Following is an edited recap of the tweets with hosts Cindy F. Solomon @cindyfsolomon in San Francisco bay and Adrienne Tan @brainmates in Australia. Use this as a jumping off point to blog your insights and responses.
- Transcript: http://slidesha.re/olMZYz
products and services.
MENTIONED DURING TALK
- Value Co-Creation, The New Approach To Successful Product Innovation http://slidesha.re/nqm2Aw
- definition of Business with Customer Value Co-creation http://bit.ly/pBIgz7
- Value-based Service Systems: Value Co-creation http://bit.ly/o8zfiU
- How Co-creation Differentiates Customer Experience « 90:10 Blog http://bit.ly/nBnos9
- Co-creation And The Impact On The Three Levels Of Product http://read.bi/oFFLGz
- What’s Your Platform for Value Co-Creation? « Social CRM ideas by Mark Tamis http://bit.ly/pw2btV
- Dan Ariely http://bit.ly/qy3u2i
- Tools: Kano, conjoint analysis
- Products: Apple Macintosh, hybrid cars, Virgin Airlines
- Augmentative & Alternative Communication Technology (AAC): Steven Hawking, Roger Ebert
Q1 How do you define value?
- Brioneja I think there is significant consensus regarding the importance of value in innovation and product/service creation. However, there is little consensus as to the
definition and measurement of value. What is your own definition of value? All opinions are welcome
- brainmates A1: Value = what customers are willing to exchange ($, info etc) for your product/service
- piplzchoice A1 Product value can be measured by a degree it meets customer expectations
- Brioneja A definition that I use is that value is a measure of need or desirability. What do you all think?
- agilebench I like the notion that value is relative. It makes it easier to estimate value comparatively
- Brioneja @agilebench Yes, it is certainly relative, different for every individual
- saeedwkhan @brainmates Value and price are different beasts entirely. Value is what you get from something. Price is what you pay.
- Brioneja @saeedwkhan Yes, they are absolutely different. It's critical to 1st determine the value of the offering BEFORE setting price
- agilebench This approach takes its queue from agile estimation techniques (which are focused on cost, not value)
- hienergyguy value is what further rewards, relationships, and results can be obtained by after a transaction
- Brioneja @hienergyguy Yes, rewards and relationships is a big part of value. Service industries use this constantly
- lmckeogh @Brioneja : agree w/ half of that. I can think of some things that are desirable but don't necessarily have value .
- ProdMgmtTalk @lmckeogh - that something is desirable - does that not define its value (amount of desirability)?
- Brioneja @lmckeogh Desiring something to fulfill a personal want means the product has value for that individual
- brainmates Agree @saeedwkhan: re: the diff btwn price & value but in #business world price closely follows value
- Brioneja @lmckeogh The fashion industry has always relied on this.
- Brioneja @brainmates @saeedwkhan Unfortunately in most companies price comes first, value later
- ErikaLAndersen Whether something "should" have value and "does" have value are
- lmckeogh E.g. I desire a strand of pearls. However, its value or more exactly, its price is artificially set by someone (jeweler).
- Brioneja @ErikaLAndersen Value is relative for each individual. Something may have value for you but not for me. That forms the entire basis of real market segmentation
- Brioneja @lmckeogh The price may be set, but some individuals may think the price is above value, some below
- lmckeogh @Brioneja yes, price can be an arbitrary measure and will differ between consumers
- agilebench What approaches could we
- take when attempting to enhance the value of our current products?
- Brioneja A2: I personally use two categories: Hard (monetizable, directly measurable) and soft (emotional/ subjective) The classic example is hybrid cars: Hard value: Gas Savings, Soft Value: Saving the Planet
- ErikaLAndersen Hard value for cars: ability to get from A to B. Soft: Luxurious feel, prestige?
- Brioneja @ErikaLAndersen Yes, Branding big part of soft value
- Brioneja @ProdMgmtTalk I separated "Hard" and "Soft" value essentially b/c of easy of
- ErikaLAndersen A2: Yes, absolutely. Seat on airplane. Business ppl may value much more than vacationers - hence, segmentation
- Trillogy3 Q2 Yes. The example that springs to mind is economic value versus personal value. Example - grandma's rocking chair on EBay. May have great value to me, but no econ. value
- Brioneja @Trillogy3 Wouldn't the fact that it does have great value to you also means some economic value to you?
- saeedwkhan @brioneja - A2 Yes. Diff types of value. usu. saves time/effort, gives peace of mind, makes/saves money etc
- Brioneja @saeedwkhan Do you define market segments using different types of value?
