In this article, we look at the differences between marketing and public relations and answer the second question. But before we keep going, let’s start with some definitions.

Definitions of marketing and public relations

Both of these fields can be defined in various ways:

Marketing. Philip Kotler and Kevin Lane Keller in their book “Marketing” write that “one of the shortest good definitions of marketing is as follows: satisfy the needs of a target market at a profit.” Analyzing this statement, we immediately see the complexity of marketing and that it is based on a wide range of activities. This includes market research and identifying target groups, brand strategy, and promotion, as well as analyzing results and optimizing taken actions.

Public relations. Public relations is a somewhat less comprehensive phenomenon than marketing. We can define PR as a set of communication activities aimed at creating a positive brand image, managing reputation, and building relationships with various stakeholders—such as customers and investors—through media contacts and sharing press information.

These definitions constitute the goals set for marketing and PR activities. To better understand the differences between the two, let’s examine a few selected goals.

Marketing and PR goals

Marketing goals

The most important goals of marketing include:

• Creating value through products and services. One of the main tasks of marketing is to create and deliver value to customers by offering products or services that meet their needs.
• Identifying the market and audience segment. Marketing researches the market and identifies audience segments to effectively reach specific customer groups with relevant offers and messages.
• Promoting and building brand awareness. The purpose of marketing is to promote a brand and build brand awareness among customers through a variety of activities that are consistent with the brand’s strategy, such as advertising on the Internet.
• Increasing sales and creating demand. The ultimate goal of marketing is to increase sales by generating demand for the company’s products or services. Marketing activities are designed to encourage customers to buy.

PR goals

The most important goals of PR include:

• Building a positive brand image. PR focuses on building a positive brand image through effective communication with various stakeholder groups.
• Reputation management. PR activities aim to shape public opinion by managing media coverage and responding to emerging events to maintain a positive brand image.
• Communication with the media and stakeholders. PR engages in communication with the media, investors, customers, job candidates, and other stakeholder groups to build a relationship with them and engage them with a particular company.
• Crisis management. PR is responsible for responding to crises and managing crisis communications to minimize damage to the company’s reputation and build trust.

Differences between marketing and PR

Although we can see similarities between the two activities, defining and setting goals for marketing and PR highlights the differences between the two.

First, marketing focuses primarily on creating value, generating demand, and increasing sales. PR, on the other hand, focuses on building a positive image of a particular company in a given environment.

Secondly, there are also differences in the target audiences between the two. While marketing mainly targets customers and potential buyers, PR engages in communication with various stakeholders—including potential customers, employees, job candidates, and the public—through media contacts and presence.

Finally, the results of marketing and PR activities are measured differently. In marketing, for example, we measure the conversion of social media advertising campaigns, the level of brand awareness among consumers, or the number of visits to a website in response to content marketing efforts. Meanwhile, measuring success in PR is more challenging because it can include factors such as brand exposure in industry media.

What to choose – marketing or PR?

Now, the question arises: “Should I be doing both marketing and PR to achieve tangible business results?” In our opinion, yes – we’ll explain why in a moment. But first, let us mention that the first step in crafting a communication strategy should be developing a brand strategy – this, among others, determines its identity and image, considering its mission, vision, and values, and taking into account the business goals of the company.

So, having both a brand strategy and a communication strategy will help you choose the right communication actions to achieve your business goals. If you haven’t developed either strategy yet, we recommend reading this article.

Go hybrid – 4 reasons

Getting back to the “why” question – why should you do both marketing and PR at the same time? In our opinion, there are at least four good reasons.

PR strengthens marketing

Let’s take a look at Coca-Cola. The maker of this sweet beverage perfectly integrates marketing and PR activities, effectively building a brand image based on strong emotions, tradition, and shared experiences.

For example, it runs TV advertising campaigns, promotes its products as a symbol of joy, socializing, and time together, enters into partnerships with charitable organizations, sponsors cultural events, and promotes social actions. These activities strengthen Coca-Cola’s position in the market.

PR affects credibility

Speaking well of ourselves is not the same as letting others speak well of us. And the latter way greatly increases credibility in the eyes of the audience. Which way is that? PR, of course. This is useful at many points in the life of an organization, and especially in crisis communication, when we seek support from the outside, from the media.

There are many examples, but let’s take Uber. By responding to all controversies and challenges related to its activities, the company responsibly manages its public image. For example, in 2022, it released a report on sexual assaults during Uber rides. It showed that the number had gone down, which was supposed to confirm that the company’s safety measures were working.

PR builds reach

Usually, media have “reach” (access to audiences) that is unavailable to brands – especially small ones with modest marketing budgets. In such a case, engaging in PR activities can help a brand reach a wide audience.

Let’s take, for example, a startup that wants to raise venture capital funds for further development. To reach potential investors, such a startup could appear in industry media, presenting itself as a promising investment opportunity.

Would this startup achieve the same effect by only being present in its own channels? Perhaps, but it would certainly take much more time.

PR and marketing engage customers

Both marketing and PR are essential to building customer engagement and long-term relationships. Let’s take, for example, Nike, a shoe manufacturer. The company actively markets and promotes its products, inspiring people to be physically active.

At the same time, Nike engages in PR activities, such as sponsoring sports events, promoting a healthy lifestyle, and participating in social initiatives.

Combine PR and marketing in 5 steps

If those four points make sense to you, let’s now focus on integrating marketing with PR.

1. Define common goals

Marketing and PR departments should work together to set communication goals so that later their messages are consistent. Common goals may be building brand awareness, creating customer engagement, and boosting sales.

Actions to be taken:

• start by building a brand strategy (we talked about this earlier),
• set clear goals to make it easier to track progress,
• hold regular strategy meetings for the marketing and PR teams.
2. Ensure collaboration between both teams

Keeping both teams in the loop through constant communication helps track progress, spot potential issues, and adapt to changes swiftly. This makes teamwork smoother and more effective.

Actions to be taken:

• define a meeting schedule – daily, weekly, etc.
• use online collaboration tools, for example, instant messengers,
• create a common system for tracking progress. For example, use ż­ˇ˘k8Ć콢Ěü.
3. Keep your communication coherent

Consistently sticking to certain values, tone, and brand image builds trust and loyalty among customers. All communication efforts should be aligned with the company’s main goals and values.

Actions to be taken:

• create a brand book that outlines basic communication principles and brand image guidelines,
• develop a content plan that addresses different objectives, channels, and communication methods,
• make sure all employees understand the basic rules of communication and brand image to keep the message consistent throughout the organization.
4. Use various channels of communication

An effective integration of marketing and PR activities (based on a brand strategy) uses various tools and communication channels. It blends advertising, participation in press events, social media presence, and other forms of communication to reach diverse audiences.

Actions to be taken:

• develop a multi-channel communication strategy, one that considers various channels and methods to reach customers,
• test and optimize the communication methods outlined in the strategy to identify the most effective ways to reach the chosen target audience,
• ensure that the brand message is consistent across all communication channels while maintaining flexibility and adjusting communication to the specifics of each medium (for example, to the algorithms used by social media).
5. Analyze results and optimize

Finally, when it comes to analyzing your marketing and PR efforts, it’s important to remember that if you can’t measure something, you can’t improve it. Therefore, for each objective, it is worth defining a measurable, quantified KPI (Key Performance Indicator) that will tell you if the plan you are implementing is bringing you closer to your objective. This will let you improve your communication and adjust your direction.

Actions to be taken:

• establish a system for monitoring key performance indicators to determine progress toward communications goals,
• analyze data in real time and respond quickly to changes to keep your efforts competitive and effective,
• conduct regular reviews and retrospectives to assess the effectiveness of your efforts and identify areas for improvement.

Marketing and PR – summary

While marketing and PR have a lot in common, they are distinct fields. When deciding if we need both, it is important to consider the individual goals and needs of our company. It is also crucial to understand that marketing and PR can complement each other and bring different benefits to the organization.

And integrating the two is what we recommend.



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]]> /understanding-a-brand-strategy Wed, 10 Apr 2024 06:06:55 +0000 /?p=69444 How do you want your company to be perceived by the market in 20, 30, or even 50 years? If you need help with answering that question, perhaps you still need to outline a brand strategy for your organization. Let's catch up on that, starting with defining brand strategy and identifying its components.
]]> What is a brand strategy? Brand strategy can be defined in various ways, but one definition is that a brand strategy serves as a roadmap guiding how a brand aims to be perceived in the market. It shapes the brand’s identity, image, and desired positioning. This encompasses its mission, vision, and values, while also considering the business objectives, consumer needs, and unique selling points that set the company apart from competitors. So, it sounds quite similar to business strategy or communication strategy. However, these are three distinct strategies, though they are related and interconnected. Therefore, to better understand a brand strategy, let’s examine the differences between them.

Brand strategy and business and communication strategy

Let’s start with the following statement:

While the business strategy defines the overall goals and directions of the company, and the communication strategy focuses on effectively conveying information about the brand, the brand strategy goes further and concentrates on building its identity and image. So it sits between the business strategy and the communication strategy.

1. Business strategy
2. Brand strategy
3. Communication strategy

Below we present the main differences between them.

Elements of brand strategy

To complete the definition above, let’s focus on the elements of a brand strategy. So what should it include? For starters, the five points described below.

Mission, vision, values

While we’ve already written about the mission, vision, and values (you can find the article here), let us briefly remind you what they are. The brand mission defines the purpose of the company – what it does and who it does it for. The vision, on the other hand, focuses on the long-term development of the company – where we want to be in x years, and what kind of world we want to build. It is aspirational in nature. It is meant to motivate. And then we have values.

Values are the principles and beliefs by which organizations make all their business decisions. For example, Nike’s brand mission is to inspire athletes to perform better. Google’s vision is to make information easily accessible – so everyone can get to it. And Apple’s values include “creativity” and “innovation” – the latter of which is an integral part of its products.

In practice

To define the mission, vision and values for your company:

• Be specific. Make sure that the mission, vision and values are clear to others,e.g., customers and employees – so that nobody has doubts about “what’s going on” here.
• Incorporate the mission, vision, and values into everyday life. If your organization isn’t living its mission, vision, and values, then you probably have a different (unconscious) mission, vision, and values.
• Be consistent. While operational and tactical goals may change, the mission, vision, and values should remain constant. They are the heart of the company’s operations.

Positioning

Brand positioning is about determining how a company is to be perceived by customers – what should it be associated with? This allows consumers to position it somewhere in the market, compare it to competitors, and notice the differences.

Milka, for example, is associated with mildness. Volvo has been building its position as a manufacturer of safe cars for years. Starbucks, on the other hand, creates an image of its coffee shops as places where you can come and have a good cup of coffee in a pleasant atmosphere.

In practice

To determine your position in the market

1. Understand your target audience. Know your customers’ needs, preferences, and expectations.
2. Next, identify your unique features and the benefits that your competitors don’t offer and that you do. Build emotional associations.
3. Then ensure consistent, coherent communication. Let every marketing message resonate with the value or emotion you want your audience to associate with you.

Communication

At the brand strategy level, “communication” defines the way and framework of communication – and therefore answers such questions: with whom will we communicate? Through which channels? How will we communicate? What values will we communicate? How often will we communicate?

Let’s look at an example – Coca-Cola. What has this brand been doing for years? It runs advertising campaigns that not only promote its sweet beverage but also showcase it in specific settings – on the family table, on Christmas Eve, at birthday parties, etc. In any case, in social situations – mainly family and social gatherings.

In practice

To determine the communication style of your brand:

1. Choose the values and benefits you want to communicate regularly – dress them up in a slogan.
2. Then choose the right communication channels. First, ask yourself where your audience is, and then start being there.
3. Engage in two-way communication – collect feedback from the environment and respond.

