Developing a Solutions Focus to Add Customer Value Part II: What Are Solutions, Exactly?

My original “Solutions Focus” blog post is by far the most popular of any I have written, which at first surprised me … but then, not really. Over the years I have seen businesses and nonprofits struggle with how to define, create and market solutions. For example, I’ve met with many companies in the technology space that were preoccupied with selling software applications they had created—they called them “solutions.” The term is technically correct, in that “solutions” are answers to problems. And some companies or organizations did have problems for which these apps were good solutions.

So, there should have been a natural, organic meeting of the minds: solution seller and buyer connect, and everyone is happy. Sometimes this happened. More often it did not. The problem? Mismatched expectations. Sellers assumed that if they sold “solutions” they would be more successful in the marketplace. They defined success as … making more money, of course, but more than that: they wanted to be able to re-engage with their customers, to be seen as trusted advisors with valuable offerings. They also wanted to be able to sell more products and services. And this didn’t necessarily occur.  

Why? Because, as it turned out, the real buyers (meaning, the decision-makers who controlled budgets and consideration of bigger-ticket items) were not being kept up at night by the problems for which the solutions were being designed and offered. They were concerned, of course—but they appointed others to address those problems. They worked on big-picture business questions, like profitability and accountability and efficiency. The “solutions” fit into these buckets, but they were solutions only in the micro sense of the word. They weren’t SOLUTIONS.

This insight led me to develop a process for structuring solutions that are focused on customer value.

The one potential obstacle, and for many organizations it’s a huge one, is that in order to do this well you have to know what’s important to the customer. I do not say this lightly or ironically. You have to either have data that suggests what customers want or need, or a hypothesis that you have something exceptional that they’re going to crave when they experience it.

By this I don’t mean “a commerce application that serves up related content as additional purchase options.” (I have intentionally chosen for this example something that has long been an industry standard—but at the time I started working on this idea it was new and very exciting.) This is surely something that customers would buy, and they did. Hard-working web developers and systems integrators did. But CTOs, CIOs and CMOs (i.e., the ones with the deeper pockets, if not the broader visions) were buying “an online commerce system that collects data on items viewed and sold, automatically cross-sells based on viewer/buyer preferences, and integrates with inventory management systems to create an efficient, state-of-the-art customer experience both on- and offline.” All this to say, they were interested in the big picture: data, cross-selling, integration, and a seamless customer experience.

How can you anticipate what is preoccupying your buyer? Read analyst reports, listen to your existing customers, talk to prospective customers, follow the trade press in your industry.

Now, assuming that you have some idea of the big picture, start by articulating it. On the first chart below, the big picture is called SOLUTION/VALUE. Most organizations, and businesses in particular, have at least one. Boutique firms may have only one. That’s fine.

Now, consider all of the kinds of things that your organization does or has at its disposal: widgets, programs, whatever. These are at the bottom of the chart. They are called ACTIVITIES.

In theory, these ACTIVITIES combine in various forms to create the middle tier, which are the CAPABILITIES. For example, Commerce would be a capability, as would Data Management.

Let’s pause and note here that some companies excel at selling their CAPABILITIES. There is a lot of money to be made at this level. It’s just not necessarily the level at which one creates relationships—that’s the SOLUTION/VALUE level. The math usually works out to suggest that one has to sell a lot of CAPABILITIES relative to SOLUTION/VALUEs. That’s more than sufficient for a lot of companies.

However, if once you look at the CAPABILITIES you notice that you can also combined them in various forms to create SOLUTIONS, just as you combined the ACTIVITIES to create CAPABILITIES, then you have something important and useful—and, in general, far more potentially profitable, to discuss with a client/customer.

Also, should you find that you have ACTIVITIES and CAPABILITIES that are being utilized a great deal, you have some data about how and where to invest (and price your services). On the other hand, if you have some that aren’t being applied very much, this exercise gives you the opportunity to reevaluate their relevance. You might think about new ways to utilize them, or sell them off, or discontinue them.

This is admittedly a bit abstract, so I’ve created an extremely simplified example that might apply to a boutique consultancy, or be a section of the chart of a large financial services organization (in which case “Wealth Management” might be in the CAPABILITIES row). Please note that this chart is EXTREMELY simplified; otherwise, it would be largely illegible. The chart does not begin to reflect the reality of the complex world of wealth management, and the combinations may be arguable. But the idea is to be able to see the combinations and permutations that create the “Wealth Management” solution.

A note: I created this blog as a vehicle to share my ideas and insights from my work. For this exercise I feel strongly that organizations need professional guidance. Outside perspective is really important, as is the capability to articulate the value message from the outside in. I don’t love to promote myself, but this is the core of my expertise. I have worked with many organizations, particularly in service industries, to develop solutions frameworks like this one.  Each in its own way has led to something new for the organization.

I would be happy and honored to assist you should this be of interest.



Copyright (C) 2013 Carol R. Trager. All rights reserved.

Branding: Conquering Skepticism, Building Trust

I don’t have a single entry for February! The snow certainly didn’t inspire me. It seems that I do best when I come across an idea that I can share in the equivalent of a page or two. In the past four weeks nothing I’ve wanted to share fit that bill. Except for the following, although it took me some time to figure out what about it I wanted to say.

The esteemed Stanford Social Innovation Review has just published this article, “The Role of Brand in the Nonprofit Sector.” There is a lot about the article that I like, and I think it’s worth reading if you have an interest in the sector.

