The Value Proposition of Use


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Traditional sales and marketing evolved with linear thinking and the traditional sales funnel. In the past Goods-Dominant Logic thinking created a cost-plus price model for products which limits market scale. Scale must be done by creating something better, faster or cheaper or there must be the availability of increasing markets. Many of our products/services are limited because of this view. They were developed to sell feature and benefits at the point of transaction and not value where use occurs.

Traditional Marketing

What we fail to view is connectivity within an environment allows for the greatest opportunity for growth. If our products/services are designed to derive “value in use”, additional forms of innovation can easily occur. This is the opportunity Service Dominant Logic presents for organizations.

Successful products and services are evolving into an eco-system, and we are only as effective as our value proposition at the point of use. At the heart of this system is Service Dominant Logic.

Sd Logic flow

Business models are changing to more service style proposition versus just transferring the ownership of equipment. They are recognizing the advantage of creating markets for use. This is not limited to digital propositions such as Amazon’s Kindle or Apples “I” series. It is also utilized by firms such as Zip Car, Rolls Royce and Akzo Nobel.

From the book, Value & Worth: Creating New Markets in the Digital Economy:

Once we understand it this way, we begin to see why context should be the focus for the future. This is an important change in mindset. Previously we thought of value of an offering as the essence of an object. With this shift in mindset, we can now consider value as the goodness arising from the experience of the object and by logical extension; we have to consider that experience to be part of a system of objects and people in creating value. So objects are not seen as having ‘intrinsic’ value, but are ‘positional’ within a context.

It is these concepts that will deliver future growth. A Lean value stream becomes first and foremost the listening post for the customer (prospect). It provides the customer with the information, technology, and support that is required. This is done through an understanding of what is needed in the customer’s “job to be done” value proposition. The value proposition of use. A Lean Enterprise will react to these offerings more quickly and more effectively than a traditional company. This is how the five principles of Lean Thinking complement Service Dominant Logic thinking.

  1. We identify value at the place of use.
  2. We map value through the Marketing Gateway of SDCA, PDCA, EDCA
  3. We create flow by segment the value proposition determined by the customer.
  4. We establish pull through the value proposition offered at the place of use.
  5. We seek perfection through the application of continuous improvement with the customer.

For a short version of Service Dominant Logic or start here with the long version in the Lean Service Design Training module.

This week, April 22nd thru the 26th, we will concentrate on how to grow, or scale-up your small business. I will be scaling-up the entire week culminating in a webinar, The Lean Scale Up, which is followed by a period of Q & A on the afternoon of April 26th. Only registered participants will be invited to webinar and Q & A.

Republished with author's permission from original post.

Joseph Dager
Business901 is a firm specializing in bringing the continuous improvement process to the sales and marketing arena. He has authored the books the Lean Marketing House, Marketing with A3 and Marketing with PDCA. The Business901 Blog and Podcast includes many leading edge thinkers and has been featured numerous times for its contributions to the Bloomberg's Business Week Exchange.


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