Visual identity

Logo, colors, and fonts are just some of the elements of visual identity. In other words, visual identity is a set of graphic elements that are intended to represent the brand and reflect its spirit. At the same time, they are meant to evoke associations with it.

Purple? Milka. Blue? Facebook. Golden arches on a red background? McDonald’s. And so on, endlessly. For example, Apple opted for a simple, minimalist logo of a bitten apple. Interestingly, the logo of this company was not always so simple.

In practice

To choose the visual identity for your company:

• Design a consistent logo – let it be simple and easy to remember.
• Choose the right colors. Colors evoke emotions. What emotions do you want to evoke?
• Consistently use the same graphic elements. Everywhere. In all materials – from the website to flyers.

Brand management

Brand management involves planning and coordinating all activities related to building, maintaining, and developing the brand. From defining the mission, vision, and values, through choosing visual identity, to researching brand awareness.

For example, in Disney’s actions, you can see consistency in building a brand that focuses on strong IPs – Disney owns the rights to Mickey Mouse (at least the contemporary version) and the Star Wars universe. Apple dominates the consumer electronics world – it started with laptops and now also produces VR headsets. BMW continues to maintain its position as a premium brand.

In practice

To better manage your brand strategy:

• Clearly define the goals you want to achieve through brand management and the values you want to convey to customers.
• Develop a cohesive action plan that encompasses both brand identification and communication strategy to build the desired image.
• Regularly monitor the effectiveness of brand management activities – we’ll come back to that in a moment.

Best practices – how to create a brand strategy?

When discussing the elements of brand strategy, we’ve already largely addressed good practices associated with the process of creating such a strategy. Let’s now focus on three additional points.

1. Do not rely solely on intuition; conduct market research. A thorough analysis of the market, competition, and target audience enables a better understanding of the company’s environment and customer needs. Market research provides specific data and insights. So, research the market. How? It’s best to hire a research agency. However, if your budget is limited, utilize free sources available online.
2. Find the USP for your brand. USP, which stands for Unique Selling Proposition, is a feature of your offer that will make customers choose you over the competition. It’s not promotion, lower prices, or anything easily imitated or copied. Look for your USP, and it will be easier for you to build communication around your brand.
3. Think long-term.Brand strategy isn’t about the business outcomes and goals you’ll achieve in a year or two. It’s about a long-term vision that will give direction to your organization, visible over the course of 50–100 years.

On a side note

The result of working on a brand strategy should be a written document. Why?

You will understand your motivation

By documenting your brand strategy, you can clearly define your company’s goals, values, and mission – making all of your objectives more tangible. In addition, you can always return to the written document and, in a moment of doubt, make a decision based on a long-term vision of the future.

You will show the document to team members

Having a written brand strategy allows all team members to understand the company’s goals and the steps needed to achieve them. This enables all employees to work in line with the established direction and values.

You will know what to measure

A documented brand strategy serves as a benchmark for assessing the effectiveness of marketing efforts and monitoring progress toward achieving set objectives. Consequently, it enables real-time analysis of outcomes and the adaptation of the strategy to changing circumstances.



How to measure the effectiveness of a brand strategy?

Since we’re discussing measuring results, let’s delve into that further. Below, you’ll find detailed information on key performance indicators (KPIs) that it’s beneficial to regularly monitor when putting the strategy into action.

Brand awareness

In order to evaluate the effectiveness of marketing efforts in increasing brand awareness, it is worthwhile to use various types of surveys – both online and over the phone. Such surveys can be outsourced to research companies.

Customer loyalty

To monitor customer loyalty, customer relationship management (CRM) tools are useful for tracking customer activity and analyzing their purchase history. By analyzing this data, you can identify your highest-value customers and develop a strategy for building relationships with them.

Customer engagement metric

Tools for monitoring social media and analyzing online data are essential for evaluating customer engagement in interactions with the brand. By analyzing the number of comments, shares, and time spent on the website, you can determine how effectively the brand engages its customers.

Increase in sales

Increase in sales can be monitored using tools for analyzing sales data. For instance, in the case of an online store, analyzing customer behavior on the website helps identify areas where the purchasing process can be improved, potentially resulting in increased revenue.

Customer satisfaction assessment

To assess the level of customer satisfaction, it’s valuable to regularly conduct customer satisfaction surveys that will help you learn what your customers value most.

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]]> /freemium-how-to-acquire-new-customers Fri, 05 Apr 2024 06:35:11 +0000 /?p=69064 If you think that giving customers something for free is crazy, see how freemium, a model for acquiring new users, works. Many popular companies use it. We’re not saying you should, too. But maybe? Find out for yourself. ]]> What is freemium?

Simply put, freemium is about offering potential customers a free version of a product or service. But importantly, “free” doesn’t mean weak or faulty, and certainly not any version. A free version of a product or service is a basic version. It has two goals. Firstly, to attract as wide a group of users as possible, and secondly, to whet their appetite for more – for a paid version.

No wonder, then, that so many companies decide to acquire customers in the freemium model. It works well in both the digital and analog world, although we more often associate it with the former. And unnecessarily so. Free perfume samples, a small packet of laundry detergent, or trays of cheeses and meats in a hypermarket are a few examples of using the freemium model in the physical world.

Moreover, this model works in both the B2B and B2C segments. Let’s see how popular technology companies, which we use at home and at work, utilize it. You probably know all of these companies. All of them are highly successful.

Giants and freemium. Examples

• (B2B). The basic version of the software from iFirma is used for independent invoicing, offering invoice templates and a mobile application. However, if you need something more, such as accounting assistance, you can opt for one of the two higher-tier packages. In one of them, you will receive support from a dedicated accountant.

• ż­ˇ˘k8Ć콢Ěü (B2B). ż­ˇ˘k8Ć콢Ěü is a project and team management tool available in three pricing tiers, including a free option. What sets it apart from the paid packages is, among other things, the number of supported projects and team members who can collaborate on a given project. Nevertheless, the basic version of ż­ˇ˘k8Ć콢Ěü provides a comprehensive overview of what users can expect from the paid version of the software.
• Slack (B2B). Slack is a business communicator primarily used by remote teams for exchanging information. The free version of Slack allows access to its core features, namely the communicator, and it works well, just like in the paid version. However, the free Slack does not allow browsing conversation archives. If you need such capability, well, you have to pay. And companies do pay.

• Spotify (B2C). The popular music streaming platform offers both free and paid options. With the free version, you can listen to music with ads and can’t choose specific songs. But with the paid version, you get rid of ads and can pick any songs you want.
• Zoom (B2B i B2C). It offers a video conferencing platform. In the free version of the product, you can, for example, participate in meetings lasting up to forty minutes. However, in the paid version, you gain additional options, such as longer meeting times, a greater number of participants, and higher-quality recordings.
• Dropbox (B2B i B2C). Dropbox is a platform for storing and sharing files. As you might easily guess, the free version of this tool offers limited disk space, where you can store files with a total weight of 5GB. However, the paid version provides greater capacity, starting from 2TB, as well as the ability to share data, meaning sharing them with friends or members of your team, because Dropbox operates in both segments – B2B and B2C.
• Trello (B2B i B2C). Trello is a project and task management tool. Its free version allows for creating ten Kanban boards and getting acquainted with the software. However, if we want to use more advanced features useful for teams, such as progress tracking and creating more complex task lists, just like with any other tool described here, we have to pay.

Freemium – why is it a good model?

Why do startups often opt for freemium? The answer is quite clear. This model facilitates acquiring potential customers. It’s easier to convince users to sign up for free and test the software than to immediately ask them to reach for their wallets and pay for software they’re not familiar with yet.

So in one fell swoop, freemium allows you to:

• Achieve economies of scale. Freemium fosters the growth of the number of users. In the early stages of building a business, it is a confirmation of business hypotheses, and in the later stages a springboard to recurring revenue.
• Gain trust. Before purchasing, the customer can test the product or service.
• Get customers used to it. Once a customer starts using a particular product, it may be difficult for them to give it up later. So, it’s about loyalty.
• Take advantage of recommendations. Satisfied users of the free version of the product recommend it to their friends, and thus the manufacturer can benefit from inexpensive marketing.

Of course, the freemium model isn’t perfect in every aspect. It also has many drawbacks, with high infrastructure maintenance costs at the forefront. Free accounts are a cost – borne by the company. As a result, the company either has to generate revenue to sustain this business, or obtain capital from external sources, such as venture capital funds, to continue scaling operations and eventually monetize them.

Another challenge lies in convincing non-paying users to switch to the paid version of the product. For some, the free features may be so good that they’ll never opt for the paid option. On the other hand, freemium must offer enough value for free to make registration compelling. Therefore, the challenge in this customer acquisition model is striking a balance of value—how much to give away for free and what to reserve for paying customers.

Freemium – is it for me?

How can you tell if freemium is a good customer acquisition model for your business? According to Canadian entrepreneur, investor, and CEO of SaaS Academy, Dan Martell, when seeking an answer to this question, you should consider the four factors described below.

Factor #1. You are creating a product that has the potential to reach the masses

According to Martell, it doesn’t make sense to go freemium if you’re in a niche. In his opinion, this model works well in large markets where you can count potential users and customers in the millions. Why is that? We can only guess.

You can simply monetize niches right away because they’re often too small to invest capital in maintaining free accounts, and furthermore, niche users are sometimes neglected by the market, so they’re “starving” for a particular product.

In addition, freemium is meant to help achieve economies of scale. If you make a mobile app for learning several languages – for example, English, German, Spanish and Mandarin – you’ll have that chance. But you won’t get the same effect if you enter the market with an app for learning only Kashubian.

Factor #2. Freemium and free samples give you a competitive advantage

If most players in the market are charging for access to all versions of their products or services, you can go in a different direction and expand your product portfolio so that it has a chance of appealing to less affluent customers or customers with fewer needs. After all, not everyone needs a premium package.

According to Dan Martell, this is exactly what the MailChimp team did. When they entered the market, they came in with an offer that allowed users to use the email marketing platform for free until they reached two thousand email addresses. Martell mentions that at the time, this was much more than what other providers of such services offered. This practice is now essentially the industry standard—not only in the marketing industry but also in others.

Factor #3. A simple and understandable value proposition

If potential customers can immediately see the benefits of your product and can purchase it without having to go through a complex buying process, then freemium may be an effective user acquisition model for you.

On the other hand, if the purchasing process in your company is complicated — and you know it because it requires involvement from the sales team first and then the customer service department— according to the CEO of SaaS Academy, in such a situation, it’s worth considering other models of acquiring and monetizing potential customers.

Factor #4. Keeping non-paying users is cheap

The last factor on Dan Martell’s list is the cost of maintaining free accounts. According to him, you can afford the freemium model if your product is so good that non-paying users “pass it on” and recommend it to their friends.

Then their satisfaction and recommendations act as a magnet for new customers. So, this form of marketing can pay off and increase the growth rate of your business. However, if you can’t count on referrals, and it takes a good portion of your budget to handle and maintain non-paying users, again – freemium may not be for you.

Before implementing freemium…

But let’s say you have decided to build your business around this very user acquisition model. What should you do to make it work in your case? Finally, we would like to leave you with three points to consider.

1. Get to know your users and the value you provide to them

   What problems do your customers face and how do you help them? How does your offer impact their lives? These are fundamental questions that will help you find a value proposition for your business. And that proposition is the sum of the benefits resulting from what you do in response to customer problems, thus contained within your product or service.

   For instance, “real-time data synchronization” isn’t a value proposition—it’s just a product feature. The real value is what it does for users. Like when two team members work on a file together, seeing each other’s changes instantly. This helps them understand and share information better. So, focus on your value proposition.

