THE TRADE-OFF MAP: Simply Mapping All Customer Needs, Selections, and Experiences in a Market

THE TRADE-OFF MAPSimply Mapping All Customer Needs, Selections, and Experiences in a Market

Dr. Rod King

Inexpensively Leapfrogging the Competition

ALTERNATIVES: ………………Trade-off Quotient (TQ)= Pain/Delight= Inconvenience/Fidelity= Customer Exp. Quotient

SELECTION/ACTION: ………

DELIGHT-PAIN BALANCE Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal

• Personalization (Identity/Character)

• Differentiation (Social Status/Cachet)

• Quality (Content/Performance)

DELIGHT (Fidelity)

• Complexity (Time)

• Inaccessibility/Unavailability

• Cost (Price)

PAIN (Inconvenience)

TOOL

Copyright 2009. Dr. Rod King. [email protected] & http://tradeoffmap.ning.com & http://twitter.com/RodKuhnKing

MARKET (CUSTOMER MAIN DESIRED EXPERIENCE/INTENT/NEED/OBJECTIVE/JOB): …………………………………………………………………..……….

mailto:[email protected]

http://businessmodels.ning.com/

http://twitter.com/RodKuhnKing


TRADE-OFF PARADIGMFactors for Selecting Alternative Products, Services, and Business Models in a Market

Customer Experience Cycle: * Awareness * Order/Request * Purchase * Delivery/Storage * Main Usage * Supplementary/Complementary Usage & Context * Maintenance * Disposal





TRADE-OFF MAP for a Market(“Trade-off Equation” by Dr. Rod King: Trade-off Quotient = Pain/Delight = Customer Experience Quotient)

(-): PAIN

(+): DELIGHTDisruption Spot

Luxury Spot

Strategic Choice

High

Low

Low High

MARKET (CUSTOMER JOB): ………………………………….Period/Year: …………….…………………………………………..

Zero Trade-off(“What customers ultimately want:Free, Perfect, Now”)




VISUALLY MAKING BETTER DECISIONS

Visual decision-making relating to:• Hit Zone: SuperHit/Sweet Spot/Luxury Spot/Disruption Spot• Fidelity Belly: Oasis/Volcano/Green Ocean/No Man’s Land/Red Ocean

BENEFITS OF THE TRADE-OFF MAP(Trade-Off Analysis &

Decision-making)

PREDICTING ‘HITS’ & ‘FLOPS’

• Design goals for ‘Hit’ products/services• Competitive Degree of Trade-off• Competitive Value Quotient (VQ)• Evaluating Unique Value Propositions • Determining in what spot to invest

VISUAL COMPETITIVE STRATEGIES

• Fidelity Strategy for Value Chain• Inconvenience Strategy for Value Chain• SuperHit Strategy (“existing market”)• Zero Trade-off Strategy (“new or hybrid ecosystem; uncontested market”)

VISUALLY ANALYZING A MARKET

• Identifying gaps and non-customers• Patterns in the evolution of products, services, and business models/markets• Degree of Trade-off of product/service• Value Quotient of product/service

VISUAL BUSINESS MODEL INNOVATION

Redesigning business model/value chain:• SuperHit• Sweet Spot• Luxury Spot• Disruption Spot

VISUAL BUSINESS INTELLIGENCE/MNGT

• Self-monitoring & management of performance of product/service• Tracking and monitoring of competitors• Tracking push and pull effects of technological innovation & competition

IMPROVING CUSTOMER EXPERIENCES

• Maximizing customer fidelity (delight)• Minimizing inconvenience (pain)• Significantly reducing the Degree of Trade-off in products and services• Greatly increasing the Value Quotient

SIMPLIFYING COMPETITVE ANALYSIS

• Visual Benchmarking (Profiling)• Visual Positioning (Branding)• Competitive (Relative) Degree of Trade-off & Switching• Competitive Value Quotient






TRADE-OFF MAP Showing the Hit Zone & Fidelity Belly Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal

PAIN: Inconvenience

DELIGHT:Fidelity

‘Hit’ Zone

Disruption Spot

Luxury Spot

Zero Trade-off(cf. “Wrecking-ball moment”)

Strategic Choice

High

Low

Low High

Fidelity Belly(Super-)convenience





Examples of PRODUCTS/SERVICES

INTHE HIT ZONE

(2009)

LUXURY SPOT

• iPhone (Communication/Computing)• Disneyland (Entertainment)• Porsche (Transportation)• Singapore Airlines (Transportation)• Louis Vuitton (Fashion)

