So maybe it's worthwhile to start with an example and the
one that I like to give is, is in the automobile industry.
When you think about long time ago, cars were sold as a base
car with, you know, a very long list of options.
And over time this company moved to packages of options that were
bundled together, so a premium package, a sport package, etc.
So what prompts a company to actually go towards the choice
game is basically three factors.
The first one is around commoditization.
Think about the PC industries or etcetera, where through
innovation, through progress, you know cost goes down,
everything becomes included, your hardware become
commoditized and you don't need to actually provide so many options.
Digitization will be the second one.
So here we're talking about you know hardware that start to have
some IoT into it and some software layers that provide
additional values.
When this is happening in an industry, we see the needs for
more like packages providing you know both the hardware and the
software together and and different level of services offered.
The third one is simplification.
When you have too many choices, too many SKUs, too many options,
it's difficult for your customer to make choice.
It's difficult for your sales organization to communicate the
value associated with all of the options that you have.
So we end up in a situation where company tries to remove
this complexity and Dr.
more of a clear value of the choices that they can offer to
customers.
When you're thinking really of moving from the bottom the
custom games towards the Choice Game, you're moving more towards
value and you have to do that at the segment level.
So the first step is really to conduct customer research and
insights to better understand these needs, this willingness to
pay and segment you know these customers into groups that have
very similar needs.
So you can start to put up a package in front of each of
these customers if you will.
So they have to think about your competitive dynamic and assess
the sensitive dynamic that that is happening in the market
because you want for each of your package to have a sense of
where you're going to be differentiated and how you will
be communicating this differentiation.
So obviously competitive assessments is very important.
Then you can start to design the package, test them in the
market, then start to price them where you would want your list
price or or or price.
That becomes an indication of the value that each choice
represent and the discounts that will allow you to tweak this
value based on the variation within one segment of the of the
willingness to pay of each customer, right.
So very important to think to how you build this this pricing logic.
Once you have that you will then go back to the market and test
again and test again and monitor and continue to improve.
Some of the challenges in this move to choice are one during
the design phase, so being afraid of not providing enough
offer services to their customers.
People tend to add more functionalities or more features
in each of the package.
And while this sounds like a good idea at the beginning, you
actually may take the risk by doing this of cutting yourself
from customer who have a simpler need and then don't offer the
opportunity to for your customer to grow with you to have this
land and and expand motion if you will.
So it's so it's very critical in a product design to stay simple
and really not not not create choices that are too rich.
The second challenge is around pricing.
When you're thinking about choices, what really matters are
the price gap between these choices because you want them to
be representing the value that is associated with the
difference between these choices.
And usually company who are coming from the custom game are
doing pricing that is basically discounted.
They don't have the capabilities of doing this value based type
of approach to to assess the the gap between the the value of
each of the products.
The third one is really the the the underestimation of the
effort that is required to implement this package.
Because when you think about providing choices to a customer
versus being in a in a custom game, one you you have a
marketing team that need to be better equipped to communicate
simply the value of its choices.
Two, you need your sales team to sell value not sell discount anymore.
The changes are are beyond pricing there it's it's it's a
fundamental shift in how the company work function moving to
choices when you move towards a more customer centric type of
organization as you move to a Choice Game, you clarify your
offer, you better communicate the value, the choices for your
customers become simpler and we see an acceleration of deal
within the within the system.
A good example of a of a company who has made this move
successfully was one of our clients a couple of years ago in
the medtech industry.
So this company was providing medtech hardware to hospitals
and and and and labs for for pharma and etcetera.
All the time these hardware became more commoditized.
But while this was happening the company was investing a lot in
software and services.
They were coming with these hardware that they were not
really monetizing well.
So the exercise we did with them was to basically bundle the
hardware, the software and the service into a as a service if
you will offer with different tie ring of level of services
that offered us you know discreet choices for the customer.
This was at the end extremely successful.
This company that was, you know going through a flat growth
period prior to to this transition starting to actually
have growth around 5 to 10% every year and a lot was
attributed to the the implementation of these choices.