2. Set price metrics – “what should customers pay for?”

   In the article “How to choose price metrics for your business?” we wrote, “A price metric is a unit of consumption for which the customer pays.” Depending on the business, product, or service, these metrics will vary. However, understanding them is necessary to “dress up” the aforementioned value proposition into an attractive offer for customers, which could take the form of packages, for example.

   To better understand how to use price metrics, we suggest reading the mentioned article. Here, we’ll just mention an example that, hopefully, will help you grasp what price metrics are all about.

   Imagine you’re selling software for business data analysis. What are customers paying for? Are they paying for a predetermined amount of processed data, for example, 2GB or 10GB? Are they paying for the number of users who can collectively process data within one account? Or perhaps they’re paying for the way you report data or the data refresh rate – real-time or with an hour delay?

   These are all examples of price metrics. Choose the ones that best fit your value proposition and allow you to most effectively monetize your customers.

3. Find a strategy for converting free accounts to paid accounts

   The more free users start paying for access to the product or service, the better—that’s obvious. However, what’s less obvious is the way to get them to do so. One way is through the aforementioned price metrics. Establishing the right price metrics for individual packages (including free ones) motivates users to upgrade, meaning they move to higher-tier packages.

   But that’s not all. What else can you do besides setting price metrics?

   You can take care of the UX Design and usability of your product. You can also make the process of onboarding users as convenient as nowhere else. This is where tutorials come in, for example, internal e-learning platforms with instructional videos.

   Moreover, you can (and actually should) regularly remind your non-paying users about the possibility of upgrading to a paid version. Here, marketing automation tools and a thoughtful communication and promotion strategy will do.



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]]> /cultural-differences-and-their-impact-on-business Mon, 18 Mar 2024 09:11:44 +0000 /?p=68638 From various flavors of Pepsi, through exotic sandwiches from McDonald's, to unconventional product names – let's take a look at examples of how cultural differences influence business, and also whether Europeans are far from Asians in terms of business. Read on. ]]> About cultural differences

If you plan to expand your startup, read this article. You will find plenty of useful tips on expansion – from assessing your readiness, through market analysis, to “test” expansion.

Here, we will quote one of the statements by Piotr Smoleń, CEO of Symmetrical.AI, which directly relates to the topic of today’s article and touches upon cultural differences.

“First and foremost, we need to understand the competitive landscape of the new environment. It may turn out that our company, being a leader in Poland, is just mediocre elsewhere. We need to know it in advance,” – he said

In his opinion, before entering any new market, we should understand the pricing strategies prevailing in that market – they may differ from those in Poland. It is also important to understand how customers acquire products and services – communication and distribution channels may also work differently.

Another important element to consider is the product offering and the value consumers expect. Just because you sell two products separately in Poland doesn’t mean you can sell them separately in a foreign market. It may turn out that you need to bundle them, otherwise customers won’t see the value.

Conclusion? There are cultural differences between various geographic areas. Sometimes they are smaller, and sometimes they are larger. Either way, they cannot be underestimated when doing business globally. To better understand the impact of cultural differences on products and the way they are communicated, let’s look at a few examples.

The impact of cultural differences on business

We would like to emphasize that these cultural differences manifest across various aspects – from the offer and marketing strategies to pricing considerations ( we’ve written an article on pricing).

We would like to emphasize that these cultural differences manifest across various aspects – from the offer and marketing strategies to pricing considerations.

Cultural differences and the product

Let’s start with McDonald’s and the culinary preferences of people in different regions of the world. Just because we can have a McCountry in Poland doesn’t mean it’s available in other countries. And vice versa. Regional sandwiches served by this restaurant chain in New Zealand, the Philippines, or France are not accessible in Poland. For example, in New Zealand, McDonald’s used to serve the “Kiwi Burger” with egg and beetroot; in the Philippines, the “Burger McRice” with a rice patty instead of a bun; and in France, the “McBaguette” with a baguette, symbolizing Paris.

PepsiCo, on the other hand, launched a limited-edition cucumber-flavored Pepsi in Japan in 2007. Sprite did the same ten years later. In 2017, it offered “Sprite Cucumber” in Russia. Apparently, the Japanese and Russians like the vegetable, and both brands wanted to respond to their tastes.

Cultural differences also influence the furniture and clothing industries. Take IKEA, for example, which, inspired by small apartments in Tokyo, decided to work on a furniture series designed for spaces up to 25 square meters. Similarly, during the Rio de Janeiro Olympics, Nike introduced a sports hijab as a gesture of respect towards the Middle East and women from Arab cultural backgrounds.

Cultural differences and marketing

Cultural differences greatly impact how brands market and communicate. This includes the language in ads, symbols used, and even the names of products. Brands often change names in different markets to suit local preferences.

For example, the well-known Burger King in Poland is not called Burger King in Australia but Hungry Jack’s. Why? The name was already taken by another chain. Meanwhile, KFC, which is almost universally known by that name, is referred to as PFK (Poulet frit à la Kentucky) in the province of Quebec, Canada. This is because the official language in Quebec is French. Everyone uses it, and companies wishing to offer their products and services in the region are required to do the same.

The potato chips brand Lay’s is called “Lay’s” in almost every region worldwide. The exceptions are essentially two countries – the United Kingdom and Brazil. In the UK, Lay’s is known as “Walkers,” and in Brazil, it is called “Elma Chips.”

Cultural differences and pricing

Another area heavily influenced by cultural differences is pricing. Any company that operates globally tries to tailor its prices to the needs and capabilities of a particular market. You can see this clearly when you look at Netflix, for example.

In developed countries, such as the United States, where living standards are higher, Netflix offers access to its platform at slightly higher prices, while providing viewers with a somewhat different catalog of movies and series. Meanwhile, in countries with lower incomes, such as Poland, subscription prices are also lower. For instance, in Poland, the basic account costs 29 Polish złotys, while in the USA, the same package costs 42 złotys.

Moreover, differences in pricing not only involve the level of prices but also extend to the way fees are calculated, thereby impacting the product structure. In 2022, Netflix introduced an ad-supported subscription plan in twelve countries – for this package, customers still have to pay, but the cost is simply lower.

Where are cultural differences most evident?

They will be most noticeable between the West and the East, which means that Europeans may find it easier to do business in other European countries or in the United States than in Asia. Paweł Łopatka from SoftServe confirms this, with whom I once talked about cultural differences and running a business in Asia.

Why do Europeans find it so challenging to do business in the East? We will provide a few examples.

1. Relationships and the culture of doing favors. European entrepreneurs focus on goals, while Asians prioritize relationships. Building these connections often involves doing favors for others. When you do someone a favor, you can expect them to want to return the kindness – it creates a sense of obligation.
2. Added value for business partners. Companies from outside Asia, to succeed in the region, need to offer more than just products or services. This could include getting involved in the local community’s development. Asian culture is a collectivist culture.
3. Language barrier. Europeans may have difficulty communicating with Asians if they rely solely on the English language. To establish a presence there, it is advisable to learn the local language and build a local team of specialists.
4. Patience and a lengthy purchasing process. Due to the relational approach to business, the purchasing process in Asia is longer than in Europe or the United States. Consequently, it is also more expensive, especially when building a local team and just starting to establish relationships.
5. Authority and final decision. In Asian culture, business owners are highly respected. Their employees do not question their decisions or challenge their authority. Business partners should also refrain from doing so.

Understanding these differences, respecting them, and adapting to local conditions and customs is a good start to take the first step on “foreign business ground.”



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]]> /about-market-research Thu, 14 Mar 2024 09:54:27 +0000 /?p=68611 Outstanding products don't just come from great ideas; they result from market research. Wondering how to do it? We've got some tips. Read on to find out more. ]]> About market research before introducing a product to the offer

Startups fail for various reasons. According to CB Insights, specifically due to twelve reasons. These include a lack of funding, a flawed financial model, or pricing strategy (we wrote about it here). They also fail because they bring products to the market that their potential customers simply don’t want to buy later.

Fortunately, the risk of introducing an unwanted product into the market can be minimized – we will address this issue, and market research will help us solve it. However, we will approach it a bit differently than you might expect. We will explain what we mean in a moment. Meanwhile, we would like to add one more thing.

Namely, coming up with a product and researching the market is just the beginning. After that, it’s necessary to continuously develop and update the product. This is where creativity and an innovative approach to building a business come in handy.

Another thing. How do you know that your product truly meets the market’s needs, that customers actually need it, that they really want it? Let’s take a closer look.

“This product is a gold mine”. Signals of interest

Let’s look at it from the perspective of two situations – before and after the purchase.

Situation #1. Before the purchase

• Customers ask about a product. You don’t have the product in your offer, but customers still inquire if you offer it or even suggest that you should sell “this and that.” Moreover, this often happens, for example, when you share valuable content online. People consume it and then crave more—something they are willing to pay for.
• Customers pay. Positive statements about your product don’t mean much if people aren’t opening their wallets. It may sound trivial, buta purchase is a sign of interest that you should look out for.

Situation #2. After the purchase

• Low churn rate, meaning a small percentage of people who abandon your product. For example, if you offer a web application on a subscription basis and customers don’t cancel, it means that you’re genuinely meeting their expectations. Or, if you run a store, and they visit and buy regularly, that’s also a good sign.

Rising prices doesn’t make everyone leave. A higher price may push away those who don’t see the product’s value or only see a fraction of it. Such people will most likely stop using your product after the increase.If they stick around, it means you’re offering something they truly find valuable.

The second situation refers to the so-called product-market fit and continuous product improvement. We discuss it here. Now, let’s focus on the first situation before the purchase, looking at it from a market research perspective. How do we conduct such research? And what did we mean when we said we’d approach it a bit differently?

Market research vs. the product

Usually, when introducing a product to the market, either it is launched without prior market research, which is a significant risk of failure and, of course, a mistake, or the market is analyzed, and then the product is launched on a full scale – such an approach is definitely better, nevertheless, it still carries significant risk.

However, it is possible to do things differently. You can slowly enter the market by either having a prototype or just announcing the product without one. This method is known as a fake door test in the startup environment . We’ll discuss it in a moment because even if you decide to carry it out, you should first use traditional research methods, such as quantitative and qualitative analysis.

• Step 1. What do you need to know about the market? Hypotheses

To research the market, you need a business hypothesis. And startups usually have no problem with that because they have product ideas. That is, they more or less know what they want to do and who they want to sell it to. At this stage, however, it is not worth getting too attached to this vision – after all, it may not work out. So it’s better to treat it as a hypothesis, a set of assumptions that we will modify as we get in touch with the market.

To formulate a hypothesis, we need to find answers to the following questions:

• What product do we want to introduce to the market?
• Who is our target audience for this product? Who is our customer?
• What significant and pressing problem does our customer have?
• How does our product solve the customer’s problem?
• Do we have competitors in the market? What are they like? What is their strength?
• How much of a market do we want to capture?
• Is the market we want to enter growing, shrinking, or has it remained unchanged for years?

In the first phase of market research, the following will be helpful:

• all industry reports examining the size and condition of a given market,
• websites and social media of competitors, including customer comments,
• industry media, where we can find statements, opinions, and interviews with industry experts,
• industry trade fairs, where we will meet representatives of the market in question,
• and, of course, internet search engines and tools for measuring the popularity of keywords.
• Step 2. Conversations with customers and the ASK campaign

After collecting numerical data about the market, it’s necessary to go into the field.

Not necessarily literally, although that is always a good option. In any case, you need to talk to potential customers. Either directly or indirectly. And preferably both. By direct contact, we mean one-on-one conversations, and by indirect, we mean any kind of standardized research, such as surveys.

