Marketing the Value Matrix

I know that using words like “Value” and “Matrix” automatically make this sound like a bunch of meaningless industry jargon, but hang in there.  I’ve been using the following Value/Innovation matrix for some time with clients and I think it’s time I share it with you too.

Originally used as an explanation for the Dot-Com bubble by marketing guru, Guy Kawasaki, the following 2×2 (or Matrix) pits increasing value to your clients against the level of “innovation” provided in your services.  Let me explain.

Dell (for example) takes the approach of offering very low innovation (cookie-cutter machines, all very similar), but because they let you customize the last 5% of the machine and they’re  competitively priced, Dell can offer a high perceived value to customers.  That puts them in the bottom, right of the 2×2.

If you started a company that hand-makes golf balls and because each are so expensive to produce, you have to charge $50 per ball,   they would have a very high innovation (each are a little different) and very low value to customers (way too expensive).

Thus, you’re in the “Stupid” zone (top, left of the 2×2).

I know a hand-made golf ball business  seems an obvious bad idea, but what if you were a web designer?  If you were building totally custom websites for clients that would just as soon use a free “website builder”, you’re in the stupid zone.  I know.  That’s where JDM was for our first two years and many of the clients we’ve consulted since are still there.

If you, like many others, think you might be in the Stupid or DotCom zones of the value matrix, contact us or comment your thoughts below.  I’ll post a follow-up article on how to move to the right in the value matrix soon.