Using innovation in your business model

A key challenge I keep coming across at the moment is many SMEs fail to articulate or unlock their uniqueness. Many entrepreneuers find themselves bogged down by the need to keep cutting prices to remain competitive. This strategy in my view is a road to ruin. I always try to reinforce the point that – selling your product or service is far easier when you have a point of difference. Many entreperenurs tell me that they are in commodity markets and thats just the way it is.

I then go on to use the bizarre example of a notebook to demonstrate differentiation –  after all a notebook is a commodity – a 14cm x 10cm notebook in Tesco will cost you around £1. However look at the same size Moleskine in Waterstones – it will cost you £10. If everyone bought notebooks on price they would all go to Tesco. Positioning through innovation is a key route to gaining competitive edge. When you open any Moleskine book there is a small fold away piece of paper titled “The history of a legendary notebook” – it goes on to reference famous people that have used these notebooks. There is a brilliant line that goes… “used for the past two centuries by great artists and thinkers, including Vincent Van Gogh, Pablo Picasso, Ernest Hemingway and Bruce Chatwin. The trusty, pocket sized travel companion held their sketches, notes, stories and ideas before they became famous images or beloved books”. Then go and have a look at their website http://www.moleskine.com – they have made the business of a notebook a art form. They use storytelling to bring the notebook alive and engage the customer in a truly unique experienece.

The lesson is – we can all find a point of difference if we embraced innovation into our business model. The invisible force of creativity, however must be embedded within yours and your teams mindset.

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4 Responses to Using innovation in your business model

  1. Lynne Taylor says:

    John you are so right . I first came across Moleskin notebooks at Liverpool airport- read the legend inside and was fascinated by it- I bought one and now would never use anything else…interesting isn’t it

    It is never about price- it is about that feel good factor for your customers…

    • johnleachwp says:

      Hi Lynne – thanks – you are so right – many of the sales books forget to mention the importance of “making people feel good”.. Hope it went well last night John

  2. Phil Lewis says:

    In Moleskine’s case – as with many others – the innovation and point(s) of difference to which you refer is grounded in a clear and intelligent understanding of what consumers want and/or need. The heavy price premium that Moleskine is able to charge is borne of a compelling insight – namely, that many who write are inspired and desire to do so because they aspire to join the long and distinguished tradition of writers whose insights and ideas have helped shape the way we live today.

    I’d bet my bottom dollar that somewhere in Moleskine’s office is a strategy document that includes words to the effect of ‘history which is yet to be written’ to describe the brand’s promise. The business has correctly recognised that by tapping into the innovative thinking of those who have used its products in the past, it can unlock significant value from its market in the present and future.

    In actual fact, of course, the vast majority of Moleskine’s customers will never write anything that sees the light of day – and many of its notebooks will end up languishing, unused and unloved, in the bottom of drawers. But what it has done so well is to create just enough magic that rational thinking is often abandoned at the point of purchase.

    I think that if you’ve got a brand where the emotional ‘pull’ is ultimately stronger than the rational one, you’ve got an asset that, with the right investment, can continue to deliver value long after those whose ideas the business was founded upon have departed.

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