SELF TEST #17: Creating Potential New Products and Services
Test #1:
What are the typical cost categories an Intermediary customer incurs with our product?
Answer:
There are four of these:
Obtain, Sell, Guarantee and Return (abbreviated as OSGR).
Test #2:
What are the typical cost categories a Final customer incurs with our product or service?
Answer:
There are four of these:
Acquire, Use, Maintain and Dispose (abbreviated as AUMD).
Test #3:
What are the objectives of a product and service improvement program?
Answer:
There are three objectives. First, avoid elimination from our current Core customer relationships; second, attract more Core customer volume by doing something unique; and, third, offer an uncopiable benefit.
Test #4:
What does the term "net value to the customer" mean when referring to innovation?
Answer:
An innovation has net value to the customer when the innovation reduces the customer's cost system (Obtain, Sell, Guarantee, Return or Acquire, Use, Maintain and Dispose) after any price change that the innovation requires of the customer.
Test #5:
How do we Add Knowledge to the customer?
Answer:
There are three basic opportunities to add knowledge to your customer and, thereby, improve your product and service package. First, you can help customers recognize and recall the name of the company and its product. Second, you can help the customers understand the unique benefits of your product compared to others. And third, you can explain how the product can or should operate ideally in the customer's cost system.
Test #6:
How do we Reduce Resources the customer uses with the product?
Answer:
We can improve the product and service package by reducing the resources that the customer requires to use the product. The first, and most obvious, resource to reduce is money. Here we reduce the money the customer uses with the product, including customer spending both on the product itself, as well as on other products and services used with our product. Second, we reduce the energy the customer uses with the product. Energy is a short form of description for 1) the effort that the customer must use with the product, that is, the physical constraints that the customer must overcome and 2) the health, or the toll on the health that the product takes on the customer. Finally, we can reduce the time the customer must spend in setting up, using or disposing of the product.
Test #7:
How do we improve the customer's experience with the product?
Answer:
We can improve our product and service package by enhancing the experience the customer has with our product. This includes such improvements as adding a new appeal to one or several of the senses, or we might associate the company or the product with an image to increase the customer's pleasure in using our product. A third way to improve experience is to increase the customer's sense of security with the product. And, finally, we might improve the experience by entertaining the customer while the customer waits for, or uses, our product.
Test #8:
How do we know the customer will find a product or service innovation attractive?
Answer:
The product or service innovation will usually be attractive if it reduces a specific customer cost by more than 25% in excess of the additional price, if any, we charge the customer for the innovation.
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