In their book “Understanding Marketing,” Artur Jabłoński and Marek Piasek described something they called the “ASK campaign,” which is a campaign of asking questions. Its assumptions are simple.

• Customers don’t always know what they want.
• Therefore, ask them smart questions.

How, in the context of “customers don’t always know what they want,” do smart questions sound?

Let’s say you’re creating software. You’re considering selling it as a subscription service (SaaS) or as a one-time purchase under a license. So you can ask your potential customers: “Would you prefer to use my software on a subscription basis for a lower monthly fee, or purchase it once for this much or that much?

But you can also ask differently, as Artur and Marek suggest. In a less direct way, for example: “How do you prefer to access software?” Let’s say the response is, ‘When I need it.’ Now, your task is to figure out how to meet that need. Perhaps, you’ll decide to charge your customers on a “pay-as-you-go” basis instead of a subscription model.

Anyway, the authors of “Understanding marketing” recommend asking customers about their problems and needs rather than directly about offers. Customers may know their challenges but not necessarily how to solve them – that’s where the entrepreneur comes in. Gathering this information helps create better products.

• Step 3. Do a fake door test

We mentioned earlier that it is not worth relying on customer declarations like “This is a great product, I’ll buy it when it’s available”. Declaring and buying are two different things. That’s why instead of asking for feedback, it’s better to try to sell – even if the product isn’t ready yet. That’s the beauty of the fake door test method – trying to sell something you haven’t produced yet. How do you organize such a test?

In simple terms, we need two things:

• Landing pages– that is, the page where we present our offer. Such a page must look real (it must actually be real), so it should include product mockups, descriptions, and, very importantly, the “buy now” button (or a similar one).
• Website traffic – meaning potential customers who will visit the website, review the offer, and click the mentioned button to purchase the product. After clicking it, of course, they won’t buy anything because the product doesn’t exist yet, which they will learn just now. They will also find out that the product will be available at a certain time, and they can join a waiting list by providing their email address.

That’s the basic idea of the fake door test. After conducting such an experiment, we will be able to count how many people visited our website and how many of them clicked the button. This will allow us to estimate the real interest in our product. Moreover, we build an email list during the test for future marketing campaigns when our product is ready.

Market research before introducing a product – summary

Market research is valuable at various stages of product development. Not only when estimating market potential but also during product creation. That’s why in the startup environment, it begins with imperfect prototypes and Minimum Viable Products (MVPs). Along the way, customer feedback is gathered, and the product is modified based on their input until it finally takes on the desired form.



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]]> /how-to-deal-with-low-prices-from-competitors Fri, 16 Feb 2024 07:43:39 +0000 /?p=67765 First of all, do low prices from competitors actually pose a problem? And if so, how to deal with them? In this article, we’ll discuss four strategies that can help you address this issue. Read on to find out more. ]]> 4 strategies for dealing with low prices

Competitors’ low prices aren’t a problem per se. After all, price is just one element of a product or service. One element. There are other elements. They make up what is called a value proposition. And that value proposition, in simple terms, answers the question of how our offer affects the customer’s life – what it brings to them. Only when we know the answer can we price our offering attractively.

And an attractive price doesn’t necessarily mean it’s low. The price is attractive when, firstly, it reflects the content of the product or service, and secondly, it is tailored to the preferences and profile of a specific customer segment. Otherwise, it will always be too high.

The issue arises when our competitors offer the same product at a lower price. However, the low price of our rivals may only hide a more significant problem, namely, the problem related to our product. Let’s delve into that.

Strategy #1. Work on your value proposition

To understand what our product or service adds to the customer’s life, think about the Unique Selling Proposition (USP), and what sets you apart—something in marketing known as the point of difference.

1. Value proposition

Simply put, a value proposition is a set of benefits that the customer receives with a product or service. To define it, you need to take a holistic look at your business. Here, a helpful tool is the Business Model Canvas. It’s a template consisting of nine fields, each representing crucial areas in the company.

This refers to:

1. Customer segments: To whom are you targeting your offer?
2. Value propositions: What value are you generating for customers?
3. Channels: What channels are you using to deliver the product or service to the market?
4. Customer relationships: How do you plan to acquire and retain your customers?
5. Revenue streams: How will you generate revenue for your business?
6. Key resources: What resources do you need to deliver value to the market?
7. Key activities: What activities do you need to undertake for customers to receive the highest value?
8. Key partners: Who do you need to run the business?
9. Cost structure: What are the major costs incurred by your company?

By answering the above questions and filling out the business model canvas, you are essentially planning your business and determining its structure. You will also see how a change in one area affects the entire business and therefore the value proposition. This tool can also help you analyze the competition and understand what your market rivals are actually doing that makes customers choose them. And you should conduct such an analysis because of the point of difference.

2. Point of difference

These are basically the standout features—those things that set our offer and value proposition apart from what our competitors bring to the table. But remember, understanding the Point of Difference (POD) goes hand in hand with recognizing Points of Parity (POP)—the common ground we share with others in the market.

The purpose of Points of Parity is to meet customer expectations regarding their perceptions of a particular product segment. Let’s say every online store in Poland offers two types of payment – electronic payments in advance and cash on delivery. That’s a certain standard. So, if you run an online store, you need to offer these two payment methods to align with the standard and not fall behind.

On the other hand, Points of Difference, or differentiating points, are meant to set you apart from the competition. If only a few online stores in Poland offer deferred payments, and you implement such a feature, you can consider it as your Point of Difference (POD).

3. USP, or Unique Selling Proposition

The USP (Unique Selling Proposition) defines what sets us apart from the competition and what makes us better. In a way, we see the USP as a collection of various differentiating points. Their combination gives our product or service the potential to stick in the minds of prospective consumers and persuade them to make a purchase. At the same time, the USP should be a unique feature that is difficult for competitors to imitate.

That’s why we can say that the USP is not a temporary promotion, for example, “15% discount until the end…” or a specific commercial offer like “Free delivery on purchases over X USD.” All these elements are easy to observe and then copy.

An unconventional USP could be marketing communication and brand narrative through the founder’s story – typically, such stories are unique. The same goes for a personal brand. If the company founder showcases their personality online, becoming the face of the brand, customers may find it easier to identify with the product and trust the organization’s competencies. The founder’s face is impossible to replicate.

Strategy #2. Differentiate customer segments

When we talk about the expansion of a company, geographic expansion often comes to mind – today, we operate in Poland, and tomorrow also in Germany and the United Kingdom. However, this is just one direction of expansion that we can pursue.

We can just as well expand our operations through vertical integration, providing customers with additional services, or enter a new market segment – this too can be an effective strategy for competing with the low prices of our rivals.

By a new market segment, we mean expanding your business into a new, previously untargeted customer segment. This means that if you have been offering your product exclusively to micro-enterprises so far, you may now want to offer it to small and medium-sized businesses. You can also transition from the B2B segment to the B2C segment. Additionally, you can create additional service packages available at different prices.

Let’s say you are creating an internet monitoring tool in a SaaS model. You and your competitor offer two packages with similar feature sets but different prices, with the competitor having the advantage. Instead of lowering the price, you can enter the market with a third package and further differentiate yourself from the competitor. This way, you will address the needs of different users with different budgets.

In each case, it’s essential to remember that different customer segments have different needs, and consequently, different values resonate with them. Therefore, it is worthwhile to revisit the previously mentioned business model canvas and consider what will constitute a value proposition for this specific customer segment.

Strategy #3. Price yourself based on value

Another strategy for competing with low prices is based on pricing strategy. Prices can be determined based on competitor prices, the costs of producing the product, or based on the value the customer receives. The third approach is called value-based pricing – it is worth considering this method.

It is based on determining the value that the product or service adds to the customer’s life. To determine the price accurately, at least two steps need to be taken.

• Firstly, it’s crucial to grasp what holds value for the customer. Engaging in conversations with customers is a great way to achieve this. By asking the right questions, you can uncover why they opted for our offering and what aspects they value the most.
• Secondly, it’s important to figure out how much customers are willing to pay for what we offer. The best way to do this is by putting the product on the market and running A/B tests with different price points, both higher and lower.

Strategy #4. Continuously monitor prices

Prices don’t stay the same throughout a product’s entire life cycle. They fluctuate. It’s wise to embrace this and not wait for external cues to update your pricing. Turning this into a regular process, like checking your prices every quarter, is a good approach.

That way, we can either increase prices or tweak the product or service to better fit the current market conditions. Now, when it comes to raising prices, it’s crucial to know how to do it smoothly and confidently. Here’s a tip we came across on YouTube from Dan Martell, the founder of SaaS Academy – it’s called the 10-5-20 rule.

What is the 10-5-20 rule? Let’s see:

10x: When customers purchase a product or service, they should feel like they’re getting 10 times more value than what’s listed as the price.

5%: You can gradually increase the price for new customers by this percentage until…

20%: …20% of them start to think twice or decide not to make the purchase. If you present a higher price to ten customers, and eight go for it while two pass, you’ve identified a new, higher price that works.

Low prices – summary

Keep in mind that low prices from competitors alone may not necessarily be a threat to us. It’s a different story when it comes to higher-quality products and services. So, rather than thinking about lowering prices, it’s more effective to explore ways to offer customers more value.



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]]> /how-to-generate-innovation Wed, 14 Feb 2024 09:22:51 +0000 /?p=67742 Creativity is not just an individual trait. It is also a process that can be managed and developed within the company structure. Creativity is a breeding ground for innovation - but what is it and how to seek it? You’ll find out in today’s post. We'll start a bit dramatically though, pointing at what happens when there is too little creativity.
]]> Lack of innovation is dangerous

Why are startups failing? This question was asked by representatives of the analytical firm CB Insights in 2021. Searching for an answer, they studied the reasons for the collapses of 111 startups and concluded that there is usually no single cause. Startups fail for a variety of reasons. According to the findings, we can name twelve.

Among the major causes of failure were such obvious ones as the lack of capital for the development or marketing of products and services that no one needs. These two items topped the list. But there were also less obvious reasons, such as a flawed business model, pricing policies problems with pivoting, or to put it in more Polish than startup terms, problems with changing direction. These are all areas where there is plenty of room for innovation.

Without an innovative approach, you may eventually disappear from the market, whether it’s local or global. Thousands of companies in every corner of the globe have found this out. Even those who in their glory years led the market. Let’s look at what happened to Kodak company, or Blackberry.

The former controlled three-quarters of the photographic market in 1996, generating revenues of $16 million. But Kodak slept through the digital revolution and fell far behind its competitors. Blackberry, for its part, was at one time a more popular phone than the iPhone. But it underestimated the touchscreen era. The rest is history.

Why to bring this up?

• First of all – stay put. Observe the market. Innovation starts with observation.
• Second – innovation has more than one name or dimension. And about that below.

Innovation – what it is and in what dimensions it occurs

For every organization, innovation will mean something different. And their level of sophistication varies depending on the maturity level of the organization in question. At Huge Thing, we often use the “3 Horizons of Innovation” model to explain this. – says Monika Synoradzka, CEO of Huge Thing and partner at SpeedUp Group.

What’s the point? My caller explains:

• The First Horizon of Innovation is the one that addresses the needs of the here and now, priming the company in its current position (maintaining the status quo).
• The Second Horizon of Innovation responds to challenges that the organization is aware of, but which the organization still needs to experience. This type of innovation helps chase the competition, but it does not build an advantage in the long term.
• The Third Horizon of Innovation concerns the most groundbreaking one, reaching far beyond the organization’s status quo today. They are the ones that build competitive advantage, but reach for them and allow for numerous experiments (and inherent failures), companies need to build awareness within the organization of the value that innovation brings, i.e., create a culture of innovation within themselves.

