Last week’s article, “Underserved and Overserved Outcomes Provides the Guidepost to Innovate Around,” we learned how to use the Opportunity Algorithm to rank and prioritize desired outcomes. When we plot the outcome index scores on an X/Y graph, where the X axis represents “importance” and the Y axis represents “satisfaction,” we can see graphically how outcomes cluster along specific bands.
Generally speaking, outcomes with an index score of 15 or greater represent outstanding areas of innovation opportunity. These opportunities should be explored and exploited as much as possible. Opportunities with indexes of 15 or greater are more often found in new and evolving markets.
Outcomes with scores between 12 and 15 are more likely to occur in both established and new markets as products and services rarely execute a job perfectly. They represent the low hanging fruit the development team should focus its innovation on.
Scores between 10 and 12 are worthy of consideration, though they may not be unique enough to establish a highly differentiated solution. Nevertheless, improvements along these dimensions can yield differentiated solution separating you from the competitor pack.
Opportunities ranked below 10 are generally considered overserved and won’t provide discriminating competitive advantage no matter how much we invest in improving them. However, because they are overserved, these outcomes might represent an opportunity to reduce overall cost by reducing the performance levels of targeted feature assuming the feature remains “good enough.”
For example, increasing processor speed for a laptop computer may have very little performance advantage from the user’s point of view. But what if you could reduce the speed while extending the battery life of the laptop? Perhaps that would be a better desired outcome to pursue for a target niche.
Positioning Strategy Using Outcome Index Scores and Satisfaction Levels
As we gather quantitative data in our research to determine our outcome ranking index, we are also gathering specific information on the customer’s “current solutions” and the corresponding satisfaction levels of each outcome. We can use this competitor data in helping us shape a differentiated solution and a positioning strategy.
Figure 2 is an example of index scores for a small subset of desired outcomes along with the relative satisfaction scores of three competitors. For illustrative purposes, let’s say that brand “US” represents you, and brand X and Y are the top two other competitors in our target.
We can see that “Outcome 1” has an index score of 16.4, and relatively low satisfaction levels by all three brands. Thus this would be an outcome we would want to focus our development resources on to solve and improve.
Outcome 3 also looks like a promising opportunity to focus on. Here though, we see that competitor X has a leg up on the rest of the brands. We could attempt to create a new approach to better competitor’s X solution. Or alternatively, we could simply emulate brand “X’s” solution and achieve competitive parity.
Finally the opportunity Outcome 5 receives a 4 on the opportunity index. This suggest that the opportunity is overserved and not worth focusing development efforts on. Let competitor X continue to spend development resources on improving this outcome vector – money spent on an overserved outcome is wasted effort.
Opportunity Index Scores provide a direction to innovate around
Opportunity index scores provides us a clear picture of what customers value (importance and satisfaction ratings of desired outcomes), what customers long for (underserved outcomes), and what customers don’t need any more of (overserved outcomes).
With the index scores, we can select a core set of outcomes to design around that will lead us to creating highly differentiated products. We no longer need to blindly follow and respond to the competitors’ definition of “what the customers want,” but rather define a new value proposition we can be confident customers will want when they see and experience our solutions.
Or even better, create a whole new market segment – a Blue Ocean – where new rules of the game are created to attract and retain new customers who currently are left out of the existing market. A topic for next week’s article.
Look for opportunities that customers want solved, and market leadership is certain to follow.