Post image for Realignment #5: From Products to Solutions

Realignment #5: From Products to Solutions

Based on the new book: The Demand Perspective: Leading From the Outside In

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A Quantum Leap for Increasing Competitiveness The New Engagement – from Participation to Connection

My small community bank added a new feature which is immensely convenient to me: the ability to transfer funds to and from other banks! I am sure that the bank would prefer that I keep all my accounts with them, yet they make it easier for me to keep and manage accounts at different banks. This is because they believe that helping me with solutions to my financial transactions will deepen my loyalty and relationship to them and could generate referrals—all more valuable than keeping all my accounts at their bank.

Amazon thought along the same lines when it decided to allow customer product reviews on its website, despite that some of these reviews would be negative and jeopardize the sales of individual products. It paid off. Visits and sales greatly increased. Customers were motivated to keep returning to the Amazon platform because customer reviews of products helped them make better-informed purchasing decisions. The value of feedback for customers was a far more potent tool for getting them to return to Amazon’s site than marketing or advertising.

Shifting from products to solutions is a quantum leap to an entirely new level of competitiveness, growth and increased alignment with today’s markets.

The economic and customer value of solutions  

“Solutions” do not imply nothing short of breakthrough answers to customers’ problems that will change the course of their lives. Amazon transformed the industry, yet CEMEX, a construction materials company in Mexico, improved customer experience by simply going beyond the sale itself to construct state-of-the-art bags that facilitated the transportation of purchased materials.

“Solutions” imply a focus on customers and their problems as the drivers of every aspect of the business. They require the capability to tap; reconfigure or reinvent; and integrate assets across silos organization into unique solutions.  While solutions can include products and programs, the component parts are treated as interconnected components of larger solutions and and viewed as means to outcomes, rather than as ends unto themselves.

Selling standalone products involves linear transactions rather than relationships.  Even if your sales increase, transactions do not advance the level of purchase, relationship, and value exchange from tactical to strategic; from small ticket, prepackaged items to highly valued and customized contracts or partnerships.

To switch your thinking from products to solutions, start with the customer and work backwards to the products, services and kind of organization you need to develop.

VIN (the Veterinary Information Network) is a virtual community of veterinarians did just this at its very onset. It was designed to provide solutions to problems that have plagued independent veterinaries and curtailed their success, such as: isolation, lack of access to specialists and peers, the expense of multiple subscription, the needs for collaborative case analysis, real time exchanges and problem-solving. VIN’s platform creates virtually “the largest veterinary practice in the world” from which members can draw resources and solutions to their challenges. This is why all VIN members I interviewed considered VIN absolutely indispensable to their ability to practice.

A Day in the Life: How Solutions Are Experienced by a VIN Member

Welcome to a day in the life of one of the members of Veterinary Information Network (VIN) I interviewed:

  • First thing in the morning: Checks VIN’s news headlines. “First, I questioned the need for it,” he tells me, “but then I realized that these were unique stories or perspectives on stories that are relevant to vets. What’s more, it is interactive and you have a chance to comment. It looks like VIN is bringing the community together around issues of importance to us.
  • Lunch break: Logs into VIN to check discussions on message boards or catches up on a new clinical update. He feels re-energized by taking a break from the frantic pace of work and entering the VIN community’s site in the middle of the day.
  • Afternoon: Needs to contact a specialist on a difficult case before he performs a surgery. His online query to one of VIN’s consulting specialists is answered within minutes. In the past he would have had to contact veterinary schools in the area or other parts of the country and locate specialists who were both reputable and willing to offer advice. This would have taken considerable time and effort for which a sole practitioner like him, or someone with a small practice of two or three vets, could not afford. Even if willing to invest in this effort, however, he would have ended up with one specialist, and not necessarily the best. He is grateful that he now has a choice of qualified, vetted specialist consultants with one click on the keyboard.

All through the day:

– Consults with the VIN Drug and Food Recall Center to stay on top of products that have been recalled and checks clinical updates relevant to cases he is working on

– Logs into VIN and enters a specialty board on a topic of concern to him to pose a question to, and get advice from, colleagues who have dealt with similar cases

– Browses through archived discussions on the effectiveness of a new drug he wants to try on a patient

– Checks into a new board on bankruptcy and practice redesign. With two new veterinary practices opening in his small town and his business declining, he wants to understand all his options in a worst-case scenario and hear about what others have done to rebound from a slow market by redesigning and streamlining practices

The value this member derives from his membership is not in any one of the resources VIN provides or even in the totality of resources. It is in the way these resources are organized, paced, and made accessible and how they can be customized, updated, and reconfigured to provide exactly the solutions he needs when he needs them. These resources would be valuable as standalone products and services in a conventional association model. Yet because they are designed specifically around members’ needs and use the internet’s expansive options for speed, customization, and community, they are transformed into solutions for a continuum of needs and, as such, become indispensable.

The Challenge for Leaders

Increasingly, there seems to be a major shift from standalone products to integrated solutions across sectors. However, most associations are sticking with the conventional portfolio of standalone products and benefits that do not build on each other toward outcomes. This product orientation represents a competitive liability for association leaders.

You can begin on the solutions course with easy first steps, such as:

  • establishing members/customers and their challenges and solutions, rather than your products and achievements, as the focus of your website
  • creating a staff role or small unit focused on a specific customer group, empowered to work across silos and draw from all departments to craft solutions
  • changing the tone of your conversation with members to more strategic and collaborative
  • digging more deeply into members mind to understand, and help them uncover, the priority challenges facing them
  • guiding staff to draw up detailed “Days in the Life”© of various member types to begin to see the world and value of your products from their perspective.

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(photo credit)

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