Innovation vs. types of startups

Taking into account the aforementioned “3 Horizons of Innovation” model and how innovations affect the market, we can roughly divide startups into three categories:

• Disruptive – these are startups that are innovative enough to revolutionize the way their market operates completely. A good example is the Airbnb platform, for example, which has changed the way we look for short-term, vacation accommodation today.
• Incremental – these types of startups make small innovations to existing products and services. For example, Uber Eats has made it more convenient to order food from your phone and mobile app.
• Me too – the last category of startups does not create innovations, but transfers them from one market to another. Their founders notice something interesting in the United States, for example, and then implement the solution in their market.

Multidimensional innovation

Importantly, innovation in companies is often looked at solely through the lens of product. However, this is too narrow a view, as innovation can encompass the product as well as the processes, pricing strategies, distribution channels and much more.

By the way, let’s look at examples. Let’s take Netflix first.

Netflix

When Netflix entered the market in 1997, at the time it was a movie DVD rental service. But by then it had already innovated its business model, or more specifically, the way it delivered discs to customers. Instead of traditional, stationary outlets, the Netflix team relied on a remote distribution network based on the mail. As a result, customers didn’t have to go anywhere to rent movies – they were delivered to their addresses, straight to their mailboxes.

Over time, Netflix also innovated in pricing, the way it charges for access to its offerings. That’s when the company first entered the subscription model. It’s still using it, but nowadays on a massive scale. And it achieves scale thanks to another innovation – namely, it owes it to its decision to go online.

Uber

Before Uber came on the market, to order a cab, you either had to call the number of the ride-hailing operator or go to a cab stand. Uber has changed that. Today, all you have to do is install the app, indicate the address you want to go to and order a driver. From this point of view, Uber has changed the entire industry – today many other companies offer rides from within the app.

What about Uber itself? What innovations shaped this company? The key innovation was the choice of a business model based on marketplace and ride-sharing. This allowed Uber to hire not only licensed cab drivers but also “civilians.” Another innovation was the expansion of Uber’s services to include a variety of transportation options, such as electric bikes and scooters.

SunRoof

Photovoltaic panels on roofs don’t look particularly aesthetically pleasing. Lech Kaniuk, the co-founder of the Polish-Swedish technology startup SunRoof, which installs entire solar roofs instead of panels, has realized this. So in his case, the innovation is purely product-based. But that’s not all.

When I asked Lech about the most creative, innovative business decisions that strongly influenced or even changed his company, he listed three such events:

1. The decision not to limit SunRoof’s role to “just” a company, providing an innovative solar roof, but to follow the vision of creating a virtual power plant that manages the energy of our customers.
2. The decision to digitize the entire process – from design to customer service. We are getting closer to making it with SunRoof. This new tool integrates all documents and systems implemented in the company in one place, supporting the management of the construction process and improving investor service.
3. Creating a dedicated financial product to expand our offerings. We want to be able to offer our roof for ÂŁ1 as early as next year. What’s more, thanks to the energy generated, this roof will pay for itself.

The Village

In the case of this Polish startup, the most interesting innovation has a social dimension – we’ll get to that in a moment. The Village is a marketplace that connects parents looking for professional care for their children and people who can provide it.

And here comes an innovation in the social dimension that is particularly intriguing. The startup is changing the way women are professionally activated after maternity leave. It simply gives them a job. The second interesting thing about The Village. Working on innovation in a company is only possible if the founder works on himself. This is what Aleksandra Kozera, the project’s originator, pointed out:

“Parting ways with my partner, staying true to my values, and prioritizing my product and customer experience have been crucial to the success of my business. Therapy helped me discover my motivations and set me on the right path. It’s not only about the digital aspect but also about providing quality education that attracts customers and encourages them to return.”



How do you generate innovation? How to begin?

If we were to chart innovation into a process, specific steps that almost any startup can go through, what stages would that process consist of?

“It seems that here it’s best to apply the approach of the classical model of product and service design. We distinguish the following stages,” says Monika Synoradzka.

• Defining the challenge – involves identifying the challenge or problem we want to address;
• Data collection – we complete information on the challenge. Importantly, the completion of information and its selection accompanies us throughout the process;
• Generating ideas and selecting them – that is, working on a product, solution or service;
• Work on the so-called MVP – that is, the simplest form of a solution, service, product that we can test with users;
• Testing with users – and then modifying the MVP, re-testing and deploying.

In the process, beware of mistakes. Which ones? – The first is to wait as long as possible to confront the idea and concept with users and customers. Counterintuitively, despite the popularity of the Lean Canvas method, which focuses strongly on defining the problem, there are teams all the time that don’t listen to customers’ needs, according to the CEO of Huge Thing and a partner at SpeedUp Group.

At the same time, he adds, another replicated mistake is not properly defining the customer’s needs, not understanding the customer’s environment and on what basis decisions are made. This is very evident among startups that target their solutions to the B2B sector, especially large organizations.

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]]> /how-to-move-your-business-from-offline-to-online Tue, 13 Feb 2024 08:05:22 +0000 /?p=67722 If you're not yet operating online, it might be high time to take the first step into the digital world, even if you run a traditional business. Let's examine examples of companies that have gone through this transition. What can we learn from them? Read on to find out more. ]]> Is online right for me?

Firstly, it’s worth realizing that not every business is predisposed to go online, at least not in the primary sense. Restaurants, medical facilities, cultural events – these are just examples. They thrive best offline, in the real world, in direct contact with the customer. It is largely this personal contact that determines their value – we will come back to that.

In any case, online activity doesn’t have to be the core of traditional companies. It can successfully be their additional channel through which they generate revenue. This is, in fact, a safe approach. Let’s take a look at a few examples of companies that transitioned from offline to online and see what insights we can draw for our own businesses from their stories.

Three success stories from offline to online. They made it

The following examples share a common denominator-the COVID-19 pandemic. While for companies that have always operated online, lockdowns were not a subversive moment in their lives, for companies that had little to do with the Internet, lockdowns either buried them or forced a shift to more digital operations.

Jean Louis David

Among the main “beneficiaries” of this change were restaurants and beauty salons. Restaurants saved themselves with deliveries and apps like Pyszne.pl or Uber Eats. In this way, they were able to survive the hard times when their premises were closed. It was worse for hairdressers, for example. Of course, it is impossible to provide this service remotely.

It was precisely in this situation, during the COVID-19 pandemic and lockdowns, that the network of hair salons, Jean Louis David, found itself. The crisis caused fewer people to visit the outlets bearing the JLD signature than before. This, in turn, resulted in a decline in revenues, which, depending on the month, were lower by even 20-30%. During that time, Jean Louis David was forced to close 3 out of its 75 locations.

The management had to react somehow to save the company. As a result, they decided to launch an online store with a range of hair care products. How long did it take? Just five days – that’s how much time the software house Fast White Cat needed to set up the online store, which could then minimize the losses caused by lockdowns.

Virtual Poland

For Virtual Poland, the changes caused by the COVID-19 pandemic were not as severe as for Jean Louis David, but they did make a difference. At the beginning of 2020, the media group opened a new office in Warsaw with a modern TV studio. So we are talking about a significant investment. But soon after, we were locked out of our homes.

This change caused Virtual Poland’s employees to start working remotely. At the same time, the management of Virtual Poland realized that sooner or later people would return to the offices. Not necessarily on a full-time basis. Therefore, they began thinking about implementing hybrid work. In a conversation with EY, representatives of Virtual Poland revealed that the startup Zonifero supported them in preparing for this change.

Namely, this startup helped manage desk occupancy. It provided employees with an application that allowed them to request to come into the office, check the availability of workspaces, and reserve a desk. This helped WP’s management reduce office space in favor of interview and meeting rooms.

The Talkers

The Talkers, one of the English language schools from Tricity also found itself in a difficult situation. Before the pandemic, the school served 650 students, 70% of whom attended classes on-site. Then COVID-19 came along and forced a complete transition to online. In an interview with Rebiznes.pl, Wiktor Jodłowski, CEO of the Talkers, recalls that the company lost about one-sixth of its customers during the lockdown.

Soon after, the situation normalized. The Talkers returned to the offices, but students started to prefer online classes. This got Viktor Yodlovsky’s team thinking. What about going completely online? After calculating all the costs, the school’s management concluded that this would be the right move.

Despite that, they didn’t close their physical locations right away; they did so only after a year. Why? Partly to see if the shift in consumer behavior was indeed lasting – it didn’t necessarily have to be, as people talked about returning to offices. Secondly, the Talkers’ CEO wanted to give customers time to reflect. They could decide whether they wanted to continue learning at the school, but remotely or perhaps prefer to find another place. The majority of them stayed. And the Talkers grew to 1500 students. Today, they offer online language lessons exclusively through the Internet.

Offline to online, it is revolution or evolution?

Wiktor Jodłowski told us that he once sought revolutionary solutions in business. Today, however, he opts for evolution, meaning a slow change, carried out step by step. Therefore, before making a complete transition from offline to online or simply adding this channel to your business, it’s worth looking at your business as a whole.

This is where a tool like the Business Model Canvas comes in handy. It is a template consisting of nine fields representing the most important areas in a company. By filling them out, you can conduct a business analysis of an existing enterprise or formulate hypotheses regarding a new business or, as in this case, a change.

The areas in question are:

1. Customer segments
2. Value propositions
3. Channels
4. Customer relationships
5. Revenue streams
6. Key resources
7. Key activities
8. Key partnerships
9. Cost structure

We mentioned earlier that for businesses embedded in the offline world, the value is in the direct contact with the customer. A customer can walk into a restaurant, choose a table, and order a meal. Knowing this, and with the Business Model Canvas in mind, we can ask ourselves how our business will change in each of the nine areas once we enter the online world. This will make it easier for us to plan the change.

For example, the change regarding “meal deliveries” can be implemented in two ways: through marketplaces like Pyszne.pl and Uber Eats or independently.

In the first case, you need to integrate with a service provider, and in the second, create a system, such as a website, hire drivers, and acquire vehicles. In the first case, you have to share revenue with the service provider, and in the second, take everything but also bear higher investment costs. Which is better? Everyone must decide for themselves, taking into account the current situation and other areas in the company.

Four conclusions

And what can we learn about the transition from offline to online from the stories of the three mentioned firms? Below, we’ve gathered a few conclusions that might be helpful.

1. Look for business partners

Don’t go through digital transformation alone. Virtual Poland and Jean Louis David didn’t go alone; they sought business partners who helped them change their previous way of operating. As you can see, startups can also be good partners.

2. Use simple technology

Jean Louis David demonstrated that in a crisis, such as a pandemic, quick action is essential. The company’s online store was up and running in just five days. It’s not a complicated store, but its basic, minimal version was designed to minimize losses during the crisis.”

3. Communicate with customers individually

Every customer wants to feel special and to be treated individually. When informing 41 customers that they were moving from an offline to an online model, the Talkers acknowledged that they might lose all of their customers. To counteract this, they talked to them individually and offered a better price than before. As a result, out of 41 customers, only one did not want to join online lessons.

4. Go hybrid

You don’t have to go 100% online. At least not in every dimension. You may want to meet with your employees. You can consider adopting a hybrid work model, as Virtual Poland does. Even in such a large organization you can manage available workspaces efficiently.



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]]> /how-to-create-a-product-roadmap Mon, 05 Feb 2024 09:36:42 +0000 /?p=67512 Creating new products is a process. It takes vision, time, and preparation. And to avoid getting lost along the way, it’s worth preparing a document called a product roadmap. What is it and how to create it? Let’s dig right in! ]]> What is a product roadmap?

