Value propositions: Theory and Cases. Episode 8. Fit between the Customer Profile and the Value Map
Wishing you a fantastic weekend. Today, as always, we will develop one of the most interesting chapters of our saga, in terms of the acumen that is required to build a good match or a perfect fit between the customer profile and the value map. In our past episodes, we have covered these two sections of the Customer Value Proposition (CVP) separately. Today we will connect the dots between both. The discernment here is crucial.
To encounter a compatibility that is required between the gains and the gain creators, and between the pains and the pain relievers is just the first step. Before explaining it, I would like to clarify the meaning of the term FIT.
A FIT occurs when there is a compatibility, a connection between two elements, objects, or people. In this case, the FIT is between the product/service expressed in the value proposition and the specific customer we are considering. To FIT means to be the proper size and shape for. For example, a tennis shoe only fits when the client who buys the pair of shoes can sense or experience that the model of the shoe fulfills all his requirements (the size suits his foot, it is comfortable, cushions and supports his foot, and it is designed for the purpose and duration of its utilization).
Another example of a good FIT is the compatibility of character, personality, lifestyle, and quotidian habits in a romantic relationship between a man and a woman. Lust is not enough for a long-lasting affinity. Even love can die if there is no good FIT between him and her. The same occurs when we are drafting a customer value proposition. An entrepreneur can´t design a loving product/service if it doesn´t fit the customer segment’s needs and wants, solving his/her pains and gains. The connection between the product/service and the customer occurs in different categories: functional, emotional, life-changing, inspirational, social, etc.
Let´s read the set of slides (our frame of reference) for today´s content. This package holds 23 slides, that will be your homework to read over the weekend. Every Monday, I return to refill our strategic reflections that surge upon realizing the value of analyzing them slowly and thoroughly. Feel free to share them, download them, and print them. When reading take notes next to where a question arises, and do not hesitate to go to the bibliography (slide 22) to answer any doubt. We truly recommend printing the slides, for the sake of clarity. Ask yourself questions when you accomplish your reading assignment.
Love in our products and services is essential, but a good fit/compatibility is as important.
Last week we stated that love matters as one of the most important elements of value. We believe it should be surrounding everything we do. But at the same time, as in anything in life, a good fit/compatibility between our products/services and our designated customers is the attachment that keeps the realization of value through a purchase.
A philosophical reflection about the Fit between the Customer Profile and the Value Map.
When trying to explain what is the meaning of “a good match in heaven” between a product/service and a potential client, I decided to check the significance of “compatibility” in psychology and philosophy.
According to the American Psychology Association (APA), the term compatibility refers to “the state in which two or more people relate harmoniously because their attitudes, traits, and desires match or complement those of the other or others”(1).
From the point of view of philosophy, once we start to dig into the definition of compatibility, we immediately fall into additional terms: “human free will”, “or our actions determined by others”, “self-control” and “moral responsibility of our actions”. Let´s continue with the philosophical view, please.
The problem of free will cannot be seen without its relation to the origins and conditions of responsible behavior.
The bottom line with free will is to establish if humans are free in what they do or if they are determined by external events beyond their control (2). Once we visualize the process of consumer behavior by P. Kotler, considered the father of contemporary marketing, (see slides 7,8 and 9); we wonder if in reality, the consumers are exercising the power of their freedom to choose a specific product/service or if we are merely puppets at the discretion of “someone else”. Someone else (such as companies launching marketing strategies) who play with our psychological state of mind and emotional standing, to persuade us and manipulate us, to buy in such a way that we all fall into a funnel of no return.
The art of marketing has developed to a high level of “influence” over our consumer psychology.
By understanding that we all in our societies are not isolated, even if we live alone, we are now bombarded or flooded every single day through mass media communications in multiple formats: Traditional media such as TV, Written Journals and Newspapers, Magazines, Cinema, Physical Books, Radio and Street Advertising; and Digital Media that arrives through our Smartphones and Screen Devices, such as Websites, Social Media, Audio Media like Internet Community Radio, Podcasts, Interactive Media (like video games, videos, digital ads, etc.). Once the Internet becomes ubiquitous and mobile 24/7, in every country, then our minds are less and less in control of our own free will, but determined by what is communicated to us through the omnipresent media; we ask ourselves if we truly have control over our decision-making, not just in the process of buying things; but in the process of daily interactions with our inner circle of people around us, and our external community members. What kind of compatibility or fit are we holding in our consumer behavior actions? Is it true that we have arrived at a marketing sophisticated level in which we all are acting like zombies, unable to identify the media campaigns driving our wants and needs beyond our natural rationality? When did humans lose the capacity for free will, self-control, and self-moral responsibility for their behavior when buying things that are not helping us to become good citizens? For how long have we accepted that as a business strategy foundation, we should care only for our customers’ pains and gains; building value propositions that do not have any limit vis-à-vis the protection of our humanity, preserve our environment, and safeguard our well-being? When did our civilization lose the self-determination to establish limits of caution, and respect them fully for the sake of not damaging the future of the next generations? Why did we end up having theoretical frameworks that are not teaching us to respect boundaries in our design thinking process for products and services? Is it the laissez-faire philosophy? Or is it greed? Or is it simply an echo of our desperation to compete for the next “blue ocean” for profits otherwise non-attainable? When is it going to emerge a valiant business school that will help all of us to learn how, when, and why to stop pursuing irrational products and services?
