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How to Become IndispensableTo your Members & Other Stakeholders

Mapping the Path to Sustainable Engagement

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FROM RE-MAPPING YOUR LANDSCAPE

TO BECOMING INDISPENSABLE TO MEMBERS & OTHER CUSTOMERS

• Market foresight does not automatically translate into relevance & engagement.

• The latter takes place on the level of insight into people and human relationships and is key to 21st century leadership. It is also the piece most neglected in association management theory and practice

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BUILDING A DEMAND-CENTERED ARCHITECTURE FOR RELEVANCE

IN THE MARKET PLACE

Our research shows that there are four pivots to customer connection and value that, if executed, are “game changers” for an organization and, hence, critical for leadership decision-making:1. Constructing a winning value proposition

and basis of competitive advantage2. Moving relationships from the periphery

to the center; understanding and engaging customers continuously and on a much deeper level than ever before

3. Re-thinking & reconceptualizing the fundamentals of your business from the demand perspective

4. Solutions-based products, services and growth strategies

4 WINNING VALUE PROPOSITION & COMPETITIVE ADVANTAGE

#1

The foundational piece of your architecture

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WHAT DOES SUCCESS LOOK LIKE? “I don’t know what I’d do without VIN. I just don’t think I could run

a successful practice without them”

Every day there are over 500 active message board discussions ongoing between VINners.

I simply would never have muster up the courage to walk into a gym, full of fit people—let alone spend money I don’t have—if it wasn’t for Planet Fitness

When it comes to relaxing over a cup of coffee with a friend; or work on a report in the comfort of a warm environment and a fresh cup of coffee--it is always Starbucks.

Mexico’s construction industry is thriving because many debilitating obstacles to builders’ success have been removed—from problems with delivery and workforce gaps to those involving distributors, suppliers lack of skills.

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WHY DID THESE ORGANIZATIONS SUCCEED?• Thinking from the perspective of the

customer• Defining value by outcomes vs. promises

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VALUE PROP: COLLABORATIVE, “ONE-STOP SHOPPING” COMMUNITY FOR A SPECIFIC MARKET SEGMENT

Those who don't "know" VIN, likely think VIN is a web site. But VIN members (VINners) quickly recognize that…VIN is much more than a web site. VIN is a place. VIN is home to over 42,000 colleagues.

Like many "sites on the web", VIN has lots of features…Much more than the sum of its parts ("features"), VIN provides, for the first time in the history of our profession, what no other organization or service has been able to. Simply stated, VIN's greatest accomplishments are:

Bringing together veterinarians "world-wide" as colleagues

Bringing instant access to vast amounts of up-to-date veterinary information to colleagues

Bringing instant access to "breaking news" that affects veterinarians, their patients and their practice

Bringing easy access to colleagues who have specialized knowledge and skills

Making CE - continuing education - available EVERY day

Empowering our profession…we veterinarians have traditionally worked alone or in small groups with little contact with colleagues….

“Couldn’t live without VIN”

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YOU BELONG! LOW-COST, NO FRILLS, COMFORTABLE

ENVIRONMENT FOR NON “GYM EXPERTS”

We at Planet Fitness are here to provide a unique environment in which anyone—and we mean anyone—can be comfortable. A diverse, judgment Free Zone where a lasting, active lifestyle can be built. Our product is a tool, a means to an end; not a brand name or a mold-maker, but a tool that can be used by anyone.

In the end, it’s about you. As we evolve and educate ourselves, we will seek to perfect this sage, energetic environment, where everyone feels accepted and respected. We are not here to kiss your butt, only to kick it if that’s what you need.

“Would not be going to the gym if not for Planet Fitness”

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CONNECTION: THE SOCIAL EXPERIENCEOF DRINKING COFFEE

STARBUCKS. It happens millions of times each week— a customer receives a drink from a Starbucks barista - but each interaction is unique. It’s just a moment in time – just one hand reaching over the counter to present a cup to another outstretched hand.

But it’s a connection.

We make sure everything we do honors that connection—from a commitment to the highest quality coffee in the world to the way we engage with our customer and communicate to do business responsibly

“WHEN I THINK OF SOCIALIZING OR WORKING OVER A CUP OF COFFEE, IT’S ALWAYS STARBUCKS’

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FLEXIBLE BUILDING

SOLUTIONS:PROVIDING VALUE AT ALL POINTS OF THE VALUE NETWORK TO POSITION THE INDUSTRY FOR THE FUTURE

Our aim is to help our customers solve their building challenges… We strive to create value for our customers by focusing on more vertically integrated building solutions rather than separate products.

