Operations

Process Efficiency

Process Efficiency Jonathan Poland

Process efficiency refers to the effectiveness of a process in achieving its intended outcomes, while minimizing waste and inefficiency. A process that is efficient is able to produce the desired results with a minimum of resources and time, and without generating unnecessary waste or inefficiency.

There are several factors that can impact process efficiency, including the design of the process, the skills and expertise of the people involved, and the use of technology. A well-designed process can help to ensure that tasks are completed in an orderly and efficient manner, while skilled and knowledgeable people can help to optimize the process and identify areas for improvement. The use of technology, such as automation and data analytics tools, can also help to improve process efficiency by streamlining tasks and providing valuable insights.

Overall, process efficiency is important for the success of any organization, as it can impact productivity, profitability, and competitiveness. By focusing on improving process efficiency, businesses can increase their chances of achieving their goals and realizing their full potential. The following are common types of process efficiency.

Overall

The overall efficiency of a process is the value of outputs divided by the value of inputs. For example, a production line that takes inputs of $1 million a day and produces outputs value of $1.2 million:
efficiency = (1.2 / 1) × 100 = 120%
An overall efficiency of over 100% indicates a process that adds value.

Throughput

Throughput is the output of a process or machine for a unit of time.
throughput = output / hours
For example, a production line that outputs 30,000 units in 12 hours.
throughput = 30,000 / 12 = 2500 units / hour
This can be used to measure bottlenecks. As a simple example, if you have 12 steps in a sequential process, the one with the lowest throughput is a bottleneck.

Labor Productivity

Labor productivity is output for an hour worked.
productivity = output / hours worked
For example if you produce 2.4 million dollars in value on a 12 hour shift with 12 workers:
productivity = $2,400,000 / (12 x 12) = $16,667/hour

Resource Efficiency

Efficiency can also be measured for any resources consumed by a process such as materials, energy and water.
resource efficiency = output / resource input
For example, if it requires 90 kWh of electricity to produce 30,000 units:
energy efficiency = 30,000 / 90 = 333.3 units / kWh
Efficiency can be measured for any process input in order to optimize costs or reduce environmental impact.

Management Efficiency

Management Efficiency Jonathan Poland

Management efficiency refers to the ability of a company or organization to effectively utilize its resources, such as capital, labor, and materials, to achieve its goals. An efficient management team is able to identify and prioritize the most important tasks, allocate resources effectively, and make timely and informed decisions.

There are several factors that can impact management efficiency, including organizational structure, communication and decision-making processes, and the use of technology. A clear and effective organizational structure can help to ensure that tasks are properly delegated and that resources are used in the most effective way. Strong communication and decision-making processes can also help to ensure that information is shared effectively and that decisions are made in a timely and informed manner. The use of technology, such as project management software and data analytics tools, can also help to improve management efficiency by streamlining processes and providing valuable insights.

Overall, management efficiency is critical for the success of a company or organization, as it can impact productivity, profitability, and competitiveness. By focusing on improving management efficiency, businesses can increase their chances of achieving their goals and realizing their full potential. The following are common examples.

Allocative Efficiency

Allocative efficiency is the deployment of resources to create value. A failed strategy, project or product can dramatically reduce the efficiency of an organization by dedicating capital and spending to activities that create no value.

Return On Capital

The operating income earned by a firm relative to capital employed. For example, a small restaurant with $40,000 in capital that produces $400,000 in operating income is extremely capital efficient. Managers are responsible for using capital efficiently including cash, land, facilities, machines and technology.

Productivity

The output in an hour worked for employees under a management team. Productivity rates vary greatly by industry. For example, a bank that deploys a great deal of capital per employee should be more productive than an company that uses little capital such as a restaurant.

Resource Efficiency

Resource efficiency is the use of resources such as energy, water, land, materials and parts without waste. For example, a farm that is managed to use less water per acre without sacrificing yield.

Process Efficiency

The amount of time, labor and expenses consumed by a process relative to its outputs. For example, a company that is managed to have the lowest shipping costs and the fastest order turnaround time in the industry.