The awareness of the customer value cycle.
Slides 9, 10, and 11 show us a basic model structure of the customer value cycle (3). I would like to revisit slide 9: we can observe the Model of Consumer Behavior by Kotler-Keller, and at the bottom, we can spot a figure with three stages of value: Value Pursuit, Value Expectation, and Value Realization. The Value Pursuit stage is now being flooded by marketing stimuli at the utmost level through the Smartphone, particularly through social media applications. When the kids and the youth became addicted to the Smartphone, all of our generation was already testing it too, not just for entertainment, but to study, to read, to get along with friends, to streamline movies, to listen to music, to pay for transactions, to visualize surveillance, to be guided to address routes to locations, to work, and even to use applications to sleep, relax, perform fitness workouts, etc. In this technological context, before the advent of the Smartphone, each customer was embedded in a traditional economic-social-political-cultural-legal and traditional living style. The addiction to the Smartphone as we know it today wasn´t automatic, but quite rapid. It took us 10 years to see the shift from the traditional to the digital, all the jobs to be done (activities of the consumer) were moved to the Smartphone, and the WiFi was the gem of the black little device that was supposed to be used only for communications (as the telephone). The transition was from a simple device to talk, to becoming the “God of our life”. Pardon me, the Smartphone is the “God of everyone”. With a God as such, the value pursuit for any product/service that traditionally was being persuaded by the conventional old-style marketing; is now a viral artificial-intelligence-powered machine that has gone out of control. This is the context in which we live. The stimuli of Technological devices have covered the rest of the stimuli and the marketing tool for excellence is ignited by the Internet and massive social media.
Value Realization doesn´t arise when the seller/retailer or vendor approaches the buyer. It happens by watching the Smartphone’s massive social media applications or websites, so the alignment between the client profile and the Value map occurs virtually, not in reality. And this is what has changed our reality in terms of the design of value propositions. This is why the brick-and-mortar businesses are dying because the value realization is happening before the purchase, on the go, and not on real terms. The manipulation of our free will is leaving humans without self-control in their psychological basic aspects, and without self-control, we all have evolved to a dangerous state of mind, the one of irrationality, being determined by external stimuli, without assuming any type of moral responsibility for our present and future, and for the rest that surrounds us.
The context of addiction to the NAIQIs affects our thinking.
How to design good CVPs if the strategists and marketing specialists are addicted to the current state of this digital obsession for the NAIQIs? How to ignite this reflection in professors who are involved in teaching these aspects, if they accept the philosophy of behavioral economics as the foundation of our irrational products/services? How to be heard by advisors of prestigious consulting houses, if they are also immersed in the same mischievous addiction? How to exercise the freedom to choose, if the mobiles and the Internet have converted us (particularly after the COVID-19 pandemic) into tech-addict zombies of the NAIQIs (Nanotechnologies, Artificial Intelligence-robotics and automation included-, Quantum supremacy, and the Internet). In this context of drug tech obsession for NAIQI products and services, it is quite difficult to exercise free will, self-control, and moral responsibility. It is not even possible to talk about the issues and consequences of digital business modeling (including the digital CVPs). It is like trying to establish a conversation with someone in a state of abnormal drug dependence on heroin, crack, or intoxication with alcohol. Dear readers, this is the context in which we all live now.
The fit between the Value Map and the Customer Profile is not based on free will anymore.
By this paragraph, I do hope to have demonstrated to you with the classic marketing premises, how extreme is the context of addiction to the NAIQIs in which we all live. And our readers must be aware of this.