We constantly adapt to our customers’ needs through innovative products and financing schemes, providing them with solutions for the challenges they face in their specific market and business climate.

Removing all obstacles to success

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WHAT IS THE DIFFERENCE BETWEEN THESE ASSOCIATIONS’ PERCEPTION & DEFINITION

OF VALUE?

Who We Are: The AVMA is a not-for-profit association…[with] more than 84,000 veterinarians

Governance The AVMA Foundation Student AVMA (SAVMA) Allied Organizations AVMA Store (Products)

Members’ Perception: Nice to attend their conference, read journal, attend event etc. (declining membership)

As a VIN member (VINner), you are part of the largest group practice in the world. VINners are up-to-date and

informed. VINners access a daily veterinary newspaper….[and] a broad range of sources ….including message boards where veterinarians , world-wide, share their knowledge and experiences every day.

VINners have instant and easy access to the most comprehensive searchable online source for veterinary information.

VINners can conveniently access high quality, comprehensive CE classes from the comfort of their home or office everyday.

Members’ perception: can’t live without it (steadily rising membership)

From “About AVMA” From “Why Join VIN”

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AVMA: the association itself; generic statements & products

VIN: the customer; specific, customized solutions that enable specific outcomes daily

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VALUE PROPOSITION VS. HYPEBLUEPRINT FOR IDENTIFYING YOUR VALUE PROPOSITION AND

BASIS FOR COMPETITIVE ADVANTAGE & BUSINESS MODEL

Value propositions are NOT about you but about your customers’ perception and experience of the value they derive from you

You don’t make them up. You discover them & interpret them

They represent the reason a customer should purchase your product or service over any number of competitors or online sources: You must be prepared to answer, no only “what’s in it for me?” but “why buy from you?”

Credibility: Why should your claims be believed in the face of so much competition? Consumers are weary of all the hype surrounding them. What you are asking or claiming must not exceed what you are able to offer and enable. This is why broad, generic claims are inadequate to differentiate you and build credibility.

Outcomes: Value proposition is not about what you have but about the outcomes you enable. What outcomes do you want your customers to derive from your services?

Think of identifying and communicating your value proposition as an on-going conversation with your various customers—not a sales pitch or statement

Value propositions must translate into competitive advantage and embodied in every aspect of conducting business and delivering benefit.

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Demand-Centric approaches mean that you:

• Assess the market and develop programs and organizations by working backward—from the market and customer to the association, rather than from the association to the market.

• Shift relationships from periphery to center; take the time to understand members/customers as whole persons— not just in terms of their relationships with your association

• Have the ability to extract what matters the most to them, rather than take at face value literal answers to questions; and “reconstruct” how they make sense of the world through their values, motivations, daily routines, experience of the problems that keep them up at night.

• Understand the context for customers’ actions and decisions both on a daily level and within the larger demand and value networks.

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#2FROM INSIDE-OUT TO

OUTSIDE-IN

Seeing the world through your customers’ eyes

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DISCOVERSOLUTIONS REQUIRE DEEPER LEVELS OF

UNDERSTANDING & ENGAGEMENT

Factual understandi

ng

Strategic understanding: environment, trends, issues

Context as experienced by customer (daily work

relationships, business)

What is implied vs.

what is said; what matters most (values, motivations,

thought)

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LEVELS OF DISCOVERY

Level 1: Listening (passive; information-driven)

Level 2: Understanding (ability to interpret and go beyond what is being said)

Level 3: Empathy (ability to think like your customers; see the world from their perspective. No more “we” and “they.”

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DON’T CONFUSE ENGAGEMENT WITH MEMBER PARTICIPATION OR UTILIZATION OF BENEFITS

Engagement is how people choose to get value from the user experiences [your organization]enables. Engagement represents the purposeful choices users make to get what they want. Engagement is smack at the intersection of commanding attention and taking action.” (Michael Schrage on mobile devices)

Outcome-oriented engagement is not merely participation. It requires an entirely new level of understanding of customers as whole persons—not only in terms of their relationships to your association—and in the larger context of activities, factors, relationships and industries that contribute to their success, especially their ability to get and satisfy their own customers.

Redefine Engagement & the Paths to it.

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#3RE-THINK

the fundamentals of your business from your customers’ perspective as if your association did not exist

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THE STORY OF CEMEX (CEMENT MANUFACTURING)

Understanding of customers: assumed same values as company’s culture of engineers that valued precision

Definition of their business: produce and deliver on time quality cement

Dependability, quality & timely delivery

Assumptions of “Old Cemex” Value proposition

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How construction managers defined their problems: getting cement, and other building materials, when they needed them within their chaotic and unpredictable nature of construction.

