Value Service

Value beats volume for smart business growth

This is the fourth in a series of posts exploring the growing opportunities of strategic sustainability.  The first summarised 10 hidden opportunities and the second explored 4 levels of sustainability strategy.   Then we started to explore the opportunities.  First up was “The trap of one-way business thinking“.  Today we’re talking volume vs value.

Business performance has traditionally been measured in volume – volume of units sold. Success was selling more – more cars, more litres of solvent, more petroleum.

But that’s starting to change. Today most people rarely buy CD albums of music – instead they “rent” music as a service one track at a time. Computer software is increasingly delivered “in the Cloud” – Software as a Service is the growing norm for wordprocessing, spreadsheets and business accounting.

The development of new business opportunities for delivering a valuable service rather than a commodity product isn’t just happening for digital products. Examples include input materials in industry, from carpet tiles to industrial solvent.

Instead of buying carpet tiles for your next office refurbishment, could you “hire” them? Instead of buying and disposing of solvent in your factory, could a service company install a purpose-built recycling plant that improve your job quality and reduces your waste disposal costs?

We want results, not “stuff”

More and more entrepreneurs are looking for opportunities and strategies to deliver growth in service and value, not volume.  (AirBNB delivers accomodation without owning a bed, Uber delivers food without owning a single restaurant.)

The race is on to deliver self-driving, autonomous vehicles – because delivering mobility as a service offers massive efficiencies as well as convenience.

“How cars are owned and utilized today could not be less efficient: They are driven 4 percent of the time. If mobility comes to be viewed as an on-demand service—rather than private ownership of expensive, two-ton assemblages of steel, glass, plastic, and rubber—the material savings would be immense. “

Could your business hold the opportunity to deliver a valuable service?

This opportunity is can be difficult to see, but it’s worth checking in on. What DOES your customer value about what you do? What’s going on in your industry?

Where are there repeated, expensive wastes in your supply chain? What might be possible if you looked for opportunities to turn sales (or purchases) into a service?

There’s an old saying that “no-one buys a drill bit at the hardware store because they want a drill bit – what they want is a hole in the wall”. Actually, what they really want is to hang a picture or make cabinet – find the underlying need and you could uncover a whole new business or career.

The more you know about the end value your customer places on your product or service, the better equipped you will be to explore their potential life time value to your business at a whole new level.

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