advocating the creation of a hollow or contrived gimmick as your value position, since those typically:
- Are temporary
- Never hold water with a customer
- And, create no equity for your brand, i.e. customer loyalty
We also realize we can’t always predict what customers will want or need. Who knew we needed a fax machine back in the day, or that one day we would need the microwave, or even the auto-close-door on our SUV trunk?
However, behavioral insights do allude to what customers or lifestyles are trending towards, and therein highlight how to discover “value” and a “position” for your brand in a crowded playing field. But what if competitors are also doing this? Well, by exploring the intersection and understanding of your organization, your audience(s), and the market space you play in, you can begin to see where your value proposition exits. With the PACE methodology, which we use here at Zion & Zion, one can begin to see a point of overlap and convergence in drilling down within each aspect of who and what you are in relationship to your audience’s needs and wants.
(P) Products/service
(A) Assets that enable and bring your products/services to be
(C) Character and culture of the organization
(E) Environment (marketplace dynamics and customer insights)
We spend 90% of our time researching, hypothesizing, and testing ideas to find that one core insight. If at some point we’ve looked at your proposed value proposition from all angles, then you can be confident it’s the right value proposition for a particular organization and the market it serves—and, more importantly, one you can own!
Conclusion
The point overall is to create a tangible value proposition that is quickly understood and internalized (your mantra if you will) by your internal audience (the company) and the external audience(s) to motivate prospects to become customers, and motivate customers to become advocates, and to avoid the 200 page ‘strategy’ binder that only serves as a solid bookend on everyone’s shelf.