A few years back, The Economist stated that 70 percent of the value of a new car lies in intangibles. It is a great reminder that companies — and brands — are made up of impressions, insights and even ideas.
We are operating in an economy where most things can be copied, replicated and even stolen prior to the commercialization process even beginning. That is a frightening thought, especially for companies that invest only in research and development and are not adept at protecting their intellectual properties. Innovation is vital to corporate health, but it is just as vital to redesign the corporate mindset and to stockpile and protect relevant intellectual properties that can be utilized with the most important strategic customers.
More often than not, a winning organization — no matter the size — wins with ideas. They dig deep into their cupboards, and they pull out knowledge and insights or offer precise solutions to problems that their customers had no idea inflicted them.
And how do idea companies position themselves versus their unknowing competitors? We have noticed three consistent pillars of the top smaller and emerging companies:
- They set the rules of engagement in their industry and earn the role of opinion leaders with their customers and the influencers that support them.
- They transform the customer relationship from tangible products to intangible added value knowledge based services. They bring ideas to the relationship that transform their customer's business.
- They design new value and stronger alignment with their top customers by co-creating solutions right alongside the customers. They create the next generation of innovation alongside their retail partners.
As most kids will tell you, the one who gets to the park first gets to pick the teams and set the rules. Whether we realize it or not, this same principle is played out daily in all forms of business and life in general. The principle is a variation of what is called social proof — as coined by social scientist Robert Cialdini. Cialdini’s research shows that we determine what is correct by finding out what other people think is correct. The winning companies understand this principle and work very hard to earn the role of opinion leader or idea merchant in their section.
In other words, once someone of influence sets the norms and “divides up the teams,” it is very difficult to move the game to another park. The winners make it a point to set the rules, and they set them in such a way that the rules benefit their business model and their positioning and the consumer.
Whatever the dynamic, once the rules of engagement are set, it is very difficult to change the game. To be clear, the rules of engagement can be shifted, but precedent supported with insights make it more difficult to change due to the power of momentum.
Once the ball is rolling, it is very difficult to stop. Whoever gets to the park first, with the most ideas set’s up the playing field. And that is a real home field advantage.
Most of us feel comfortable buying things. It can be a new car, music, clothes, property and even services. Anytime we can see it, feel it and engage our senses, then we are OK purchasing it. But intangibles are a whole different game. We value things we can see, while we often underestimate or devalue the less tangible, including ideas, knowledge and insights.
When I have to purchase legal advice, consulting direction or even training and development, I fall into the same trap. I want to make it a transaction versus realizing that I am actually acquiring something as valuable, if not more valuable, than a tangible product. Tangible things wear out; ideas can sustain and even transform a company. In many ways, great ideas or intangible assets can transform a life, an organization and even a generation.
And when you think about it, true loyalty occurs due to the intangibles of a product or service, not despite of them.
Tangible products provide tangible expected value, while intangibles or ideas can seem less valuable, but have the potential to unleash significant growth and business transformation.
In fact, your company’s ideas may be as valuable as your products.
What are you doing to create this type of position with your company?
Dan Mack is EVP strategic sales at The Swanson Group and managing director of Mack Elevation Forum. You can contact him at (630) 607-2774 or learn more at TheSwansonGroup.com or MackElevationForum.com.