Do you really know what your customer wants? Ask them!

Why is it so important to create value for the customer?

You have probably wondered why there are companies that succeed spectacularly, such as Google, Facebook, Amazon, Apple, Booking, to name a few, and other companies that had their moment, such as Nokia, Sony, AOL, Yahoo, but that today, in the middle of the 3.0 era and entering the 4.0 era, have not been able to survive or are dying. They are not creating value for their customers.

The world is changing again. In fact, it is always changing, but the business models that were valid in the 2.0 era, that of social networks, the first decade of the 2000s, are now not robust enough to retain today's customers, who are much more sophisticated and knowledgeable about online tools and the possibilities of the Internet. We have no choice but to evolve.

Index

• The importance of generating value in the business model
• How did we generate value for a client 10 years ago?
• How do we generate value now?
• How do you know what customers consider valuable?
• Examples of co-creation of value

The importance of generating value in the business model

In academic definitions of “What is a business model” we mostly find that it is an abstract concept that no one dares to define specifically. Luckily we have Osterwalder (the same one who created the Canvas Business Model framework in 2009) who helps us clarify terms and defines a business model as “the system that creates, offers and captures value”. On his website you will find more information about this model. https://strategyzer.com/

So a good business model revolves around value generation and the company's ability to recover value in the form of revenue and profit... but how can we generate value?

How did we generate value for a client 10 years ago?

In the era of 2.0, there were businesses that generated value just by being part of them, which were called “network externalities”. They were the type of business that flourished from 1998 until more or less 2010 and were governed by the so-called “Metcalfe’s Law” which states that the value of belonging to a community increases by the square of the number of users that are part of it. This is the case of Facebook, eBay, all dating sites, Wallapop, and countless other online businesses. In 2004 I wrote an article where I explained what Metcalfe’s Law is and what a Metcalfe Network is, if you want to read it you will find it here: What is Metcalfe's Law.

The point is that in the 2000s, businesses that operated in the form of Metcalfe's network were the ones that were successful at that time and the value was generated by the market efficiency, the complementarity Among the products offered, the lock-ins that made the sellers loyal to the market and the novelty that this type of market entailed.

To give an example, these are the keys to success of SoloStocks, of Infojobs, of eMagister, to name a few of the businesses we created since Intercom, but also that of most online companies created in the early 2000s and which survived until approximately 2010.

From a certain point, which can be placed between 2008 and 2010, many businesses began to decline. At first it was attributed to the crisis…, to the wear and tear of the brand…, but the truth is that the online world was changing and we were beginning to enter the web 3.0: the widespread mobile Internet, with smart devices, augmented reality, virtual reality, big data and new business models, many of them based on electronic commerce and social interaction.

How to generate value in today's world?

There is no easy answer to this question. Each company must analyze how to do it… but there are several fronts where we can generate value:

In the product: making it reliable, with the exact features that the client needs, making it easy to use, …

In how we offer the product: a good marketing process, a good sales process, extraordinary customer service, a clear billing process, …

In how we relate to the client: impeccable resolution of incidents, quality technical support, trust in our company, …

… You are probably wondering why you don’t see it clearly in your case… keep reading…

How do you know what your customers consider valuable?

There is a term that is becoming fashionable: co-creation… How can we apply the concept of co-creation to the challenge of knowing what a client wants? Well, by asking the clients themselves! Something that we would not have done before because it would have seemed like a weakness of the business or a weakness of leadership and management vision… but now, at a time when the client has great power (… and knows it) it makes perfect sense to involve them in finding new ways to generate value.

Examples of co-creation of value

LEGO – Example of co-creation of value in product creation: through LEGO Ideas  This company collects proposals for creating new products, so they can ensure that when the product reaches the market it is accepted and that at least a certain number of buyers will buy it. In addition, the person who proposed the idea gets a share of the profits and is mentioned on the checkout as the creator of the idea, thus rewarding creativity and participation, while at the same time building user loyalty.

ALAIN AFFELOU – Example of co-creation of value in marketing: This glasses manufacturer has created Ideas4afflelou.es to propose challenges, receive new ideas and build customer loyalty. The challenge they have open today is marketing and they ask users how they would like Affelou's “Black Friday” this year 2018. Do you notice the change? It's not that the marketing department doesn't have ideas, it's that the ideas offered and voted for by users ensure good customer orientation, while building loyalty and being innovative.

BANCO DE SABADELL – Example of co-creation of value from employees: Since 2010, Banco de Sabadell has had BS Idea On the bank's intranet, a community created by employees who, regardless of their position, offer ideas for improvement to the bank's management. To date, 21,000 ideas have been contributed on process evolution, product transformation and new business lines.

So to sum up:

1. The future of your company depends on your value architectureThat is, how you detect what your customers consider to be valuable, how you manage to generate that value and how you are able to recover it in the form of revenue and profit.
2. The ways of generating value on the Internet that were valid 15 years ago are no longer valid. We need new formulas.
3. Don't be shy and ask your customers How do they think your company could generate more value for their business (in the case of B2B) or how do they think your company could be more useful to them (in the case of B2C)… in addition to being useful for loyalty, asking this question is trendy… in addition to Agile (take a word).

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