The product roadmap is a document that contains information about the vision of the emerging product, the plan for working on it, performance metrics, and anything else that allows the team to determine where they actually are and whether they are making progress. It is most often presented in the form of a chart.

But presenting the product roadmap in this way is not a rule carved in stone. You can present it any way you like. The most important thing is that it is understandable and clear to the audience. Speaking of which, one thing is worth mentioning. You can have more than one roadmap. That is, the content should always be the same. However, the form in which the information is presented can vary depending on who the recipient is.

Product roadmap and its recipients

That’s because different team members play different roles in the product life cycle, and to better understand their roles, managers should speak their language. How does this apply in practice? Let’s take an example and put it on the roadmap. Let’s call it “verify a business hypothesis” and make it our goal for Q1.

Perhaps the project manager is clear about the goal, but what about the rest of the team? Not necessarily. For each department, that goal may mean something different because each department has different tasks to perform within that goal. For example, developers need to build an MVP (a product with minimal usability), and the marketing team needs to collect email addresses.

And this leads us to the next question.

What should a product roadmap include?

Except for you, no one can really say because every product is different. Each one has different specifications, and each one requires a different strategy. So every time, you have to tailor your roadmap to the goals and resources you have. What we can do, however, is identify areas that are worth considering. However, it is important to look at them as potential opportunities, not as a set of ready-made elements.

Things to include in a product roadmap:

• Product vision – what and whose problem our product solves, and how does it do it?
• Business objectives – what business goals will we achieve by launching the product?
• Deadlines and milestones – what stages do we have to go through and when to bring a product to market?
• Features – what features must our product have to appeal to our audience? Which of them are essential?
• Teams – who is involved in the implementation of the product? Who is responsible for what?
• Feedback and iterations – what information we have obtained from our audience will we take into account in future product iterations?
• Resources – what resources, including technology, do we need to bring to market a valuable product that meets our audience’s expectations and achieves our business goals?
• Success factors – what indicators will help us determine product progress?

How to create a product roadmap? First, a certain assumption.

In contact with the market and potential customers, the product will change. So the product roadmap can’t “stand still.” Also, it must change and keep up with feedback. It is a “living” document. Remember about it.

And how to create it? The following four steps can help you do that.

Step 1. Product vision and audience’s needs

The first step in creating the product roadmap is to identify business goals and hypotheses, as well as the audience’s needs for a given project. What do we mean by that?

• Business objectives. The product roadmap has to answer two questions. What are we doing – “What product are we going to build?” and why are we doing what we are doing – “Why do we want to build this product? And management is responsible for defining that. Except that the vision and the goals must be known to product developers. So the most important thing in the first step is the dialog between one party and the other.
• Business hypotheses. It is safer to hypothesize than to assume that our product vision will definitely address the needs and problems of our audience. This approach removes the burden of responsibility for potential market failures from the team, encourages experimentation, and opens it up to changes in the roadmap.
• Recipients’ needs. Understanding your audience’s needs determines the shape of your future product. That’s why market analysis, user research, and gathering feedback are essential in the early stages of product development. And remember that the roadmap is just one part of a larger whole. We don’t create the roadmap for the sake of the roadmap.

Step 2.Product concept and selecting features

After defining the business goals and understanding your audience’s needs, the next important step is to think about the product concept. This is the stage where we define what the product will look like and what functions it will have. It is important to focus on the value that the product will bring to the recipient.

For example, if we determine that our customers’ most critical need is “the ability to store files,” then we can ask ourselves what solution will best address that specific need and whether we have the resources to bring such a solution to market.

The answer to this question will be, in fact, a business hypothesis. Until we confront it with the market, we can’t be 100% sure that the product idea will actually meet the needs of potential customers. It’s worth testing.

And a minimum viable product (MVP), which is the simplest version of the product that contains a minimum set of features, can be useful for conducting the test.

With an idea for an MVP or even a finished product, we will learn the list of functions we will need to implement, and so put them on the roadmap. But before we do that, let’s think about resources.

Step 3. Identifying resources

The third step in building the product roadmap is to identify resources. What do we really need to make the product work? Capital, people, time, tools? What is it? It’s important to know this up front because the choice of resources determines how the goal will be achieved, and therefore affects the plan and the product roadmap itself.

For example, if you decide to build an MVP in the form of a simple mobile app, two developers may not be able to do it in two months. What then? You can hire more people, outsource the work, or change the deadline. Changing resources affects the path to your goal.

Knowing what kind of product we want to build and how we intend to do it, we can move forward and divide the work into stages. Depending on business experience and market knowledge, defining the stages can be more or less detailed. Sometimes, however, it is difficult to predict what will happen in three or four months.

Therefore, it is safer to assume that we know what we are going to do in the first iteration and then adjust the plan based on the feedback we get from the market. In any case, an indispensable part of dividing the work into phases is assigning deadlines for their completion. In general, we can assume that the more specific the deadline, the better, because we have more control over what happens to the product – “Where are we?”

At the same time, Jeff Lash, global product manager at Forrester, recommends timing your deadlines to your capabilities. Seems obvious. But it takes experience. It’s easy to be tempted to overestimate and break a big goal into four quarters, thinking, “This is what you have to do because this is what you do.”

Jeff Lash takes a slightly different approach. The more predictable the work on a product, the more we should break it down into monthly milestones and assign specific KPIs. But if we don’t have that certainty, and the project is less predictable, then let’s put the milestones and KPIs on a less granular schedule. For example, quarterly (Q1, Q2, etc.) or even “now, soon, later”.

Finally, remember that a roadmap is not a product. It will change as you work. So it pays to keep an open mind and be willing to update this document.



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]]> /moving-forward-with-your-startups-expansion-strategy Tue, 06 Feb 2024 09:10:56 +0000 /?p=67568 Entering new markets can be a good strategic move that benefits a company. It is also a risky endeavor. How then to carry out expansion? I asked Piotr Smoleń, the CEO of Symmetrical.AI and Dawid Lesniakiewicz, co-founder of the Programming Giants, for advice.
]]> Based on their experiences and opinions, this text was created with a presentation of three necessary steps to take if you are thinking of moving forward with expansion. To begin with, you need to assess your readiness, then choose an expansion vector (geographic expansion is only one option) and finally perform a series of tests. Let’s begin then!

Step 1 Assess your readiness for expansion

What factors should be considered when assessing a startup’s readiness to enter new markets? Every business is different. Therefore, each case requires a customized approach on a case-by-case basis. On the other hand, we can identify three areas that a startup founder should always pay attention to. Namely, product-market fit, expansion vector and market fit, says Piotr Smolen, CEO of Polish-British Symmetrical. AI.

Let’s now focus on each of these criteria.

Criterion #1: Product-Market Fit

Before entering a new market, a startup should achieve the so-called product-market fit.

I have written about it before, in this text, but I will remind you what it consists of. Product-market fit is about matching the product to the needs of customers, and this happens when a company’s offering solves the problems of its audience.

The key question, then, is how you will know when you have achieved product-market fit.

You will do it, for example, by performing the 40% Sean Ellis test, by which you will determine the degree of customer disappointment at the thought of discontinuing your offer. How to perform such a test? I also wrote about it in the text on product-market fit.

Piotr Smolen also advises looking at the following business parameters:

• Number of customers – the more customers there are, the more likely it is that the product is tailored to the market. The same is true for revenue.
• Low churn rate – if customers are abandoning your product or service, it’s a bad sign. Most likely, your solution does not meet their needs. In the other direction – a low churn rate indicates product-market fit.

Criterion #2: Expansion vector

However, if you are confident that your product or service is indeed a match for your customers’ expectations, you should consider which vector you intend to expand. Geographic expansion is just one possibility.

In addition to it, there are two others:

• New market segment – involves expanding your business to a new, previously unserved customer segment. For example, until now you have offered your product to small businesses, and now you want to offer it to corporations as well.
• Vertical integration – involves providing customers with additional services. For example, if you offer a system for accounting, you may now want to offer them an HR and payroll system at the same time.

Criterion #3 – Market

After deciding on an expansion vector, you should think about the market you want to enter. You may find the following questions helpful in your choice:

• Will the expansion benefit existing and new customers?
• Am I able to match the offer to the new distribution channel?
• Will I market my product in the same way in the new segment?

Step 2 Evaluate market attractiveness and profitability of expansion

A startup’s readiness for expansion is one thing, and its profitability is another.

So you have to ask yourself whether it is worth it. Is it worth entering a new market? And a quantitative and qualitative analysis will help you answer. Start with a qualitative analysis to express your chosen market in numbers.

First, you need to determine whether there are enough potential customers in the market. What scale are we talking about? A thousand or a hundred? By determining the quantity, we can determine whether the chosen market is large enough to be relevant to our business, or whether it is too small to be worth exploring, says Piotr Smolen.

At the same time, the CEO of Symmetrical.AI believes that quantitative analysis, although important, should not be the main point of market research. In his opinion, qualitative analysis is much more essential to learn about the specifics of an area.

First, we need to understand the competitive landscape of the new environment. It may turn out that our company, which is a leader in Poland, is at best an average outside Poland. It is necessary to know this in advance, adds Piotr Smoleń.

Likewise, it is also useful to understand the pricing strategies in international markets, which may differ from those in Poland. Another key aspect is to understand how customers in a given market purchase products and services, as distribution channels may work differently.

Product bundling is also an important part of qualitative analysis. Just because you sell two products separately in Poland doesn’t mean you will also sell them separately in a foreign market. You may have to bundle them together.

Step 3 Make hypotheses and perform tests

The information gathered in the previous steps will serve you to prepare a strategy and carry out the expansion. Nonetheless, it is not worth it to immediately go full steam ahead into a new market, increase employment or open a local office outside Poland. Instead, it is much better to perform a series of tests and explore business hypotheses.

When I asked Piotr which hypotheses he was referring to, he listed these four.

• Value proposition. The first thing you need to verify is the value proposition – does it resonate with the new market? Will customers even be willing to pay for what you have to offer them?
• Pricing. The second important element is pricing, i.e. the price list and how it is charged. How do the prices offered by your startup fit into the dynamics of a given market? Do they need to change? Do you somehow need to adjust your pricing strategy to fit the specifics of a particular market?
• Product Packages. Third, you must verify how customers respond to the service or product packages you offer. Does the combination of services and products meet the needs of your potential customers?
• Distribution channels. The fourth hypothesis you should make concerns distribution channels. Does the way you deliver your product or service make it easier for customers to purchase your solution, or does the opposite prevent it?

I’ve noticed that many startups have relented in their attempt to expand because they needed to enlist the help of an outside, local expert at the business hypothesis stage. My advice is to look for one. He or she will be a source of knowledge about the market, says Piotr Smolen.

Together, you will find it easier to verify the above four business hypotheses. In this process, direct conversations with customers, surveys, landing pages with product descriptions and advertising campaigns to gauge interest in your offering will be useful. Try selling your solution to a small sample. Then you will see what works in your current business model and what needs improvement.

Only after performing a series of tests will you be able to determine whether the market selected in the second step is indeed attractive from your company’s point of view. If so, only then will you decide to hire, for example, a country manager and build more complex organizational structures. Then you will simply expand your business – nevertheless, I will skip this expansion thread.

And that’s because by a large measure, organically growing a company in a new market is akin to building a business in your home market and taking care of all the aspects you know, such as sales, marketing, HR and so on. I would like to discuss mistakes instead.

4 mistakes in the expansion

Let’s take a look at four common mistakes companies make when expanding. These range from spreading out into too many business areas at once to taking too hasty an approach to global expansion.