The article is written by Nathalie Kylander and Christopher Stone of Harvard’s Hauser Center for Nonprofit Organizations, who used insights from research to create a framework designed to help nonprofits “allow their brands to contribute to sustaining their social impact, serving their mission, and staying true to their organization’s values and culture.” They define a brand as “a psychological construct held in the minds of all those aware of the branded product, personal, organization, or movement.” They define brand management—and I thought this was a cool definition—as “the work of managing those psychological associations.”

I’m not going to describe the framework, IDEA, in detail; however, its principles are brand integrity, democracy, ethics and affinity. Brand integrity is essentially integrated brand management, taking care to include the importance of connecting all stakeholders with a common sense of what they do and why it matters. Democracy suggests that it’s unrealistic to believe that we can tightly control brands in an era of individualism and distributed authoring (i.e., social media). I acknowledge that my initial reaction was entirely defensive. Certainly I agree with the suggestion that embracing brand democracy requires “parameters.” It has not yet been my experience that providing those parameters is sufficient. Ethics is about remaining true to core values. Affinity has to do with managing brands where multiple organizations are acting as partners. Kylander and Stone suggest that this framework has the potential to distinguish nonprofit brand management.

Again, this is all worth reading. Now, what I want to address is the introduction to IDEA, which describes nonprofits’ sources of skepticism about branding.

However, before beginning an important note: the writers make the point that the sources of skepticism discussed below have corresponding sources of pride: in mission; in collaborative cultures; in values; and in supportive relationships. IDEA is designed to build on the pride.

Now, my two cents about the skepticism and the assumptions that underlie it.

1. The association of branding with the commercial pursuit of monetary gain. In my experience, there is some distaste for branding among nonprofit leaders, although there is growing recognition (and this is supported by the research) that branding has become necessary and can even be beneficial. One of the reasons for skepticism, if not outright hostility, about branding has to do with the expense—or, more particularly, the cost/benefit. Most nonprofit leaders are, or have been, practitioners in their fields and prefer to direct their financial and human resources to the work of making a difference. They do not want to appear to be “selling.” Entirely understandable.

The article doesn’t really address what is quite possibly the most important benefit of nonprofit branding: reputation management. The flip side of employing principles of branding to “sell” the essential services of nonprofits is building and protecting oganizations’ most important asset (after their people): their reputations. Nonprofit marketers seek to build reputations for two central purposes: to attract more consumers (thereby delivering on the mission) and to attract more philanthropic dollars (thereby enabling organizations to survive if not thrive). And they protect reputations for two central purposes: to attract more consumers (mission) and to attract more philanthropic dollars (survival).

There’s something else. I often recall a panel discussion in which a reporter stated, flat out, that she was not interested in telling the stories of nonprofits’ good works. That, she said, is what we expect from nonprofits. No, the stories that she wanted to tell were those of the scandals. Stories about scandals cast a pall over the sector. This leaves all organizations vulnerable, and those without strong brand management more vulnerable.

2. The perception that brand management is a top-down shortcut to avoid a participatory strategic planning process. Wow. I certainly have seen organizations try to use branding as a shortcut for strategic planning (or strategy)—but never with the goal of avoiding a participatory process. There is palpable anger behind this hypothesis. It really makes me wonder at the motivations of those who inspire it and those who believe it.

No responsible organization brands itself in the absence of strategy. Any such endeavor is unimaginably cynical … Unless. Unless. Unless the branding effort is part of a shot across the bow of the organization to say, “We need to be different and this is what you now need to live up to.” (“These concerns can be especially great when a new leader initiates a rebranding as part of an aggressive effort to change the way an organization works.”)

I have worked with an executive management team to do this. The emphasis of the work we did was on quality, and it’s something that the organization had to address at that moment in time. I’m not sure our branding initiative lit up the entire staff, but it inspired the leaders and injected a whole new energy into their work; in fact, it inspired some important questions about strategy.  

3. The concern that branding is vain, grounded in distrust of the values motivating the process. Distrust unfortunately seems to be a theme here. Well, if I was giving my heart and soul to work that got boiled down to cutesy campaigns like “save a slave,” as the researchers write, I would be angry too. I’ve also seen branding work proposing that an individual (a charismatic CEO) be tapped to “personify” the brand. This flies in the face of everything that nonprofits are and should be; i.e., about the mission. To the degree that it goes on, it’s no wonder that teams are frustrated. “Vain” branding should be stopped at all costs. Agree 100%.

4. The issue of powerful brands overshadowing weaker brands, “reinforcing, rather than correcting, imbalances of power among partners.” Power in every form is obviously a very complex issue. Good marketers know when they have to exercise leverage, and it’s almost always in the name of reputation management, which is almost always in the name of mission and philanthropy. Resentment of stronger brands in understandable. It’s not limited to the nonprofit sector, either. It feels Darwinian and it probably is.

My favorite quote from the article is attributed to brand consultant Will Novy-Hildesley. He says, “Brand is an exquisite bridge between program strategy and external communications.”

This is a stupendous idea. One should never venture onto a bridge without trust that the bridge will hold their weight and allow them to reach a desired destination. For brand management to be successful in helping organizations reach their destinations--no matter what the sector--it and the people who do it must be invested with that fundamental trust.

So let's suspend our skepticism in order to get there.