Offer: Business Performance Cell 2 (of 7)

Reimagining Strategy: Leading Through Uncertainty

This article is part-three of an 11-part series and represents an extract of Design Advisory's Business Performance and Transformation Handbook.

In the landscape of organisational transformation, crafting a compelling offer that is priced for value is the essential link connecting your strategy to your clients.

This Performance Cell explores the indispensable components of formulating an offer and pricing strategy that not only resonates with your target market but also propels your organisation towards its envisioned future.

How are you adapting the gift of value?

A Reflection Exercise: what level of confidence would you have in this statement?

Our Products / Services are actively managed to deliver value to the changing needs of target clients, and marked to market for price and quality.

What do you think other stakeholders would say; staff, clients, prospects, channel partners, delivery partners?

While your offer has so many more components than this, we’ve found it a great indicator for maturity across the spectrum, as well as being an easy method to easily identify differing views that can become the foundation of profound conversations.

Actions to Excellence

1. Defining Your Target Market

   
   

   Before embarking on any transformation journey, it is paramount to intimately understand your target market. This goes beyond surface-level demographics; it delves into the psyche of your potential clients, capturing both their functional needs and emotional desires. Developing client personas allows you to humanise your audience, enabling you to tailor your offerings to address their pain points effectively. Don’t let the name fool you, persona’s can be developed for organisations too!

   
   

2. Crafting Your Promise

   
   

   Your value proposition is the cornerstone of your offer. It succinctly articulates the unique benefits and solutions your organisation brings to the table. In essence, it answers the fundamental question: Why should clients choose you over competitors? This statement should be clear, concise, and compelling, resonating with the aspirations and challenges of your target market.

   
   

3. Developing Solutions to Meet Client Needs

   
   

   One size rarely fits all in the realm of professional services. Hence, it’s imperative to develop a versatile portfolio of services or solutions that cater to the multifaceted needs of your target clients. This entails exploring various models such as discrete transactional engagements, add-on offers, bundled or packaged offerings, or subscription services, offering flexibility and customisation to align with evolving client demands. Ensuring depth of market demand is a precursor to launch. Depending on the resourcing required for service delivery and confidence of client take up, there are various strategies to enter the market including but not limited to pre-sales, or starting with a basic offer and develop as client confidence grows.

   
   

4. Understanding Cost to Serve

   
   

   Understanding the economics behind your services is indispensable for sustainable growth. Develop comprehensive cost-to-serve models that factor in all expenses incurred in delivering your offerings. Embrace a strategic approach to service delivery, leveraging a mix of build, buy, partner, or refer models to optimise operational efficiency without compromising on quality.

   
   

5. Understand your Competitor Landscape

   
   

   Unless you operate a monopoly, understanding of your competitive environment is paramount. Utilising Porter's Five Forces is a useful methodology to dissect the competitive dynamics within your sector. Assessing factors such as market rivalry, bargaining power of buyers and suppliers, threat of substitutes, and barriers to entry empowers you to make informed strategic decisions and carve out a distinct market position.

So now you have developed a service offer and have your pricing inputs, developing a commercial model including margin and forecasting units of service sold will allow you to cross check your strategic goals are achievable. Sales team buy in on the offer design and modelling inputs is critical to ensure positive engagement and enthusiastic go-to-market.

Tools and Templates

1. Persona Development

2. Value Proposition Canvas

3. Competitive Benchmarking

4. Variable & Package Pricing Models

5. Porter's Five Forces

6. Product-Market Fit Framework

7. Pricing Pyramid

8. The 4Ps of Marketing Mix

9. Kano Model

Case Study

Adapting to Digital-First Models for COVID-19

During the global lockdowns caused by COVID, organisations rapidly pivoted their product and service offerings to meet the demands of a digital-first world.

Businesses that traditionally relied on in-person interactions, such as retail stores, fitness studios, and educational institutions, accelerated their transition to online platforms. Retailers introduced e-commerce capabilities, enabling customers to shop from home, while fitness providers launched virtual classes and subscription models. Educational institutions and corporate trainers adopted online learning platforms, offering tiered pricing for basic, live, and premium content options.

These shifts not only ensured continuity during lockdowns but also tapped into the growing preference for convenience and digital accessibility.

Lockdowns significantly altered consumer spending habits, prompting organisations to refresh their pricing strategies to stay relevant and competitive.

Many businesses adopted flexible pricing models to attract cost-conscious customers. For example, streaming services and software providers introduced free trials or discounted initial subscriptions to build user bases. Other organisations bundled products and services to increase perceived value, such as home delivery companies offering discounts on bundled meals or essentials. By creating pricing structures that accommodated economic uncertainty, organisations were able to sustain customer loyalty and drive engagement during a challenging period.

The pandemic created entirely new needs, leading organisations to innovate their offerings. Companies in industries like health, wellness, and home improvement saw opportunities to create products tailored to lockdown lifestyles. For instance, tech companies launched video conferencing tools with free basic tiers, while fitness brands developed compact home gym equipment and virtual training sessions. Restaurants reimagined their offerings with meal kits and family-sized portions designed for at-home dining.

These refreshed products and services were not just stopgaps but strategic adjustments to align with long-term consumer behaviour shifts, positioning businesses to thrive beyond the lockdowns.

Exercise in Building Resilience

One our client's favourite exercises to run is Scenario Planning. In the right conditions, it increases staff engagement, distributes risk ownership across the business and builds resilience through planning for change.

One simple method is to break staff into six groups. Ask each to develop a scenario for one of the PESTLE themes and how they would adapt the organisations offer to minimise negative impacts and maximise opportunities under those fictional conditions. PESTLE is a risk analysis framework used to identify potential risks and opportunities for an organization; Political, Economic, Social, Technology, Legal and Environmental.

Deploying the RADAR Protocol across the 7 Performance Cells has been a game changer for organisations. We hope this article has offered some new perspectives or reminders on the importance of your Offer in the context of business performance and transformation.

If you'd like to explore more, contact us for a conversation on developing these in the context of your organisation, no matter how big or small, no matter the sector you operate in, or the region you're based.

And if you'd like to explore more on your own or with your team, here are some recommendations for further reading from the team at Design Advisory.

• The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses

  Author: Eric Ries. This book introduces lean methodologies for product development, emphasising rapid experimentation and learning from customer feedback to develop products that meet market needs.

  
  

• The Strategy and Tactics of Pricing: A Guide to Growing More Profitably

  Authors: Thomas T. Nagle and Georg Müller. This comprehensive guide explores strategic pricing decisions, offering frameworks to manage markets and improve profitability.

  
  

• Monetising Innovation: How Smart Companies Design the Product Around the Price

  Authors: Madhavan Ramanujam and Georg Tacke. This book emphasises designing products based on what customers are willing to pay, integrating pricing into the development process to enhance profitability.