1. Error

   According to Peter Smolen, one of the common mistakes during expansion is getting distracted by focusing on different directions at the same time. Simply put, we want too much, too fast and at once. We want to introduce a new product while simultaneously entering new customer segments and a new market. This complicates the whole process. That’s why it makes sense to choose one expansion vector – either a new customer segment, a geographic market, or an additional product or service.

2. Error

   Another common mistake is to expand too quickly. The constant push by investors to build global unicorns and media reports of fast-growing competition sometimes encourage them to go that route, the route of expansion.

   However, it is not always worth it. There is a lot of value to be discovered in an existing market that you know and understand well. Rather than entering a new market, consider beforehand what share you’ve captured in your current market and whether it can sometimes improve on that score. Often the answer will be yes.

3. Error

   The third mistake is to choose the wrong direction of expansion, as if geographic expansion were the only vector in which to expand. This is not the case.

   By deciding to go West or East, it’s easy to forget that customers also evolve and grow out of products. As a result, it happens that startups blinded by the vision of global expansion lose their current customers. And sometimes it’s better to think about how to modify your offerings so that they still appeal to customers whose needs have changed over time.

4. Error

   The last mistake is to rely only on quantitative data. In terms of numbers, the market selected in such an analysis may appear as the one you absolutely must enter – it’s big, the customers are there and the money is there. Only that the numbers do not reflect its full specifics. You also need to know the customs of customers and their ways of handling products and services. This is where qualitative analysis and a local expert who knows a particular market inside out are helpful – it’s always a good idea to have one in your corner.

Case study. The Programming Giants

What does expansion look like in practice? Let’s take a look at Programming Giants- a Polish programming school for children, which operates globally under the Coding Giants brand. In addition to Poland, this thriving educational startup also teaches in 14 countries, including Spain, Germany, Dubai, Mexico and Australia.

David Lesniakiewicz, the co-founder of the Programming Giants, is undoubtedly knowledgeable when it comes to the issue of global expansion. That’s why I decided to ask him to share his experiences, insights and tips on the subjects. This is his comment.



Source: Giganci Programowania (https://www.giganciprogramowania.edu.pl/)

Decision and readiness

In the case of Giants, the decision to enter foreign markets was driven by the opportunity to scale the business based on our existing services in Poland and, above all, on the positive, healthy metrics we have developed over the years.

Our financial position in the Polish market gave us security and allowed us to invest strength and resources to test appropriately selected foreign markets.

The business model also played a significant role here. As an organization growing in two ways – based on in-house outlets and online classes on the one hand, and the basis of stationary franchise outlets on the other – we were able to test the possibilities for growth in foreign markets in each of these options.

Of course, this requires adequate resources and communication, but it also produces adequate results that can be immediately translated into providing the customer with an offer in the right formula. In turn, testing both formulas us to decide which one or combination of them will ultimately work best in each country.

Preparing for expansion

We collect data extensively and in a variety of ways – from desk research conducted in-house, through cooperation with research agencies. Of course, we start with basic data about the market, its potential derived from economic indicators and metrics about our business, and a brief competitive analysis. This is the basis.

The more difficult part concerns studying the needs and business environment.

Then we conduct tests because in the end, they are the only thing that decides whether we enter a particular market or not. The process is complex and a little different in each market, and it also evolves as the organization learns more and more about the differences we see in customer needs in different markets.

Our organization is customer-centric by design, and we strive to nurture this approach at every stage of business decisions because it translates into the quality of service and ultimately the success of our business.

Testing the market

The next step after selecting a target market is to conduct detailed testing of our customer acquisition funnel. This process involves analyzing every step, from collecting leads (mainly through performance marketing), to organizing trial lessons, to converting interested people into regular customers.

This will help us to accurately measure the effectiveness of each stage of the funnel and calculate the customer acquisition cost (CAC). This phase is crucial to our strategy, as it is the basis for our decision to continue expansion in a given market.

Insightful analysis allows us to identify potential areas to optimize and improve our marketing efforts. Accurately measuring the effectiveness of each stage of the funnel is essential for making choices about resource allocation and marketing and sales strategies. This, in turn, translates into better alignment of our offerings with customer needs and expectations in the new market.

Potential risks

Mistakes, of course, can be pointed out a lot, and it is important to remember that from the perspective of our organization, by new market we currently mean any foreign market.

So here is the issue of cultural differences, which can translate into many differences in the way business is conducted in the home market and a particular foreign market.

The mistake in this case may be insufficient knowledge of the market or ignoring the differences. This leads directly to a lack of sales, and without knowing why.

Another mistake can be a lack of operational flexibility. Differences between markets can make the business organization look different in each market. You need to observe these needs and respond to them on an ongoing basis.



A misguided expansion. Evacuation plan

Finally, let’s assume such a scenario. You made a decision to expand your business, chose a market and started to set up in it. But after some time you realized that it was a wrong move after all. So now you want to back out.

The question is How? This is not an easy process, although the assumptions are simple.

In this case, I believe that the decision to withdraw from the market is justified and should be taken as soon as possible. Nevertheless, it is connected with certain consequences, because at this stage we are already burdened with contracts with customers and business partners. We can’t just leave them, says Piotr Smoleń.

So what does he advise?

First, take care of customers who have taken the risk of working with us. Second, inform them of your plans, and then arrange for a smooth and painless transition to a new supplier, which will, of course, incur costs. And to offset them, there is only one thing you can do: do it as quickly as possible.

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]]> /how-to-choose-price-metrics-for-your-business Fri, 02 Feb 2024 08:00:20 +0000 /?p=67063 One of the factors that helps not only to attract better customers but also to retain them for a longer period, is the price metric. What does it consist of and how to choose it? You’ll find out in the following article!]]> What is a price metric?

There are two definitions. One more formal and the other less formal. The more formal one goes: “A price metric is a unit of consumption for which the customer pays.” The less formal one, on the other hand, is contained in a simple question: “What do we charge customers for?” And as we’ll see in a moment, you can “cash in” for almost anything.

This was perfectly illustrated by Steven Forth, managing partner at Ibbaka, who used the example of chocolate (you can find his text here). The easiest way to buy chocolate is to buy a whole bar. But you can just as well buy chocolate by weight or by the piece (pralines). Here “bar, weight and pieces” are price metrics.

With that said, these metrics will vary by industry, product, customer segment and, most importantly, by the value offered.

Cab vs. car-sharing

For example, when taking a cab or renting a car through a car-sharing platform, we want to achieve the same goal – to get from point A to point B. Nevertheless, the two services are different, and the difference between one and the other is, among other things, the customer segment (without a driver’s license you won’t rent a car), the value (convenience vs. freedom) and just the price metrics.

In the case of a cab, you pay a certain rate per door slam and kilometer traveled. In the case of car sharing, on the other hand, you pay for kilometers and minutes. But more than that, pricing metrics very often differ between service providers operating in the same industry. For example, one car-sharing provider may charge its customers for kilometers and minutes driven, while another may charge for a full day of driving.

Well, now the question is, how can you know what YOU should be cashing customers for?

Look for the answer in the value.

Value vs. price metrics

In a previous article (this one here) we described three methods of pricing – based on costs, prices offered by competitors and value (understood as the set of benefits a customer derives from using your product or service). This third method of pricing is the best because it allows you to find arguments to justify the price. If you don’t have them, the price in the eyes of customers will always be too high. So how do you set prices based on values?

Price vs. value. Three steps

Value-based pricing consists of three steps.

1. Understand the value you offer the customer.

The easiest way to start is by brainstorming. You look at your offering, make a list of the features, functions and parameters of your product or service, and then ask yourself “What’s in it for the customer.” In this way, you determine the benefits, and therefore the values.

Then you do the same with your most important competitors – perhaps something from their offerings will be worth including in yours? At the same time, you can also talk to your customers and ask them what they value you most for. And if you are just entering the market, nothing prevents you from talking back to your competitors’ customers.

You should finish this step with a list of values in hand.

2. Measure and select the value.

What factors do customers consider when considering a purchase? Price? Quality? Availability? Yes. They also take many other factors into account. Think about what these attributes are – write them down.

Then determine whether these parameters are equally important. They won’t. Some will be more and some will be less critical. Then determine how good you are at a particular attribute relative to your competitors and plot the data on a competitive advantage matrix.

This matrix consists of two axes. The vertical Y axis represents the relevance of a particular attribute – the higher you place it, the more influential the attribute is. The horizontal X axis, on the other hand, represents the attribute’s rating relative to the competition – the further to the right you are, the better you are at executing that particular parameter.

This means that your most essential values will be in the upper right corner. These values will be the most expensive. Of course, not all customers will need these values, and therefore will not pay for such a product or service. What then?

In such a situation, it makes sense to segment customers and prepare specific solution packages for them. In this process, you should divide customers into those who want the following kind of solutions:

• the best,
• for now,
• easy to get started,
• cheap.
3. Communicate your values.

The third step is to communicate values. It’s not worth doing it through the lens of features and functions – don’t talk about them. It’s better to do it the way Steve Jobs did. When he presented the iPod, he didn’t say it was a music player for 1GB MP3 files. He was talking about 1,000 songs in your pocket.

Selection of price metrics

Once you know the values that, on the one hand, are important to your customers and, on the other hand, that you can simply “prove”, ideas for pricing metrics will naturally begin to emerge. Perhaps there will be so many of them that you won’t quite know which ones to choose and how many there should be. With help comes the criteria described by Thomas Nagle in his book

Thomas Nagle and his criteria

In the aforementioned book, its author listed five criteria. These are:

• Criterion #1. different values for different customer segments

Different customer segments have different needs, and therefore different values go to them. You know this because you have gone through the competitive advantage matrix already described. Here a clear conclusion emerges: pricing metrics should not only match values but also be tailored to specific types of customers.

• Criterion #2 – Track differences in cost of service

It costs money to produce and deliver value to the market. Moreover, this cost varies depending on how and how much value is delivered, among other things. So a pricing metric should take into account these costs for each customer segment to be cost-effective.

• Criterion #3 Ease of administration and measurement

Pricing should be simple – both for customers and for you. Otherwise, customers won’t understand charging (what they’re paying for), and you’ll have a problem selling and administering your solution. Here it is worth looking at how the Western giants in the movie and series streaming market do it.

For example, you can buy access to Netflix with three price options, and in each, you’ll find videos of different quality and with more or fewer screens on which to watch productions at the same time. A Disney Plus subscription, on the other hand, works on a simpler basis – you can buy either monthly or annual access.

• Criterion #4 Differentiator and competitive advantage

Price metrics are also used to build competitive advantages. So, one of the criteria you should consider is the question: will this price metric allow me to stand out from the competition? If so, great.

• Criterion #5 Compatibility with value and user experience

Does this particular price metric go hand in hand with the value offered and reflect the expected customer experience? If not, it’s not a metric worth betting on. How do you find out? By presenting your price list to customers. You can do this, for example, in direct conversations or by doing A/B testing.

A/B testing is generally helpful for price verification, only that it has to be done cleverly. For example, the way the founders of startup Wufoo did it.

During the test, they sold access to their tool in two variants – for $7 and $9. However, when customers in the “$9” group made a purchase, Wufoo charged them the lower price anyway. In this way, the company avoided disappointment (it could have happened that customers saw a lower price somewhere) and, in the process, made itself known as a consumer-friendly company.

Finally

What do you checkout customers for? In the digital world, you can cash them in for literally anything. The best example that perfectly illustrates this approach is YouTube. Its free version allows users to watch videos posted on the platform free of charge, only with ads appearing from time to time. YouTube knows that for some users this can be a nuisance.

