As Kaplan and Norton say in their now classic book Strategy Maps, the strategy is based on a differentiated customer value proposition.

To put it another way, unless you find something unique and valuable to your customers, there’s no way to guarantee your business success.

Customer Value Proposition (CVP) in digital domain (6Cs Model)

6Cs of customer motivation, initially suggested by Dave Chaffey is still one of the most online popular customer value proposition models.

6Cs model, as the name implies, consists of 6 dimensions of possible value propositions in the digital world:

Despite the fact that the 6Cs model is widely cited in digital marketing books and articles, it’s assumptions are still very similar to the physical market assumptions. It seems that the author, have considered the digital market just as the old physical one, except the fact that the new market in enabled by digital distribution and delivery services.

The product ownership rights are still considered as granted, to make an example. However, we are all aware of the copyright infringements and violations in the digital era.

As Kevin Kelly notes, the Internet is a large copying machine waiting for new content to copy it freely as much as possible.

Therefore, despite the fact that the digital communication technologies provided creators with convenient ways to deliver their product,  they made product piracy even more convenient.

Considering the above fact and many other ignored characteristics of the current digital era, it seems that we have to find a new model to survive in the digital age. The age in which stealing a product is much easier and faster and straight forward than purchasing it.

Kevin Kelly in his book titled The Inevitable coins the term “generative values” to describe values which people are still ready to pay for them even in the digital flowing era.

I just leave this diagram here to describe every single component of it in the future articles:

8 Value Proposition Ideas in the digital age

Related Article: Immediacy is something people are willing to pay for.

Note: I have used the term ideas instead of Model as Kelly doesn’t claim that he has suggested a model. Instead, he just calls the above factors as value generation ideas to convince the customer to pay in the post-copyright era.

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Everything seems simple and reasonable:

You just offer something for free and build up a customer base and then offer them other features or other products based on a premium.

Sure it can be a successful business model as we see many giants of the digital age started with the same idea or still stick to it. However, if you consider so many failed cases where never had a chance to be heard or featured in the media, you may change your idea.

It has always been said that evolution is a game which clears traces of its failure and promotes its successful species. It’s not only the case with natural and biological evolution. The same holds true for the evolution of businesses. So, we should be careful not to be deceived by the successful species and always have a look at the vast amount of failures which may be destined to be one of them.

Penny gap is one of the cognitive errors of our mind which dramatically influences our price perception. Although the large gap between free and cheap-but-not-free products was under study for decades, penny gap is a very nice name for the concept coined by Josh Kopelman.

The gap between a free product and a penny product is wider than it appears. It’s a serious psychological hurdle on the path of converting a got-used-to-pay-nothing customer to a paying one, and this is a bitter fact ignored by many of the entrepreneurs and business owners.

It’s clear that there may be technics and strategies to convert free customers to paying customers, however, it’s not as easy as it seems.

Still you may say I do not expect to get a penny from most of my free customers, and I accept the fact that they are not going to pay anything. But they would be my promoters and this kind of promotion is much cheaper than traditional advertising approaches. As Sarah Gilbert notes:

Yes. The Idea of Sarah Gilbert is logical but may not be practical as there are many other factors which we have to take into consideration.

My personal experience confirms Barry Barters’s statement: Free customers have more time, cost more resources and make more complaints. Although still you may prefer to use freemium business model, it’s better to understand that costs for free customers are largely underestimated as most of the books and articles are written by people who had not practical experience in running a freemium business model.

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The digital strategy is one of the buzzwords in today’s technical conversations. However, still there’s not a real consensus on the meaning of the term.

The terms digital strategy and IT strategy are used interchangeably by most of the technicians.

However, as Mark McDonald emphasizes in his classic article in Harvard Business Review, digital strategy does not equal IT strategy. Most of the IT technologies, McDonald notes, treat IT in isolation and without aiming to create a digital edge.

The definition of the digital strategy proposed by the digital strategy conference is one of the rare definitions that takes strategic concepts into consideration:

Digital strategy is the process of identifying, articulating and executing on digital opportunities that will increase your organization’s competitive advantage.

Hence, there are a couple of questions that we should answer before developing a comprehensive plan for digital strategy. Here I’ve listed some of them:

• What do we mean by the term digital?

  As Pete Swabey notes in his article titled what is digital strategy, we have to specify the meaning of the term digital. There’s a wide variety of tools, technics, and solutions that could be labled as digital. Even an E-cigarette is a kind of digital tool! So digital technology may mean a digital platform for internal communication in a company while it may mean social network presence or data mining solutions in the other one.

• What are the “real” opportunities?

  Not every digital potential is a digital opportunity. Every day we face with new digital tools and solutions: New digital channels, new software, new gadgets, and new digital hypes. But which one can be an opportunity? Shall I use every available social media channel to reach potential audience? Shall I push my colleagues toward a paperless office? It is really advantageous to automate and digitize every organizational process?

• ِDigital Presence vs Digital Process

  Many businesses are physical businesses who look for some kind of digital presence. They want to reach the potential customers (or audience as we call it in content marketing) and pull / push them through the sales channels. But other businesses are using digital technology to build / develop their business processes. They may be hybrid business or a pure digital player.

• We have to know our time horizon

  This is the question that shapes the whole strategy. Do we look for short-term results from our digital initiatives? Or we are ready to invest in our digital strategy for a couple of years without any tangible result? The former may lead to an aggressive content marketing campaign while the later may lead to a digital-first public relations department.

• Digital technology as a core competency or as an strategic enabler?

  This is the classical question of digital-based vs. digital-first strategy. In the digital-based strategies, we try to use digital technology as a strategic enabler helping us in deployment and implementation of the strategy. So referring to Mark McDonald statement, as far as integration is concerned, it’s an integrated approach. However, there’s another approach to the digital technology: Developing a strategy based on digital competencies. This approach is called as digital-first approach by some authors.

In developing any digital action plan, you have to think about the above-mentioned questions. Otherwise, new tools and initiatives will just lead to more resource consumption and strategic conflicts.

This is the reason that I put the Digital Strategy in the first steps of the content marketing roadmap.

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