Re-definition of the nature of their business: from orderly delivery by CEMEX’ schedule to crisis management; from cement producers to emergency respondents and solutions providers

Customized and flexible building solutions rather than separate products.

The “New CEMEX:” Revising Assumptions

New Value Proposition

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IMPLICATIONS FOR THE WAY CEMEX CONDUCTED BUSINESS AND PLANNED FOR THE FUTURE

Where it Looked for Models of “Best Practices” Emergency departments; fire stations; police stations

Shifts in Business & operational models Technology shifts into core business and basis of customer solutions: A

state of the art delivery service that makes highly innovative uses of technology to offer customers the ease of receiving products whenever they need them and customize their schedules (24/7 LOAD®)

New directions for solutions-based growth: Looking for solutions led them to launch new businesses--especially

financial and training organizations; focus intensively on community outreach & development; and form coalitions of suppliers and distributors.

What can be applied: As you look for your next phase of growth do not simply look at vertical markets or only in terms of expanding current categories. Consider relationship along value networks that increase the success of core customers and might suggest new lines of business

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Solutions-based products, services and growth strategies

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SOLUTION:ACCESS

Getting to details of motives, daily routines & context

Vets could not afford to subscribe to many journals

They were frustrated that by the time information was published it was outdated

As most vets are generalists, they urgently needed immediate access to trusted, specialist advice depending upon a few local boarded specialists or "mavens.”

Instant and easy access to research through state-of –the-art use of technology; entire system of developing consultants; capturing conversations; aggregating, organizing and creating multiple paths to knowledge

Access to thousands of colleagues (generalists and specialists) and to VIN’s specialist consultants.

Insight: “Top of mind ” problems

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SOLUTION:CONVENIENCE, CUSTOMIZATION

Understanding priorities from the perspective of the member

No time or budget to take CE courses that were only offered very few times annually and at distant locations

Making CE - continuing education - available EVERY day through the many searchable and interactive resources on VIN,

Insight: “Top of mind” problem

Solution:Holistic, outcome-oriented

community

Insight: “Top of mind” problem

Understanding & addressing the primary root of the various problems• Isolation from resources,

events like conferences; peer support• “We veterinarians have

traditionally worked alone or in small groups with little contact with colleagues.”

Creating virtually the largest veterinary practice in the world in which vets could be at the hub of conversations and ideas that influence their field; access all resources they needed when they needed them; and benefit from peer support.

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SOLUTIONS-DRIVEN BENEFITS AND GROWTH: CEMEXIMPROVING CONDITIONS FOR SUCCESS AT ALL POINTS OF THE VALUE NETWORK

• .

Problem Solution

Chaotic, unpredictable construction schedules

On demand delivery via an ATM-like Bulk Cement Dispatch System

Competency gaps/quality lapses

Needs for market development so that industry could flourish

Educational and Training Services on the use of building materials in several of the countries where CEMEX operates

Difficulty for small companies to get financing and grow

Construction financing through a number of innovative programs and partnerships that CEMEX has set up

Workforce needs High school apprenticeship programs for construction workers and cement specialists

Threat of being taken over by chains faced by distributors

Construrama® partnership that offers their cement distributor network an alternative: “to offer customers an extensive range of brand-name products at competitive prices.”

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GROWTH BY DELIVERING VALUE TO ALL POINTS OF CUSTOMER SUCCESS AND

EXPERIENCE

In the UK has invested US$5.5 million in a new cement bagging plant at its Rugby plant site in Warwickshire. The new plant has been built following extensive customer consultation, with many customers wanting the option of cement in plastic or paper bags.”

CEMEX does not see the customer only as the end-user and purchaser, but in terms of a continuum of experiences before, during and after the purchase. Its role is not just to manufacture the product but to provide solutions that increase the value of the product at every stage of this continuum. http://demandperspective.com/2012/02/05/the-care-and-feeding-of-your-members-learning-from-a-manufacturing-innovator/

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RESULTS FOR CEMEX’ NEW BASIS OF COMPETITIVENESS & VALUE PROPOSITION

Growth into a global industry leader Annual sales of US$15.1 billion One of the leading cement manufacturers in the

world World's leading supplier of ready-mix concrete, and

one of the world's largest suppliers of aggregates One of the world's top traders of cement and clinker Close to 44,000 employees worldwide

Expansion through successful acquisitions around the world & diversification

Workforce growth Industry health Mexico’s increased competitiveness