Ok, we have talked about expanding your market boundaries by looking across alternate industries and the opportunities that may evolve from that exercise.
Right now we should be knee high in the blue ocean, flippers on and mask at the ready. However, before we take the plunge, we need to take a deep breath and shake off that Monkey Mind. Like the ocean in front of us, we need to focus on the big picture; begin to stretch our imagination and give up the minutia and petty details of the everyday.
Here is where we start really broadening our thinking process to focus on four critical actions that form the bases of the Eliminated - Reduce - Raise - Create Grid.
Draw a box that you divide into four sections with each section title by one of the actions.
The next step requires you to answer questions for each action step.
Eliminate: Which of the factors that the industry takes for granted should be eliminated? Think of this task like a famous stone carver once said; just eliminated the unnecessary stone and let the art come out. Here you want to focus on factors within your business and industry that companies continue to compete on but, are now taken for granted and no longer offer real value to the customer. Some of these factors may even discourage the buyer from taking advantage of your service offerings. Keep in mind that the buyer's value proposition is constantly changing and businesses that benchmark themselves against other businesses in their industry may not have adjusted to the change in the buyer's value chain.
Reduce: Which factors should be reduced well below the industry's standard? When businesses compete they can often overdesign a service trying to get ahead of their competition. The service then becomes the focus the business and not the value it offers. By over servicing your customers, you increase your cost without any value. Think hard about what services that your business offers that can be reduced because it no longer has value to the customer.
Raise: What factors should be raised well above the industry's standard? This is basically the opposite of the reduce action. Every business forces its customers to make compromises in their expected level of service and thus their experience. This action asks you to look to those compromises and then raise that level of service and minimize your client's need to compromise.
Create: What factors should be created that the industry has never offered? At first the answer to this question may feel daunting. However, as you progress through the other three you will begin to see opportunities that were not apparent before. This one action may offer the biggest challenge and the most substantial reward of any of the other factors. It can virtually eliminate your completion.
Let's use the Cirque du Soleil example to help illustrate this process. Granted, this is an oversimplification of their actions, but it should help get you started.
To begin with, because circus attendance across the industry continued to fall, it was apparent that the audience didn't see value in the format offered. Cirque du Soleil first looked across alternate industries that had the same purpose, entertainment. It than reviewed the current format for circus and sought out activities or events it could eliminate that no longer had value to the audience. It began by eliminating the circus venue of animals and humans performing routines that were done by every circus. They wanted to get away from the concept of "If you seen one you've seen them all".
Next, they looked around and decided all the events outside the performance center were not as highly valued by the audience as was thought, so they reduced the ancillary actives. This reduced their cost substantially without adverse effects on their customer's experience.
Now, came the question of what could they raise. From the other action factors came the answer; the audience's expectation for amusement. By doing so the audience no longer had to compromise on their entertainment value proposition.
And finally, by eliminating the unnecessary, reducing the undervalued and raising the entertainment standards, they created a truly unique audience experience in entertainment. They literally eliminated their competition.
There are several other examples of companies using this exercise to develop new markets. Please feel free to contact me if you would like additional examples.
In the mean time, Cowabonga! Surf's up. Everyone in the ocean.
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