Product reinvention is also one of the reinvention aspects I get a lot of questions by so many companies we get hired: How do we start product reinvention? Where do we start? What is the starting point? In this video, I will only speak about the starting point. There are many other steps, but the center, the very foundation, the beginning of everything, relates to the issue of value.
Start your production reinvention by understanding deeply what is the value you are delivering today and how is that value changing for your customers. What are they expecting today? What do I mean by value? Very often, when we are in love with our product, our service (when I say product, I truly mean product or service) when we are in love with what we are offering to the world, we forget that most companies, most people do not succeed by selling products. They succeed by selling value.
Remember the very famous saying that nobody is really interested in hammer and nails. What people are truly buying when they are buying hammer and nails, they are buying holes in the walls. The same is true for your product and service. The chances are, your customers are not buying the products and services you offer, they are coming to you to pursue a particular value.
Many companies died, or whole industries died because they misunderstood the product for value and vice versa. The very famous story that I love, the death of the industry, is the death of the recording industry of the late 1990s and the beginning of this century. When recording industry was obsessing with one product, and that is round CD with 15, 16 songs on it, they thought that was what the customer was buying from them.
So the only thing they thought about is what new recording artists they could put on that disc? What new things, or new order or sequence they could make use of, and what the music industry altogether misunderstood was that people did not buy the discs. People are buying music. Instead of buying 16 songs on one CD, and then loving one of the songs only, they wanted to buy one song, and they also wanted to have it in their hands immediately, without driving to the store, without going through all the troubles.
Which is how Apple with the introduction of iPod and iTunes came in the picture, a complete newcomer to the industry, completely unknown, they had nothing to do with music recording previously. Nevertheless, Apple was able to kill many recording companies. That’s because Apple understood the difference between product and value. The customers were not interested in the CD. They were interested in good convenient, affordable music.
That is the question of your company, too. When you start product reinvention, are you clear what the value that customers are buying today is? How are their expectations and needs changing for the future? A few years ago, I worked with a company that mainly works with one product, transportation pallets. These are those big wooden or metal bases that are used to stuck products on; then they are lifted on forklifts so to load the big containers or big trucks. Transportation pallets are universally used in the transport industry.
When I came to the company and asked them what value is it they are selling, not the product, but the value, there were many different opinions but the surprising part, even in the top executive team there was no agreement. Some people thought they were selling standard, some people through they were selling speed, and others thought it was a convenience that they were selling. They did not really know what was the reason their customers were using pallets instead of any other logistic shipping solution, and that is a compelling story of how many times I come to a company, and I ask a straightforward question: what is the value you are selling?
There is no real one answer. I worked with the metal industry, and people truly believed they are selling metals. But nobody wakes up on Monday morning and think, Ok I need to buy a little bit of aluminum today. Of course not, they buy the value that aluminum provides. The value that pallets provide. The value that hammer and nails provide. People don’t buy the product itself.
So, where do you start your product reinvention? You start by profoundly and thoroughly understanding what the value of your product or service is and how the changes that are coming in your business environment are impacting that value. Are customers expecting that value to be delivered differently? Perhaps in a different package or a different form? A different value altogether? Maybe there is a better way to provide that value.
I love the old saying from the president of Revlon that nobody in the stores is buying real creams. We produce creams in the factories, and in the stores we sell hope. So what are you selling? What is the value that your customers are yearning for? That is the starting point of any product reinvention.
Right under this video your own answer: what is the value you are selling? What is the product you are selling? And what is the actual value that customers are buying? That is the starting point in which you deeply root in yourself and something that will enable you to revalue and rethink how that value can be delivered. That will free you up from the chains of today’s products and services and allow you to proceed with producing/offering even better ones for the value expected from your company.
As always, connect to us on Facebook, Twitter and LinkedIn, make sure you sign up for the newsletter as every time I post, there are different additional resources, articles, books that might help you and as always I wish you the most amazing day and a great reinvention ahead of you.
P.S. In case you didn’t check our previous video, on 3 strategies for dealing with resistance to change, it is available here!