DISRUPTION SPOT

• Southwest Airlines (Transportation)• Nintendo – Wii (Consumer Electronics)• Wal-Mart (Retailer); IKEA (Furniture)• YouTube (Knowledge – Media)• Netflix (Entertainment – Media)

SUPERHIT

• Google – Search (Knowledge)• Dell (Knowledge)• Amazon.com (Knowledge/Retail)• Swatch (Consumer Accessory)

SWEET SPOT

• Cirque du Soleil (Entertainment)• Target (Retail)• Borders (Knowledge)• Barnes & Noble (Knowledge)• FedEx (Transportation – Packages)





IDENTITY (‘CHARACTER’)

• Unique/Not one of the crowd or masses• Rare• Special place and social context• Privileged/Elite/Cognoscenti

Characteristics & Strategies of PRODUCTS/SERVICES

IN

QUALITY (CONTENT/PERFORMANCE)

• Hard-to-beat level of fidelity• Business requires strong and unique core competence• Maintaining luxury spot is difficult due to disruptive technology and innovation

LOVE (LOYALTY/FUN)

• Customers love product/service• Easily recognizable brand• Easily gains media attention• Great customer service

AVAILABILITY/ACCESSIBILITY

• Exclusive• Rare

BUSINESS MODEL (SIMPLICITY)

• Relies on niche or well-off customers• Customers are in the ‘short head’ of the customer spectrum (top of pyramid)• Higher profit margin• Big budget PR/advertising

NEED

• Customers don’t really need to have (all features of) product/service• Customers can live without product/ service since it is not a ‘basic’ need

COST (PRICE)

• Expensive• Premium price

SOCIAL AURA & CACHET

• High social aura and value• High social cachet• Cool/Creative/Rebellious• Hot/Unique• A “treat”


THE LUXURY SPOT(“Super-fidelity”)




IDENTITY (‘CHARACTER’)

• Usually has bland identity• Not special• Often involves commoditization• Common/the masses


IN

QUALITY (CONTENT/PERFORMANCE)

• Good enough-quality; hybrid; prototype• Hard-to-beat level of convenience• Simple to use; focus is on core function• Many iterations for higher convenience• Requires disruptive technology/model

LOVE (LOYALTY/FUN)

• Customers habitually need product/ service especially at lowest price• Brand is not a darling of the media• Customers do not have strong loyalty to product/service

ACCESSIBILITY/AVAILABILITY

• Relatively ubiquitous• Easy to access, get, and/or use• Wide coverage

BUSINESS MODEL (SIMPLICITY)

• Relies on mass market; word of mouth• Customers are in ‘long tail’ of customer spectrum (bottom of pyramid)• Lower profit margin• Requires economies of scale & high vol.

NEED

• Customers desperately or daily need product/service• Customers can hardly live without product/service

COST (PRICE)

• Inexpensive• Low price/Relatively cheap/Free

SOCIAL AURA & CACHET

• Low or no social aura• Low or no social cachet


THE DISRUPTION SPOT(“Super-convenience”)




Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing

Customer Experience/Value Proposition: …………………………………………………………………………….…………………

TRADE-OFF STRATEGY For Luxury SpotStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal

Name of Business: ………………………………………………………………………………………………….… Year: ……………………

Sector/Ecosystem/Industry: ………………………………………………………………………………………………………………………

Mission/Vision: ……………………………..……………………………………………………………………………………….…………………

Quality (Content/ Performance)

Accessibility/Availa-bility

Cost (Price)

Social Aura/Cachet

Identity ('Character')

Simplicity

Love (Loyalty/Fun)

Need

0

5

10

Trade-Off Strategy for Typical Product/Service inLuxury Spot

Zero Trade-off Luxury Spot

ELEMENTS OF TRADE-OFF STRATEGY FOR LUXURY SPOT-PRODUCT/SERVICE:

Trade-off (Value Chain) Strategy• DELIGHT (Fidelity) TACTICS:- Eliminate ……………………………………………- Reduce ……………………………..…..……………- Increase ……………………….……….……………- Create/Procure ……………….…….……………

• PAIN (Inconvenience) TACTICS:- Eliminate ……………………………………………- Reduce ……………………………..…..……………- Increase ……………………….……….……………- Create/Procure ……………….…….……………

Customer Value PropositionHigh performance (brand) at exclusive price

Targeted Customer Segment (Interviewees)Well-to-do customers in the ‘short head’




Copyright 2009. Dr. Rod King. [email protected] & http://businessmodels.ning.com & http://twitter.com/RodKuhnKing