That’s why it also offers a premium version. Then users of the platform can watch the same videos, only without commercial breaks. On top of that, they can listen to the audio with the screen off. So YouTube is cashing in customers for the ability to turn off the screen – an interesting value and price metric.

It is worth looking for similar examples, peeping at the competition and being inspired by other companies’ price lists. They will be a breeding ground for your own ideas and creative solutions.



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]]> /about-storytelling-straight-from-hollywood Wed, 03 Jan 2024 07:22:48 +0000 /?p=66870 Simply put, storytelling is telling a story. In the context of marketing, it’s telling a story about a brand. So much for the definition. It’s best to present storytelling in practice. Read on. ]]> Storytelling in marketing in Volkswagen

A child dressed as Darth Vader enters the living room. He tries to use his “force” to move a stationary bike, impress a motionless dog, and pull sandwiches to himself. Unfortunately, his powers are insufficient… but just at that moment. When his father pulls into the driveway after work in his new Volkswagen Passat, the kid tries again – this time to start the engine. Well, he succeeds.

In this creative way, the brand unveiled a new series of vehicles, equipped with the remote engine start option. At the same time, they did it in just one minute, entertaining, referring to pop culture, and just passing information about themselves without speaking a word. This is how good storytelling is done.

Watch . You can find more similar examples by simply typing “Super Bowl Commercials” into your browser. That’s a real treasure trove of information. Take a look and get inspired!

Common elements of storytelling

What can we learn about storytelling by analyzing the above example? We’ve noticed five elements.

1. A hero with a goal – the child wants to fulfill the dream of having “powers.” The objective helps the viewer to identify with the protagonist – to step into his shoes and to feel what he feels.
2. Obstacles – there are obstacles on the way. Without obstacles, the heroes’ actions would be dull. Imagine Harry Potter without Voldemort or Luke Skywalker without Vader. Boring. Enemies and obstacles push the hero forward.
3. Emotions – the kid dressed as Darth Vader makes us melt. It’s good to choose a specific emotion you want to evoke in your story. That’s what movie and literary genres are for. Comedies entertain, horror films scare, etc.
4. The element of surprise – in the case of Volkswagen, this element is at the end of the spot.
5. Product placement – it may seem that since we use storytelling in marketing, the hero of the story should be the brand or its product. This is not true. This is rarely the case. In this example, the brand is merely an element of the story world or a means to an end.

Three elements of a good story

Stories are made up of many elements. But these three must be present in every one of them, or there would be no story to tell.

Hero

The hero is a central figure of a story. This is the character the reader, viewer, or listener focuses on. Their main task is to act and achieve their goals. If they just sat idle, there would be nothing to watch. It would simply be boring. And boredom is a killer for a story. It is through the actions of the hero that the viewer learns about the world of the story and, most importantly, identifies with the hero. And here is the first great challenge for storytellers. How to make the viewer, reader, or listener identify with the hero? There are several ways. We will mention two.

1. Set a big goal for the hero. Everyone has some needs – to feel safe, to be loved, to self-actualize, etc. Goals, on the other hand, are emanations of these needs. For example, Harry Potter’s goal was to kill Lord Voldemort. If he had not done so, he would have died himself and allowed the world of magic to be ruled by a wizard. In the story, the hero and his friends are constantly in mortal danger. So there is no way to feel safe. Harry must reach for safety.
2. Make the hero unfairly treated. Remember how three boys on bicycles oppressed little Forrest Gump by throwing rocks at him? And remember that Forrest couldn’t run because he had leg braces? He was bullied. He was fighting a losing battle. And then you started cheering for him and repeated after little Jenny “Run Forrest, run away”. It’s normal to keep our fingers crossed for the weak – for Forrest, for Rocky, for Neo, etc.

Enemy

The hero must be as interesting as the problem they have to face. And for the problem to be interesting, the hero needs an enemy-someone strong, powerful, and better than the hero themselves. In fact, the enemy must be strong enough to make the story’s audience doubt the hero’s success. This makes us curious.

Anyway, let’s look at popular examples. Lord Voldemort was the most powerful wizard ever. Darth Vader was the one who was supposed to restore balance to the galaxy but went to the dark side. And Ivan Drago was a Russian killing machine far more powerful than Rocky Balboa.

Conflict

When a hero wants something and an enemy stands in their way, we have a conflict. It doesn’t always have to be a fight to the death. In any case, the conflict has to be interesting and believable. And what does that mean?

In our opinion, no one has explained it better than Corey Mandell, an American screenwriter who has worked with stars, such as John Travolta and Ridley Scott. In one of his interviews, he recounted such a story.

“In the middle of a class with students, a teacher gets a call that his brother has had an accident and if the teacher doesn’t come to the hospital in 20 minutes to donate blood, the brother will die. Of course, the teacher drops everything and heads for the exit.”

Is there anything that can stop him? Let’s consider three options.

• Option 1: The chair. Is this a problem? No problem at all. He’ll go around it and just walk away.
• Option 2: The student. “Don’t leave! Stay and finish the lecture, I want to listen.” Is this a problem? Again, no. His brother’s life is more important than the lesson.
• Option 3: Guns. A student at the back of the room pulls out a gun and points it at the teacher. “Come any closer to the door and I’ll shoot you. Let your brother die. I hate him.” What will the teacher do? Nobody knows. And that’s interesting.

This is a believable conflict. Watch

How to do storytelling? Tips from Hollywood

In our opinion, the best storytellers are in Hollywood and write scripts for movies and TV series. And if you want to learn storytelling, learn from the best. That’s why we’ve put together a set of useful tips below. Let’s take a look at them.

Tip 1. Start with Glenn Gers’ 6 essential questions

Before you write a story, you have to make it up. And to invent a story, you need ideas. But where do you get good ideas? It is not a question of where, but how. How do you get them? There is no better way than through a process of asking yourself questions. At least, that’s the opinion of Glenn Gers, who wrote the screenplay for “Fracture”, starring Anthony Hopkins and Ryan Gosling.

That’s why when he gets down to writing, he always starts by asking himself these six questions. Finding the answers to them allows him to sketch out the whole story, to get a rough idea of how it will go. And that is a good start. The questions are:

1. Who is it about?
2. What do they want?
3. Why can’t they get it?
4. What do they do about that?
5. Why doesn’t that work?
6. How does it end?

Here is a video where Glenn Gers discusses the above questions:

Tip 2. Structure your story

Once you have an initial outline of the story you want to tell, sooner or later you will need a structure that will make the story interesting to the viewer. And by structure, we mean the way the story is told and the order in which events are presented. Here again, it will be useful for you to know the so-called monomyth, that is, the stages that mythical heroes went through in their stories.

Books have been written on this subject. Two of them are worth reading – “The Hero with a Thousand Faces” by Joseph Campbell and “The Writer’s Journey”. Mythic Structures for Writers” by Christopher Vogler. The latter is more up-to-date, so we will quote the story structure presented in it. By the way, Star Wars is largely told through the prism of this structure:

• Ordinary world – the hero begins his journey in his ordinary world. “Ordinary” means something different to everyone, for example, to a soldier, it is the trenches, to a homeless man it is the dirty streets of New York.
• The call to adventure – at some point, something interrupts the hero’s normal life and they receive an “invitation” to join the expedition. For example, Harry Potter literally received an invitation – a letter from Hogwarts.
• Refusal of the call to adventure – At first, the hero is not ready to move into the unknown, so they resist. They would rather stay at home.
• Meeting the mentor – but they meet a mentor who tells them to leave the cave and start their journey. They also provide him with resources – Luke Skywalker received his father’s lightsaber from Obi-Wan Kenobi.
• Crossing the threshold – the hero embarks on a journey, crossing the boundary between the known and the unknown world. In movies, this is usually where the main action begins – “something happens”.
• Tests, allies, and enemies – when entering a new world, the hero learns about it, makes friends, and encounters their first enemies, and we learn what rules apply there.
• The approach – here the tension rises. The hero realizes that they are in danger. They are about to meet the enemy.
• The ordeal – the hero faces difficulties that seem impossible to overcome. Fortunately, they have gained knowledge from their mentor beforehand, so they overcome them.
• The reward – the hero experiences a symbolic death, but defeats their enemies.
• The road back – the hero begins to return to their ordinary world. This is a time to reflect and summarize the wisdom they gained.
• The resurrection – a new consciousness awakens in the hero. What they have experienced so far has changed them greatly.
• Return with the elixir – the hero has returned to his ordinary life. Although the environment hasn’t changed, they are already different.

Tip 3. Use Pixar’s experience

If you’ve watched Toy Story, you probably know that one of the world’s top film studios – Pixar – is behind its production. And among its ranks is Emma Coats, who once shared on Twitter “22 rules of storytelling from Pixar”. We’ve listed those rules below.

1. You admire a character for trying more than for their successes.
2. You have to keep in mind what’s interesting to you as an audience, not what’s fun to do as a writer. They can be very different.
3. Trying for a theme is important, but you won’t see what the story is actually about until you’re at the end of it. Now rewrite.
4. The story spine: Once upon a time there was __. Every day, __. One day __. Because of that, __. Because of that, __. Until finally __.
5. Simplify. Focus. Combine characters. Hop over detours. You’ll feel like you’re losing valuable stuff but it sets you free.
6. What is your character good at, comfortable with? Throw the opposite at them. Challenge them. Make them respond.
7. Come up with your ending before you figure out your middle. Endings are hard, get yours working up front.
8. Finish your story, even if it’s not perfect. In an ideal world you have both, but move on and do better next time.
9. When you’re stuck, make a list of what wouldn’t happen next. Lots of times the material to get you unstuck will show up.
10. Pull apart the stories you like. What you like in them is a part of you. You’ve got to recognize it before you can use it.
11. Putting it on paper lets you start fixing it. If it stays in your head, just an idea, you’ll never share it with anyone.
12. Discount the first thing that comes to mind. And the second, third, fourth… get the obvious ones out of the way. Then surprise yourself.
13. Give your characters opinions. Passive/malleable might seem likable as you write, but it’s poison to an audience.
14. Why must you tell this story? What’s the belief burning within you that your story feeds off of? That’s the heart of it.
15. If you were your character, in this situation, how would you feel? Honestly lends credibility to unbelievable situations.
16. What are the stakes? Give us a reason to root for the character. What happens if they don’t succeed? Stack the odds against them.
17. No work is wasted. If it’s not working, let go and move on — it’ll come back around to be useful later.
18. You have to know yourself: the difference between doing your best and fussing. Story is testing, not refining.
19. Coincidences to get characters into trouble are great. Coincidences to get them out of it are cheating.
20. Exercise: take the building blocks of a movie you dislike. How do you rearrange them into what you do like?
21. You gotta identify with your situation and characters. You can’t just write ‘cool.’ What would make you act that way?
22. What’s the essence of your story? The most economical telling of it? If you know that, you can build out from there.

One (obvious) rule

In the end, one thing is worth realizing. In the world of storytelling, anything is allowed – except boredom. When boredom creeps in, the TVs go off, and with them, the hopes of brands that their stories will be heard.



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Business strategy	It focuses on achieving the business goals of the company, such as revenue growth, profits, and market share. It determines the general direction of the company, such as the choice of the industry and customer segment, etc. It includes decisions regarding products or services, pricing, distribution, and promotion.
Brand strategy	It focuses on building the identity, image, and values of the brand in the eyes of customers. It determines how the company should be perceived by customers and how it should differentiate itself in the market compared to competitors. It involves defining the brand’s mission, vision, and values.
Communication strategy	It focuses on planning, implementing, and monitoring effective ways of communicating with customers. It involves selecting appropriate communication channels and maintaining a consistent brand message. It aims to increase brand awareness, build trust and customer loyalty, and support sales.