The customers have the power online. The customers can find the precise same product as you have online a click away. And somewhere out there the customer can find your product cheaper than you can sell it right?
So how can you put extra value to your website and to your products? The product and the digital value will make you a better product. A better product for the customers and there for also a better product for you. Maybe you know your own value chain, but do you know your customers value chain?
The value chain
You might have heard of the value chain of a company. Here is the short version.
The primary value chain activities are the ones in the bottom – Inbound Logistics – Operations – Outbound Logistics – Marketing / Sales – Service. The goal of all these activities is to create a value that will exceed the cost of providing the product or service and this way generating a profit margin. The inbound logistic is the input materials – including the receiving, warehousing and inventory.
The operations are the activities that transform the inputs into the final products. The outbound logistics are the activities required to get the product to the customers – including warehousing and order fulfillment. Marketing and sale (I love this part because I work in marketing) are the activities involving getting buyers to buy the product and advertising.
Service is the activities like customer support, repair services etc.
The supporting activities are the activities at the top in the image. Porter (yes its my friend Michael E. Porter again – did you read SEO the Porter Way? Porter talks about 4 supporting activities. First procurement – this is the activities involving in purchasing the raw material and other input for the value creating activities. Technology Development – this includes research and development and other technology development used to support the value chain activities.
The human resource management – is everything regarding recruiting development and compensation of employees. At last we have the firm infrastructure – this could be activities such as finance, legal, quality management etc. If you like to read more about the value chain – you should read Michael E. Porter: Competitive Advantage: Creating and Sustaining Superior Performance.
Okay this was the normal company chain. Let’s change our focus to the customers now.
Customer value chain
If you want to give the customer something extra – a digital value – you’ll have to know the customer value chain too. So here it is.
It’s inspired from the buying decision model. First the customer has a need for something. Let’s say the buyer (let’s call him Joe) needs some transportation from his home to his work. He starts to search for solutions – he could take his bike, a bus or maybe buy a car. Well Joe likes to drive a car so he will do that. He goes to his car dealer – try different models, lets his wife pick the color (right?) and buy it.
Now he uses it for work every day. And the effect is that he now has transportation to his job.
The Value Matric Model
Now what will happen if we put the two models together? We get the awesome Value Matric Model
Webshop – Selling clothes
You have a webshop selling clothes. You don’t have any inbound logistics and you don’t have any operations – because you are not producing the clothes yourself. All you do having your website where you are selling your clothes. So you have marketing and sale, outbout logistics (you send the clothes to your customers and you have some customer support.
You webshop is very basic – all you do for the customer helping with the buying – right? So this will look like this
So the question is how will develop your webshop to give your customer more value. The customers have a need for clothes. Maybe its getting cold outside and need warm clothes, or its summertime and they need some light summer clothes. Can you help them in their search? Yes you can. Write about fashion, which colors are hot this year? How can you put different clothes together? Maybe the customer can type their measurement and then search for the clothes that fits them?
Or take a look at this 3D clothes shop. It will be an event to go to your shop and get the clothes. Do you have a blog or social network tell people about all your new clothes? Keep the conversation going. Maybe you have a corporation with a clothes cleaning shop. You see it’s only the imagination that stopping you – remember to think about the customer value chain.
So you might find that you will develop your webshop in the green spots.
Analyze your competitors web shop too using this model to get ideas – or to get ideas different than your competitors. I better stop now and get my coffee.
As always – take care and enjoy…