by Kenneth Rudich
Several posts to this blog have already explored the concept of creating customer value, each from a different angle. The reason for that is simple: it’s the cornerstone to a successful marketing strategy.
Observing the many ways to create customer value is always informative and worthwhile. It provides a fresh perspective for thinking about your own business, another lens for looking at it anew. It can stir the imagination, and it can help you to make connections that might otherwise remain stubbornly elusive.
Sometimes it can even lead to creating a kind of new value known as transformative value.
Transformative value happens when an already existing product or service undergoes a significant change, to the extent it becomes cloaked with a new look or structure or appeal. It passes through a transformation or metamorphosis as the name suggests.
transformative value often carries big marketing implications
Transformative value can compromise the life cycle of currently existing products, forcing them into a state of decline or even to drop out altogether.
History is littered with relevant examples. The personal computer displaced the mainframe computer. Automation technologies have greatly reduced the need for unskilled labor. Phonograph players are a relic of the distant past.
The internet and its associated technologies has become a kind of ground zero for transformative value creation. It has opened all sorts of doors to opportunity, but it has wreaked havoc too.
beware the hazards of marketing myopia
Transformative value offers success to whoever has the vision to seize it. It doesn’t care whether that reward is bestowed upon the young upstart or the well-established.
Vision is the key. The opposite of vision is known as marketing myopia, and it can cause a longstanding business or industry to fall into a backslide and literally collapse.
Marketing myopia is the inability to comprehend how a transformative change in the marketplace can or will affect your existing product or service. It makes you vulnerable to being displaced by someone or something else, typically because you have failed or will fail to make timely adjustments or adaptations.
The newspaper industry is a classic example of marketing myopia. It couldn’t quite grasp how the advent of the internet was going to radically change its core business — the collecting, printing and distribution of news and information. Rather than think outside the proverbial box, it spent the early days trying to determine how to transfer the same old business model to the new platform.
Others, meanwhile, went about the business of innovating new models for collecting and distributing news and information. Piece by piece, the newspaper industry was slowly being dismantled by the likes of search engines, the Wikipedia, online news outlets, and social media. Somebody named Craig even put the classifieds section on the internet.
All in all, the ability to generate revenue with a conventional newspaper has become so badly eroded that only a relatively few remain in operation today, and who knows how long they will last.
On the other side of the coin, IBM took heed when the core of its business, the mainframe computer, was at risk of being displaced by the pc. It re-invented itself as needed to survive. In fact, it has successfully done so on numerous occasions since, and it has managed to retain a strong competitive stance in the face of a constantly shifting wind.
a lesson for marketing
The lesson of transformative value is this: one marketer’s dream can be another’s nightmare.