Twelve Building Blocks of Value

The 12 Building Blocks of Value: Part 1

There are an infinite number of ways to build marketing strategy. Some are effective, some are not. Some inspire the creation of unprecedented value for the world, some land with a thud as potential customers couldn’t be bothered with what has been developed for them to use. What makes the difference between these two types of marketing approaches?

After many years of watching successes and failures in living color through my own work as a marketing executive, consultant and now as a professor, I’ve come to learn that when people or companies are working to create successful new products and services there are twelve fundamental building blocks of value.  When these building blocks are organized properly by an adept executive or team, they can be combined into stunning successes.

This process is at the heart of The Value Plan approach to marketing strategy that I’ve outlined in Section 3 of my new book, The Value Plan. While I’ve covered the most important element of building such strategies in my previous article, The Mindset of Marketing Success, in this article I would like to introduce (or re-introduce) you to each of these twelve essential building blocks of value. Some may surprise you, some may seem patently obvious, but all are essential to understand in crafting your own breakthrough products and services.

Because this is a fairly long post, I have added the full list of building blocks in this infographic, but have broken my post it into two parts for easier reading.

The 12 Building Blocks of Value

The 12 Building Blocks of Value


Building Block #1: Core Values
In any executive team meeting or MBA classroom discussion, when I introduce this building block first, it always leads to passionate discussions. “Why are core values a building block of value?” is usually the first in a string of increasingly dubious and contentious questions raised by my audiences. “Professor” (and the tone when they use this word is usually not of the respectful manner, but of the one used with someone who has spent one too many years away from the actual working world), “you can’t honestly think that core values have an impact on marketing strategy, can you?”

Yes, I can, and I do. The way I convince my students, and hopefully I can similarly convince you that your core values are fundamentally important in building value-driven marketing strategy, is that these clearly define who you are and why you and your colleagues come to work today. These give you the steering wheel that you need to make the necessary decisions that any successful marketing strategy will require. Without them, you will lose your way.

Imagine you are working on a new product, and you learn in research that customers don’t care about the recycling potential of the materials you use in your products. If your core values aren’t focused on environmental friendliness, you’ll readily listen to these results and create products without such inherent qualities. If your core values require such focus, you may go searching for new customers.

Patagonia has core values around protecting our planet, and this is reflected in their decision to source only organic cotton, even though such a decision comes at a higher price both for them and their customers to pay. Without such core values, any cotton will do.

Before any decision is made on marketing strategy, value, products or service, core values are the most important and also the easiest to overlook building block in your value-driven marketing strategy arsenal.

Building Block #2: The Lightning Rod Target Customer
In his book, “United We Brand”, Mike Moser introduced the idea of the “Lightning Rod” target audience to those interested in crafting a winning brand strategy. I’ve tried many different words to describe this customer group, from “Primary Target Audience” to “Avatar” (From Jeff Walker), but the idea of a Lightning Rod drives home the point that this is the one group that stands out amongst all others as the clear focus for your value-creation and delivery efforts.

Seth Godin brilliantly describes this customer segment as a “Tribe”, and he argues that defining this group has become essential for effective marketing today. But in my MBA marketing classes, with students from 20+ countries on any given day, I’ve found that before we get to describing the Tribe, we first need to build a persona or picture that represents exactly with whom we would like to be building relationships with our products and services, and the journey they are expected to take with our product, service or company. This is the Lightning Rod Target Customer (LRTC) and clearly defining this person as well as their tribe is our second building block of value.

Building Block #3: The Problem Worth Solving (PWS)
There are many possible problems that you and your company can choose to solve with the products and services that you create. But this third Building Block is focused specifically on finding that problem that is truly worth solving for your company and at least the Lighting Rod Target customer. As I’ve outlined in my previous article on The Mindset of Marketing Success, there are five key value actors upon whom we can focus our value-creation and delivery efforts upon, but for the sake of simplicity here, let’s focus solely on the LRTC right now.

As shown in this figure below, the easiest way to think about the Problem Worth Solving is the intersection between your Lightning Rod Target Customer and their problems, and your company, its core values, and capabilities. The purpose of this third Building Block of value is to help you and your company focus only upon those products and services that provide clear and measurable value.

The Problem Worth Solving

The Problem Worth Solving

Building Block #4: The Solution [S] Product
As I explained in my May 15th Webinar, a product at its very essence is a solution enabler. Our world is currently flooded with products, to the point where the amount of trash generated per person has reached levels that would have made our great grandparents dizzy (and disgusted). Simply focusing on creating more products is not the point of this Building Block.

The emphasis here on on the [S] or “Solution” that this product enables. Harvard University Professor Ted Levitt famously posited that people don’t want to buy quarter-inch drills, they want a quarter-inch hole. The hole is the solution, the drill is the product. When you build your winning marketing strategy, this building block ensures that you keep both clearly in mind.

Building Block #5: Story
Telling stories is at the heart of what makes us human, and as marketing executives work to identify, create and deliver true value, the ability to tell a clear, consistent and resonating story has now become vital.

This not a request to return to kindergarten storytelling time, nor a suggestion that you learn how to weave a series of parables meant to dupe or mislead your customers.

Instead, this building block focuses the value-driven marketing executive on the task of clearly expressing your core values, and approach to solving the problem worth solving for higher value to the value actors that you’ve chosen.

What do soaps, blenders and whiskey all have in common? If these are Dove, BlendtecBell’s Whisky, and Old Spice, then it is clearly great storytelling. And all are examples of outstanding use of this essential building block.

Building Block #6: Communications Channels (C-Channel)
Marshall McLuhan famously said that “The Medium is the Message,” and this becomes important guidance when thinking about the channels that you use to communicate your story across your value system and larger ecosystem. At the heart of McLuhan’s quote is the realization that the media channels you use will have an enormous impact on your story and how it is received.

Red Bull famously chose to communicate its unique story through clubs and extreme sporting events, because these channels added more credibility to their story (and were also the ones that they could afford). Mass media would have fundamentally changed the story, and potentially ruined it.

And media channels evolve. When I first began marketing at American Express, “the Internet” was one unique channel. But as Gary Vaynerchuck elegantly explains in his book, Jab, Jab, Jab, Right Hook, each social media channel requires its own unique approach. This 6th building block helps to focus your marketing strategy on the relative value of each of these channels, and to chose those that enhance the power, reach and impact of your story.

My next post will complete this list, and future articles will discuss how these building blocks can be woven together to create a breakthrough product or service. And as always, if you’d like to learn this entire process from beginning to end, please see The Value Plan book available for download here on Leanpub.

About The Author

Philip Sugai

Dr. Sugai joined Doshisha Graduate School of Business in 2013 where he teaches Marketing, eMarketing, Marketing Research, and Sustainable and Responsible Marketing to Global MBA program students. Prior to joining the Doshisha University faculty, Dr. Sugai taught at the International University of Japan in Niigata since 2002, where he taught similar courses and served both as Dean and Associate Dean for more than 6 years. He received his Doctoral degree from Waseda University’s Graduate School of Global Information and Telecommunications Studies and his M.B.A. in Marketing and Operations Management from New York University’s Stern School of Business. He has worked as a marketing executive at American Express, Muze, Inc., and Lightningcast, Inc., and as a marketing consultant for Advantage Marketing Information.

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