Vantage Blog

10
Dec
2012

Unlocking value via the “product surround”

Every business needs to regularly review its offering to find fresh ways to meet customer needs.  But where do you focus?

In every product or service there is a core product, the substance.  As a rule of thumb the core is normally about 80% of the cost but can provide only 20% of the impact.


It is the product surround, which at a much lower level of cost - say 20% - could contribute 80% of the customer impact. For example for a product like Pura the 'core' is just milk - very much a commodity.  The surround is made up of the variants, packaging, branding, marketing, free recipes etc.  It's these 'product surround' aspects that significantly impact the success or otherwise of the range in the market. A great example of a business that has reinvented its offering by focusing on the 'product surround' is the recent BRW Fast 100 winner Jetts.

 

The approach they took was to think through the customer problems and issues with how traditional gyms provided services.

Customer Problem:   Jetts Offer:
"Don’t like being tied in for years"   No Contracts
"Too expensive"   Weekly Fees
"Too crowded"   No Classes
"Not open when I want it"   Open 24/7


Jetts appear to have reduced some of the normal 'core' gym costs and innovated in the product surround.   They have doubled their revenue in the last 12 months – not bad for an industry littered with closures and receiverships!

So in reviewing your offering think about the following questions:
  • Can you define what is core and what is surround for each of your current products and services? 
  • Can you list the key challenges and issues for your target market?
  • What could you build, refine or deliver better via your product surround to solve those challenges?


 A simple exercise that may well unlock real value for you and your customers.

James Atkins, Vantage Strategy & Marketing

This article is linked to James' Google+ profile

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