- saeedwkhan @Brioneja Yes Segment by value & use case.Value changes based on who is recving value & what value they in turn can deliver.
- lmckeogh So, in simple terms @Brioneja, value has both a subjective &objective component. Could you plot objective along X axis vs. sub
- Brioneja @lmckeogh It is theoretically possible, difficulty is relative measure of subjective value
- eghenson so categories of value - economic, social, personal?
- Trillogy3 Q3 price is one way.
- lmckeogh A3: Time is money IMO. If I can save time depending on the cost I may value it.
- Brioneja @ProdMgmtTalk Easy to measure gas savings, more difficult to properly measure the satisfaction you get from saving the planet
- eghenson often you can test/measure value by comparing the object of test to existing objects of proven value
- Brioneja @lmckeogh Absolutely, time savings are quantifiable and measurable, "hard" value
- lmckeogh @Brioneja: What I meant by last comment was can you transform a soft measure into something hard during value discovery
- Trillogy3 A3: I guess you could also measure by volume - units purchased. Also number of referrals.
- Brioneja @Trillogy3 The catch 22 is that if you don't have an estimate of the value of your offering, you may set price too low or high
- Trillogy3 A3: Measuring soft value - market research can be helpful in quantifying.
- brainmates A3: Measure value through desire to pay for it in some way (time, $, freedom)
- Brioneja @brainmates Yes, but how do you set the initial price if you do not know how much customers value your offering?
- lmckeogh @Brioneja: @brainmates : pick a price and see what happens. Shoot high. Easier to go lower
- eghenson entertainment, as example. You pay X to go to the movies. Would you pay X for this other choice? or more than X?
- eghenson comparing new to existing gives you an initial basis for assessing value
- ErikaLAndersen value derived equated to goals met: hard goals (tasks, speed) measurable; soft (feeling smart, having fun) not
- brainmates @brioneja - Through customer discovery - segmentation, problem definition, solution design & testing
- Brioneja @lmckeogh @brainmates Setting the price too high may doom your product launch
- Brioneja @lmckeogh My favorite example is the Apple MacIntosh; Before Steve Jobs learned how to do Marketing, he made horrible decisions. If Apple had lowered the prices in the late 90's just a bit, we would all be typing on a macintosh. (sorry, I meant late 80's before the launch of Windows 3.1) The fact is that Steve Jobs set the price higher than the perceived value of the UI and almost killed the company
- saeedwkhan @Brioneja Price is usu. dynamic and iterative. Setting initial price is easy. Setting a good initial price is hard.
- lmckeogh Doom is so fatalistic. There is always tomorrow. Adjust based on feedback. Working against gravity is harder than with it.
- brainmates @Brioneja: @lmckeogh @brainmates Setting the price too low may mean that you'll leave $ on the table
- eghenson Both @Brioneja @lmckeogh make good points. other market features need to be considered when defining price
- Brioneja @saeedwkhan Yes, that is the critical issue, understand value BEFORE setting the initial price
- lmckeogh @Brioneja : But what would they have compromised in value?
- Brioneja @saeedwkhan Use tools like Kano or conjoint analysis before going to market
- eghenson Please consider the notion of using reasonable comparisons for setting initial pricing or test pricing
- lmckeogh @Brioneja : agree about using tools. Kano can help with value but not necessarily a price point from my POV.
- Brioneja @lmckeogh I agree, you need conjoint for price point
- eghenson people seem to be iterating on what is hard or errors made rather than practical ideas to address
- lmckeogh @eghenson : by understanding the errors can be sure not to make same mistakes
- Brioneja @brainmates The subject of value co-creation is a more recent subset definition of value
- eghenson value-co creation - include customer as well as all internal stakeholders in product
- ProdMgmtTalk Value co-creation bringing own resource for beneficial outcomes at point of consumption (value-in-use) http://t.co/cTIAyHAu
- Brioneja @brainmates There are those that say it is about the customer experience
- lmckeogh [side note] In determine value one good reference is Dan Ariely's Predictable Irrational. Talks about how mind plays tricks
- Brioneja @brainmates but others say that it's about offerings that allow customers create individualized value propositions during use
- eghenson Nice @ProdMgmtTalk I think your comment suggests that stakeholders have direct participation in definition/ delivery
- ErikaLAndersen A4: consider tasks accomplished, speed, money saved AND visceral enjoyment, reflective qualities
- Brioneja @eghenson There is a school of thought that says that value co-creation is more than joint product development
- aussiegoldy You measure value by how close it is to a win-win. Win for the product/company and win for the consumer
- Brioneja @lmckeogh You can only adjust price if you have not irrevocably set a certain image of your product in the customer's mind
- ErikaLAndersen Co-creation: Who is the co? the end user, the paying customer? stakeholders?