The slides that I have prepared explain the fit between the different customer segments (slide 15) in the context of normal societies, not tech-addicted communities. So I do hope you can perceive the difference with our following weeks’ examples. Let´s continue with the slides. See the example of a Middle-Class mother of 2 kids who doesn´t work (she is a full-time mother). Look at the fit in which the contexts are different (slide 16), and the fit when this mother faces different products and services (slide 17). We believe the slides are more than self-explanatory. I have tried to explain every single case that Osterwalder-Pigneur illustrated in his company´s manual. The added value that our house has provided is the link between the gain creators and pain relievers under general categories (provided by BAIN & Co), in our quest to offer you a guide of reference that may help you to not miss elements of standardized value (slides 12 and 18). These 30 elements of value (from the B2C pyramid), and 40 elements of value (from the B2B pyramid), have been established by an analysis of 3 decades of Bain Experience doing consumer research and observations derived from scores of quantitative and qualitative customer studies (4). Finally, our package of slides explored the case of a middle-class mother of two kids who wishes to go on a date night with her husband (17,18 and 19). We designed three CVPs: one in which the product/service is a romantic dinner in town. The second CVP is a glamping luxury stars night (which is more expensive and complex); and the third one, is a dancing soirée. The elements of value are situated next to the sticky note in the section of the value map, not on the left side of the customer profile. I think these slides are self-explanatory too. If you have any doubt, do not hesitate to contact me.
Once you finish the first CVP version 1.0, the testing phase goes next.
Once you build your first value proposition in version 1.0, this is just the first look or approximation. Afterward, you must test this CVP in real terms with focus groups, or by interviewing (surveys), because without testing, the first CVP is just an approximation of reality. Probably, and through my experience, around 3 or 4 loops or versions of the CVP are required. Many times, your mind should be ready to change even the product; if in our testing consumer research, the magic of fit between the client and the value map doesn´t ensue.
One effective test that must be considered in our current context of addiction to NAIQIs, is to be ready to examine the compass of your CVP, by removing the Internet variable. I know, many of you will think this is crazy. But in reality, that is the truth. The CVP (within your business model) should work with or without the Internet. With or without Artificial Intelligence algorithms. With or without a mobile payment application, and if we want to be fair, without electricity coming from your city grids. That should be the measure of your CVP testing phase. In short, it is going to be mandatory, sooner or later, to include the testing of sustainability and love for the environment too.
Announcement.
The Easter or Paques week is coming soon. El Salvador will go on vacation between the 24th to 31st of March. During this week we won´t publish accordingly. Please remember that we publish our frame-of-reference slides only on Fridays, and we upload our strategic reflections on Mondays. Occasionally, if required we will add more additional episodes on Tuesdays. We always publish at the latest before 11:59 pm (CST). Our next episode will be our first applicable episode. Our series of examples on how to apply the theory to practice will kick off next week.
Musical Section.
This saga is about improvement, amelioration, upgrading, and the advancement required in the theory and practice of value propositions. Value propositions are the first step in our business modeling frameworks. If the value proposition is improper, then our business model is mistaken. Therefore, we will also share the music of classical progress that marked a before and after in the history of music. The instrument of today is another one in extinction because of the technological utilization of computers to create melodies: the harmonica.
“Harmonicas can be used to perform classical music as well as pop, jazz, folk, and blues. Harmonicas are orchestral – where the harmonica is designed to be used as part of an ensemble; and chromatic harmonicas- where the instrument is designed to occupy a similar musical space to other accompanied solo instruments, such as the flute”(5). The harmonica origin is related to China with an instrument called the Sheng. The modern harmonica was further developed in Europe early in the 19th century, in Germany.
Our harmonica player of excellence is Howard Levy. Enjoy this adorable piece “Autumn in New York”. I found it on his YouTube Channel. As Levy describes it: “Autumn in New York” is a beautiful ballad written in 1934 by Russian-born composer Vladimir Dukelsky (Vernon Duke). He wrote this song before returning to NYC from his Connecticut summer home. It captures a lot of my feelings about my hometown, New York. When I play it, I hear the lyrics, see Central Park, and dig into the rich harmonies and chord changes”. We expect you to mesmerize yourself in NYC too.
Thank you for reading http://www.eleonoraescalantestrategy.com. Blessings see you on our next episode.
Sources of reference and Bibliography utilized today. All are written in slide 22.
(1) https://dictionary.apa.org/compatibility
(4) https://www.bain.com/insights/the-elements-of-value-hbr/
Disclaimer: Eleonora Escalante paints Illustrations in Watercolor. Other types of illustrations or videos (which are not mine) are used for educational purposes ONLY. All are used as Illustrative and non-commercial images. Utilized only informatively for the public good. Nevertheless, most of this blog’s pictures, images, or videos are not mine. I do not own any of the lovely photos or images unless otherwise stated.
Eleonora Escalante Strategy 