What you need to understand to build a strong value offering
There are only two directions a business can take to build a strong value offering:
1 – Enhancing an existing value the market
2 – Bringing a new value to the market
Generally speaking, 1 is weak and 2 is strong. As I’ve argued many times before, delivering a greater degree of something is far less powerful than being the first to offer that something. “Only is better than best”. However this perhaps makes things sound easier than they actually are.
In truth there is something to be said for strategy 1: at least you know people care about what you’re offering. There is no speculation required. The market has established that X is something people want, and you’re simply going to give them more of it. This makes such strategies rational, safe, comforting, and of course popular.
Strategy 2 on the other hand is fraught with risks.
The most obvious of these is the possibility that you are going to bring a value offering to the table that people don’t want. But that’s only the half of it. Perhaps even more challenging is understanding what constitutes new value in the first place.
When trying to build a strong value offering, many people make the error of thinking that if they are doing something “new” they are by definition bringing “new value”. This is not the case. The word “value” is very carefully chosen to represent the result of what you are offering, not the thing itself. Just because your product is different from others that doesn’t mean it offers different value – or any value at all for that matter.
An obvious example of where you see this misunderstanding is with food and drink products that utilise quirky ingredients.
People think that if you manage to bottle say, cactus water (I don’t know if that’s a thing but I imagine it probably is), then you’ll have a hit product on your hands because it’s new and unique. But this is incorrect. People won’t buy something like cactus water just because it’s different (at least not more than once). They’ll only buy it if it provides new value. At this point a founder will typically say “of course it provides value – it’s packed with anti-oxidants / vitamin C / protein / whatever”. Fine, maybe that’s true. But it’s not new value. You’re just giving people something they can get elsewhere in a different, unfamiliar shape. That’s not a compelling offering – especially as consumers are inherently conservative.
Another example of “faux value” you see a lot these days comes through brands trying to make soap / toothbrushes / bed sheets / socks / etc. direct-to-consumer propositions. You know exactly the type of brand I’m talking about; those pseudo Allbirds / Caspar / Hims kind of outfits, also known as “blands”. Arguably all these brands are children of the original “bland” (which was anything but), Dollar Shave Club. What they miss however is that shaving as a category was a very special case that was almost uniquely well served by a DTC offering. Dollar Shave Club’s innovations brought genuine new value to that category in a way that most of its heirs do not with theirs. Yes, they are all “different”, as they will delight in telling us. But they are not different in a meaningful, valuable way.
A final form of dubious value offering worth mentioning occurs when generic brands tie themselves to loosely connected social causes. When social causes work well – and do represent strong value offerings – is when they are integral to the category in question (e.g. Lush and animal testing). But generally the issue is one or two clicks too far removed from the product in question, and therefore can’t be said to be bringing real value to the consumer.
Once you understand this distinction between value and difference then you are well placed to judge your own offering critically and realistically. You must ask yourself whether you are bringing a new and desirable end benefit to the consumer. This won’t always prevent you from getting it wrong, but I’d suggest it will rescue you from the most egregious cases.
The next level by which you can judge your offering would be to see if it fits into any of these three following archetypes. I would suggest that most strong unique value offerings can be bracketed into one of these – and if yours does too then its a good sign.
New value type 1 – Pre-validated attribute imported to new category
Apologies for the inelegant phrasing here, but I’m trying to be specific. What I mean by this is you take an attribute which you know people like in a reasonably adjacent category, and apply it to one that it hasn’t yet reached. A couple of textbook examples I’ve mentioned before but which illustrate this nicely:
- Tesla bringing premium performance (an important car attribute) to the category of electric cars (a category where it wasn’t present).
- My client Doisy & Dam bringing ethical dark chocolate (a huge category in its own right), to the category of impulse confectionery (hitherto exclusively trashy milk chocolate)
This is a variation on the definition of creativity being the combination of two known quantities in order to make something new. As you can see this approach requires a practical difference in product, but one which is reasonably low risk due to the pre-validation.
New value type 2 – Inversion of category norm
For many brands it will be easier to introduce this second type of value to a category, because it doesn’t rely on having a drastically different product. Instead what happens here is to play on and reject a convention of the category you’re in, doing the opposite and thus driving up distinctiveness. For example:
- Liquid Death positioning water in an aggressive “heavy metal” manner, rather than playing on purity and goodness
- Lily’s Kitchen’s elegant “human food for pets” proposition
- Dyson making vacuum cleaners into luxury status symbols
Admittedly Dyson would probably claim a more meaningful value offering than that, but let’s face it we know that’s a big part of it. As you can see this route is more brand driven than value type 1, but is still defensible because by rejecting conventions other brands rely on you prevent them from following.
New value type 3 – New use case
One last way of looking at the problem is with new cases within a category. In other words, taking a familiar product and adjusting it to be used in a different context or by a different audience than the category mainstream. For example:
- Finisterre, a Cornish fashion brand, making surf clothes (old news) but focusing on the neglected use case of cold water surfing
- Nintendo Switch creating the first flagship games console which is also portable
You’ll notice that these are all fairly fluid categories, and various great brands arguably click into two or even three of them – as well as venturing into more unusual models. However as broad brush strokes, these cover a lot of ground.
I don’t intend this analysis to help you identify new ways of adding value. There are better ways of doing that. But I do think it can help challenge some of the vanities which trick us into thinking we’re doing something amazing when really we aren’t.
Always remember there is no more pervasive disease in founderdom than caring too much about something ordinary punters simply doesn’t give a damn about. So judge yourself harshly. Because if you don’t, the market will.