We have heard the adage before: “We deliver on Quality, Speed and Price – pick two.” And that has become the business constraint, the Iron Triangle, that we accept.
In fact, when a product or service claims to provide all three nodes of the triangle, it’s really more of a commodity with diminished value or no longer having significant market differentiation.
How does a company provide 2 of 3 values and still maintain a market edge above other competitors?
That’s to have a closer look at the Elements of Value Pyramid.
Say your logistics business is able to deliver on Quality and Speed on delivery. And because of that, your price point is going to be higher due to the infrastructure needed to fulfil that. Your business currently lives in the Functional layer of the Pyramid describing “Quality” and “Saves Time”.
You may consider using technology to provide the client better tracking of their goods through your logistics pipeline. That could be the “Reduces Anxiety” element in the Emotional layer.
Another logistics business focused on Quality and Speed, may offer a loyalty program to encourage more shipments. That’s focusing on the “Rewards me” element in the same Emotional layer. And that’s where companies differentiate themselves from each other.
At the end of the day, customers are presented with an Apples to Oranges comparison. This adds more colour to the marketplace.
Can the logistics company provide BOTH the tracking and loyalty program? Sure they can – but it gets more costly to implement and maintain. The business has to weigh if the direction is worth the reward.
If your business aces on Quality and Speed, what would you add as your differentiating value?