- eghenson @Brionej yes, that value co-creation > than joint product development. I agree. In what ways, what else is needed?
- Brioneja @eghenson it is about different value creation during use due to the interactions of the customer with your offering
- eghenson @ErikaLAndersen each stakeholder, customer, end user need to somehow be represented in product / service dev process
- Brioneja @eghenson Yes, critical to involve all stakeholders
- lmckeogh @eghenson : are you trying to please too many constituents. Determine the Most Important Customer and set expectations there
- eghenson @lmckeogh I think this is a longer conversation. of course priorities need to be set.
- ErikaLAndersen A5: I like Virgin Airlines; successful airline with focus on good experience to passengers
- Brioneja @ErikaLAndersen What would you say characterizes Virgin Airlines' experience?
- Trillogy3 Virgin is a good example. Food/entertainment, great experience and travel Virgin is customizeable!
- ErikaLAndersen @Brioneja haven't flown VA for while, but they had comfy seats, fun attendants; focus on good experience
- Trillogy3 @lmckeogh - actually you can order off a menu for food or entertainment - very
- Brioneja @Trillogy3 Good example. Cooking and food are certainly areas where co-creation is a way of life
- eghenson back-scratcher. it provides the functional capability. I get to direct it to the itch LOL
- Brioneja @eghenson Some people use back scratchers for other applications than the one it is intended for. Reaching for example
- Brioneja @eghenson But the key is to design product that encourage a customer to explore different avenues of value via customization
- eghenson @Brioneja RT so the value is extended beyond original intent. big win for consumer and likely also provider
- eghenson @Brioneja is that a dogma or sometimes appropriate intent
- brainmates Isn't it more than that? RT @Brioneja: @brainmates There are those that say it is about the customer experience
- ProdMgmtTalk @brioneja says key is to design the product so each user will customize it according to their own desires
- Brioneja @eghenson what this would mean is that you did not just offer one product, but an infinite number
- lmckeogh @Brioneja : a platform type of product that other functionality can be built upon it. E.g. including API's in software
- Brioneja @brainmates It is about the offering being capable to offer different experiences based on customer interactions
- ProdMgmtTalk RT @hienergyguy: so, clearly value is individual and companies need to determine individually
- brainmates So its customised experience rather than customer experience @Brioneja
- eghenson @Brioneja I believe I understand your meaning. I am intrigued by the notion that any 'product' can be infinitely flexible
- lmckeogh From an airline example standpoint there is limited co-creation unless I can fly the plane
- Brioneja @brainmates not just customized, it is about the offering being capable of being customized BY the customer
- brainmates New product! RT @lmckeogh: From an airline example standpoint there is limited co-creation unless I can fly the plane
- eghenson @brainmates I do like your definition. concrete and understandable
- Brioneja @eghenson The best example I was recently exposed to was iPad apps for alternative communication. Individuals with limited communication abilities represent an infinite number of variations. These apps can be customized to match the exact level/need of the individual. Thus the same product looks very different in the
hands of one user vs. another
- ErikaLAndersen So like deaf, dyslexic, blind, stammerers etc.
- Brioneja @ErikaLAndersen Augmented and alternative communication is a specific field that deals with individuals with limited ..... ability to speak and even type. The best example is Stephen Hawking
- lmckeogh A6: Should think about and plan for extensions at inception if you want it to take on a life of its own. Create that Kano map and use it to fill out the roadmap
- Brioneja @lmckeogh Yes, the design of the product should incorporate customization from the early stages
- eghenson @lmckeogh yes, but beware planning paralysis. ;-)
- lmckeogh @eghenson : yes, hard to know where users will take the product, but don't create a brittle architecture. Make it flexible
- eghenson @lmckeogh great! flexible architecture as requirement for customizable products and as foundation for co-creation
- ErikaLAndersen Value co-creation means the product is platform that is jumping off point for infinite uses
- ProdMgmtTalk Yes! "Customization by design" include at inception of product
- ProdMgmtTalk @brioneja says "there’s a difference betw customizing prod before ship & product being customizable by customer"
- Brioneja This is a presentation I put together on Value Co-Creation if interested http://t.co/aV1UFn53
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