Cost Efficiency

The cost of business goals and outputs. For example, customer acquisition cost is a measurement of marketing efficiency and cost per unit is a measurement of production efficiency.

Economic Efficiency

Economic Efficiency Jonathan Poland

Economic efficiency refers to the ability of an economy to produce the maximum possible value using its available resources, such as capital and labor. In other words, it is a measure of how well an economy is using its resources to generate wealth and satisfy the needs and wants of its citizens. A more efficient economy is able to produce more goods and services with a given level of resources, while a less efficient economy will produce fewer goods and services with the same resources. Improving economic efficiency can lead to increased productivity, competitiveness, and overall prosperity.

Allocative efficiency refers to the production of goods and services that meet the needs and preferences of consumers in the most effective way possible. In a free market, this is driven by competition between producers, who strive to offer the best products at the most competitive prices in order to attract customers. For example, competition between fashion firms may result in the production of trendy and fashionable clothing items that appeal to teenagers.

Allocative efficiency also requires that producers do not produce too much of a particular good or service, leading to excess supply and unsold inventory. This is a challenging aspect of allocative efficiency to achieve, as it requires producers to accurately forecast consumer demand and adjust their production levels accordingly. This is one of the primary reasons that centrally planned economies tend to be less efficient than market-based economies, as they often struggle to effectively allocate resources and meet consumer demand.

Productive efficiency refers to the ability to produce goods and services at the lowest possible cost while maintaining a certain level of quality. This can be achieved through factors such as economies of scale, productivity, and efficiency. For example, a large firm that produces toothbrushes at a large scale using automated processes and highly productive workers may be able to achieve a low cost per unit that is difficult for smaller competitors to match.

When an economy is operating at productive efficiency, all goods and services are being produced at the lowest possible cost, given the quality standards demanded by the market. This can lead to increased competitiveness, as firms are able to offer their products at lower prices, and can also lead to increased economic growth and prosperity. However, achieving productive efficiency can be challenging, as it requires firms to continuously improve their processes and find ways to reduce costs while maintaining quality.

Distributive efficiency refers to the allocation of goods and services to those who need them most. In an economy that is distributively efficient, resources are distributed in a way that allows all members of society to participate in production and benefit from its rewards.

For example, an economy where all products and services are consumed by a small, wealthy elite while the majority of the population is unable to afford the basic necessities of life would be viewed as inefficient and unfair by those who are excluded from the system. Such an economy may be vulnerable to social unrest and conflict, as those who are disadvantaged may be motivated to overthrow the system in order to improve their own circumstances.

Ideally, a system that is distributively efficient allows all members of society to participate in production and share in its rewards, ensuring that everyone has access to the resources and opportunities they need to live a fulfilling and meaningful life. This can help to promote social cohesion and stability, and can contribute to the overall prosperity of an economy.

One way that modern economies can be inefficient is by causing harm to common resources and communities through externalities. Externalities refer to the costs or benefits of an economic activity that are not reflected in the price of a good or service, and can include negative impacts on the environment, such as air and water pollution, and negative impacts on the quality of life of communities.

For example, a firm that engages in activities that damage the air, water, land, or ecosystems may incur costs that are not reflected in the price of its products. These costs may be passed on to society at large, rather than being internalized by the firm. This can lead to a situation where the firm is able to optimize its profits by engaging in activities that are harmful to the environment and communities, even though those activities may not be socially optimal.

To address this issue, many modern economies have implemented policies and regulations designed to internalize externalities, such as taxes on pollution or fines for environmental violations. These policies can help to ensure that the costs of economic activities are fully accounted for, and can help to promote economic efficiency and sustainability.

Comparative Risk

Comparative Risk Jonathan Poland

Comparative risk is a method of evaluating and comparing the potential impacts and likelihood of different risks. It is used to identify the risks that pose the greatest threat to a particular system or population, and to prioritize efforts to mitigate or manage those risks.

There are several factors that can be considered when conducting a comparative risk assessment. These include the likelihood of a risk occurring, the potential consequences of the risk, the likelihood of those consequences occurring, and the potential magnitude of the consequences.