TRADE-OFF STRATEGY For Disruption SpotStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal

Name of Business: ………………………………………………………………………………………………….… Year: ……………………

Sector/Ecosystem/Industry: ………………………………………………………………………………………………………………………

Mission/Vision: ……………………………..……………………………………………………………………………………….…………………

Quality (Content/ Performance)

Accessibility/Availa-bility

Cost (Price)

Social Aura/Cachet

Identity ('Character')

Simplicity

Love (Loyalty/Fun)

Need

0

5

10

Trade-Off Strategy for Typical Product/Service in Disruption Spot

Zero Trade-off Disruption Spot

ELEMENTS OF TRADE-OFF STRATEGY FOR DISRUPTION SPOT-PRODUCT/SERVICE:

Trade-off (Value Chain) Strategy• DELIGHT (Fidelity) TACTICS:- Eliminate ……………………………………………- Reduce ……………………………..…..……………- Increase ……………………….……….……………- Create/Procure ……………….…….……………

• PAIN (Inconvenience) TACTICS:- Eliminate ……………………………………………- Reduce ……………………………..…..……………- Increase ……………………….……….……………- Create/Procure ……………….…….……………

Customer Value PropositionGood enough-performance (quality) at a low price

Targeted Customer Segment (Interviewees)The masses/customers in ‘long tail’

Customer Experience/Value Proposition: …………………………………………………………………………….…………………





TRADE-OFF INTERACTION DIAGRAMInteraction of Factors Influencing Selection of a Product, Service, or Business Model

CUSTOMER

Quality(Content/

Performance)Accessibility/

Availability

Social Aura/Cachet

Need

Simplicity

Love (Loyalty/Fun) Cost (Price)

Identity(‘Character’)




Examples of PRODUCTS/SERVICES

TRAPPED INTHE FIDELITY BELLY

(2009)

NO MAN’S LAND

• Traditional Newspapers (Knowledge)• Earthlink (Knowledge – Internet)• Early Electric Cars (Transportation)

GREEN OCEAN

• Small independent bookstores (Knowledge)• NHL – TV Broadcast (Entertainment)• Special products/services or niches: kids (toys); elderly; disable

RED OCEAN

• Yugo Car (Transportation)• Webvan (Food)• Kodal’s 1st Digital Camera (Knowledge)• Teledesic (Communications)• General Magic’s Telescript (Knowledge)

OASIS

• Segway (Transportation)• Hulu (Knowledge – Internet TV)• Music CDs (Entertainment)• Starbucks (Food/Entertainment)• Mariott Hotels (Hospitality)

VOLCANO

• Amazon – Kindle (Knowledge)• Movie Theaters (Entertainment)• Blu-Ray (Entertainment – DVD Player)• Apple’s Newton – PDA (Knowledge – Computing)






INTHE FIDELITY BELLY

NO MAN’S LAND

• Existing customers are dissatisfied and looking for better alternatives• Declining customer base• Obsolete or inappropriate technology

GREEN OCEAN

• Less frequently used• Low level or commoditized technology• Commodity; ‘bloody’ price wars• Existing customers are dissatisfied; niche such as kids, elderly, and/or disable

RED OCEAN

• Expensive; Largely unavailable• Difficult to use; less frequently used• Existing customers dislike product/ service and eventually stop using it• Mismatched technology: ahead of time

OASIS

• Good enough to use• Technology is in up/down transition• Apathetic or disappointed customers: neither loved nor desperately needed product

VOLCANO

• Expensive; Largely unavailable• Appeals to early adopters or fans• Difficult to use; less frequently used• Most customers are dissatisfied and looking for better alternatives






CUSTOMER NEEDS, SELECTIONS, AND EXPERIENCESStage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal

PAIN: Inconvenience

DELIGHT:Fidelity

‘Hit’ Zone

Fidelity Belly(Super-)convenience

High Fidelity

Low Fidelity

Inconvenience


Disruption Spot-Need/Experience

SuperHit-Need/Experience

Sweet Spot-Need/Experience

Luxury Spot-Need/Experienc

e

Zero Trade-off-Experience(cf. “Wrecking-ball moment”)





PAIN: Inconvenience

DELIGHT:Fidelity

‘Hit’ Zone

Convenience Inconvenience

High-end

Low-end

Disruption Spot-Need/Experience

SuperHit-Need/Experience

Green Ocean- Need/Experience

Oasis-Need/Experience

Sweet Spot-Need/Experience

No Man’s Land- Need/Experience

Volcano- Need/Experience

Luxury Spot-Need/Experienc

e

Red Ocean- Need/Experience

Fidelity Belly


CATEGORIES OF CUSTOMER NEEDS, SELECTIONS, AND EXPERIENCES Stage of Customer Experience Cycle: Adoption/Usage/Maintenance/Disposal