One common method of conducting a comparative risk assessment is to use a risk matrix, which plots the likelihood and consequences of different risks on a grid. This allows risks to be visualized and compared, and can help decision makers prioritize their efforts and resources.

There are several tools and methods that can be used to conduct a comparative risk assessment, including expert judgment, statistical analysis, and modeling. The choice of method will depend on the specific goals and resources of the assessment, as well as the type and complexity of the risks being evaluated.

Overall, comparative risk assessment is a valuable tool for identifying and prioritizing risks, and for making informed decisions about how to mitigate or manage those risks. It can help organizations and communities protect themselves from potential harm, and can be used in a variety of contexts, including environmental, public health, and national security. The following are common examples.

Here are a few common examples:

  1. Environmental risks: Comparative risk assessment is often used to evaluate and compare the potential impacts of different environmental hazards, such as air pollution, water pollution, and climate change. This can help decision makers prioritize efforts to reduce or mitigate these risks.
  2. Public health risks: Comparative risk assessment is also commonly used in the field of public health to evaluate and compare the potential impacts of different health hazards, such as infectious diseases, environmental toxins, and unhealthy lifestyles. This can help policymakers and public health officials prioritize efforts to promote health and prevent disease.
  3. National security risks: Comparative risk assessment is also used in the field of national security to evaluate and compare the potential impacts of different threats, such as terrorism, cyber attacks, and natural disasters. This can help policymakers and security officials prioritize efforts to protect against these threats.
  4. Business risks: Companies may also use comparative risk assessment to evaluate and compare the potential impacts and likelihood of different risks to their operations, such as financial risks, technological risks, and market risks. This can help businesses prioritize their efforts to mitigate or manage these risks.

Product Transparency

Product Transparency Jonathan Poland

Product transparency refers to the practice of providing extensive information about products and services, including their ingredients, production methods, and origins. This practice benefits a variety of stakeholders, including businesses, professionals, and consumers.

For businesses, product transparency can help them make informed decisions about the products they purchase and use, ensuring that they are of high quality and meet their needs and values. Professionals, such as architects, can use product transparency to ensure that the materials they specify for a project meet certain standards, such as being free of volatile organic compounds. Consumers can also benefit from product transparency by having access to information about the products they buy, which can help them make informed purchasing decisions that align with their personal values and preferences.

Here are a few examples of how product transparency can be applied:

  1. Food products: Companies can disclose detailed information about the ingredients, sourcing, and production processes of their food products, which can help consumers make informed choices about what they eat.
  2. Cosmetics: Cosmetics companies can provide information about the ingredients used in their products, as well as any potential health or environmental impacts. This can help consumers make informed decisions about what products they use on their skin.
  3. Clothing: Clothing companies can provide information about the materials used in their products, as well as the labor practices and environmental impact of their production processes. This can help consumers choose clothing that aligns with their values and preferences.
  4. Electronics: Electronics companies can disclose information about the materials and processes used in their products, as well as any potential environmental impacts. This can help businesses and consumers make informed decisions about what products to purchase.

Waste is Food

Waste is Food Jonathan Poland

 

The concept of “waste is food” is based on the idea that an industrial economy should not produce any waste except for biological nutrients that can be safely returned to the environment. This principle forms the foundation of the circular economy, a sustainable economic model that aims to eliminate waste and minimize resource use.

The “waste is food” approach is an example of systems thinking, which involves considering the interconnectedness and complexity of different systems. In the context of the global economy and the environment, this means recognizing that there are complex interactions between thousands of waste products and thousands of organisms. Therefore, to effectively address environmental issues, we need simple solutions that do not require a deep understanding of these complex interactions.

Environmental Challenges

Environmental Challenges Jonathan Poland

Environmental issues are detrimental changes to the Earth’s natural surroundings that negatively impact the current quality of life for individuals and potentially jeopardize the long-term sustainability of communities, societies, and even life itself. The following are common examples of environmental problems.