Zero Trade-off-Experience(cf. “Wrecking-ball moment”)





TRADE-OFF MAP For Computing MarketPatterns in the Evolution of Computing Ecosystems

PAIN: Inconvenience

DELIGHT:Fidelity

‘Hit’ Zone

Convenience Inconvenience

High-end

Low-end

Disruption Spot –• Desktop Computer• Laptop Computer

SuperHit –• Mobile/Handheld

Computer• Internet

Green Ocean –• Calculator

Oasis –• Analog Mini-

Computer

Sweet Spot –• Mini-Computer

(Server)

No Man’s Land –• Slide Rule

Volcano –• Analog Mainframe

Computer

Luxury Spot –• Mainframe/

Super-Computer

Red Ocean –• Calculation (Log)

Charts

Fidelity Belly

Zero Trade-off(cf. “Wrecking-ball moment”)

MARKET (CUSTOMER JOB): COMPUTING at Work/Home/Outdoors Period/Year: ……………………..




WHY?

MARKET(CUSTOMER DESIRE/

NEED/JOB):

WHEN?

HOW MUCH?

WHO?

HOW? WHAT NEXT?

WHAT? WHERE?





TRADE-OFF MAP

Simply organizing and making decisions for ‘hit’ products, services, and business modelsObserving patterns in the evolution of systems, subsystems, and environment

SUITE OF TOOLS FOR VISUAL TRADE-OFF ANALYSIS &

DECISION-MAKING

TRADE-OFF SPECTRUM

Easily organizing and making decisions for ‘hit’ products, services, and business modelsDesigning competitive advantage strategies for ‘hits’

TRADE-OFF STRATEGY (RADAR)

Redesigning a business model and strategy for a spot in the ‘Hit’ Zone

Generating strategies and tactics for a redesigned value chain

TRADE-OFF VOICE

Collecting information on total customer experience for designing ‘hit’ products, services, and business models

TRADE-OFF INTERACTION DIAGRAM

Developing scenarios for the interaction between selection factors for alternative products, services, and/or business models

TRADE-OFF PERF. DASHBOARD

Monitoring the trade-off and performance of the value chain of a product, service, or business model as well as those of competitors

TRADE-OFF PARADIGM

Defining and describing factors of trade-off or customer experience: • Delight vs. Pain• Fidelity vs. Inconvenience• Trade-off (Customer Experience) Quotient

TRADE-OFF SWOT

Collecting and comparing present and future trade-offs of competing products, services, and businesses





FIDELITY BELLY

THE 8 PILLARS OFTHE FIDELITY SWAP

CONCEPT (TRADE-OFF)

WRECKING-BALL MOMENTS

SOCIAL ACCELERANTS

SUPER-FIDELITY OR SUPER-CONVENIENCE

TECH EFFECT (INNOVATION) “HIT ZONE”

FIDELITY VS. CONVENIENCE FIDELITY MIRAGE





CUSTOMER LOYALTY

Higher Level Criteria forASSESSING IMPACTS OF A

BUSINESS STRATEGY

CORE COMPETENCE (KNOWLEDGE)

SHAREHOLDER VALUE

BRAND EQUITY

STRATEGIIC FIT IN VALUE NETWORK ECOSYSTEM GROWTH/SUSTAINABLILITY

PROFIT (REVENUE/COST) COMPETITIVE POSITION IN SECTOR





1. Christensen, C.M. (1997) The Innovator’s Dilemma. Boston: Harvard Business School (HBS) Press.

2. Kim, W.C.; Mauborgne, R. (2005) Blue Ocean Strategy. Boston: Harvard Business School (HBS) Press.

3. King, R. (2009) Fractal Box Thinking: A Simple Visual Tool for Total Problem Solving and Innovation. Fresno, California: TOAD Publishing.

4. Maney, K. (2009) Trade-Off. New York: Broadway Books.

5. Verganti, R. (2009) Design-Driven Innovation. Boston: Harvard Business School (HBS) Press.

Dr. Rod King

Thought Leader, Speaker, Consultant, and Trainer on Trade-Off Mapping & Customer Experience Management

[email protected] & http://tradeoffmap.ning.comhttp://twitter.com/RodKuhnKing

REFERENCES


http://tradeoffmap.ning.com/