  • Acid Rain
  • Agricultural Runoff
  • Air Pollution
  • Bioaccumulation of Pollution
  • Biodiversity Loss
  • Chemical Spills
  • Construction Emissions
  • Coral Bleaching
  • Cruise Ship Emissions
  • Deforestation
  • Desertification
  • Electromagnetic Pollution
  • Endocrine Disruptors
  • Environmental Impact of War
  • Extinction
  • Food Quality
  • Global Dimming
  • Global Warming
  • Habitat Destruction
  • Habitat Fragmentation
  • Herbicide Pollution
  • Illegal Dumping
  • Incinerator Pollution
  • Indoor Air Quality
  • Invasive Species
  • Land Degradation
  • Marine Debris
  • Medical Waste
  • Microplastic Pollution
  • Mining Runoff
  • Nanomaterial Pollution
  • Noise Pollution
  • Ocean Acidification
  • Oil Spills
  • Ozone Depletion Persistent
  • Organic Pollutants
  • Pesticide Pollution
  • Radioactive Waste
  • Resource Overexploitation
  • Shipping Emissions
  • Soil Pollution
  • Space Junk
  • Toxic Waste
  • Unsustainable Fishing Practices
  • Urban Heat Island
  • Vehicle Emissions
  • Volatile Organic Compounds
  • Water Pollution

Cause & Effect

Environmental problems are defined according to their impact on the environment or people. For example, consumerism is arguably a root cause of pollution but isn’t an environmental problem itself.

Problems & Risks

Beyond current problems, there are environmental risks that represent possible future problems. For example, the risk of nuclear war.

Solutions

Solutions to environmental problems generally require systems thinking whereby you consider possible unintended consequences. For example, solutions that directly address the root cause of a problem such as producing vehicles with zero or low emissions that are required to be efficiently recycled or reused at the end of their life.

People, Planet & Profits

People, planet & profits is the principle that solutions to environmental problems not make things worse for people or the economy. This defeats the false dichotomies of environment vs people or environment vs economy. This can also be viewed as pragmatic realism that recognizes that environmental action that is hostile to people and their goals it is unlikely to succeed. For example, green infrastructure projects that provide jobs and solve environmental problems at the same time.

Real Estate Investing

Real Estate Investing Jonathan Poland

Real estate investing refers to the process of buying, owning, managing, and selling real estate properties for the purpose of generating income or capital appreciation. Real estate can include residential properties such as single-family homes, multi-family homes, and apartments, as well as commercial properties such as office buildings, retail spaces, and industrial buildings.

There are several different strategies that investors can use when it comes to real estate investing. Some common strategies include:

  1. Buy and hold: This involves purchasing a property and holding onto it for a long period of time in order to generate passive income through rent or to benefit from capital appreciation.
  2. Fix and flip: This involves purchasing a property that needs renovations, completing the renovations, and then selling the property for a profit.
  3. Wholesaling: This involves finding a property that is being sold at a discounted price, and then finding a buyer who is willing to pay a higher price for the property. The investor then earns the difference between the two prices as profit.
  4. Rent-to-own: This involves entering into a contract with a tenant where the tenant agrees to rent the property for a certain period of time, with the option to purchase the property at a later date.

Real estate investing can be a lucrative and rewarding venture, but it is not without its risks. Some of the risks that investors should be aware of include:

  1. Market risk: The value of real estate can be affected by changes in the market, such as changes in interest rates or the economy.
  2. Tenant risk: If a property is being rented out, there is always the risk that the tenant may not pay rent or may damage the property.
  3. Repair and maintenance costs: As a property owner, you will be responsible for any necessary repairs or maintenance, which can be costly.
  4. Leverage risk: If you use leverage, such as a mortgage, to purchase a property, you may be at risk of losing the property if you are unable to make your payments.

In order to be successful in real estate investing, it is important to do your research and due diligence, have a solid investment plan, and be prepared to handle any challenges that may arise. It may also be helpful to work with a real estate professional or financial advisor to help you navigate the process.

Some common ways people make money:

  1. Renting properties: This involves purchasing a property and then renting it out to tenants. The income generated from the rent can be used to cover the mortgage and other expenses associated with owning the property, and any excess can be collected as profit.
  2. Flipping properties: This involves buying a property, renovating it, and then selling it for a profit. This can be a lucrative strategy, but it requires a significant amount of time and resources to find and fix up the property.
  3. Wholesaling properties: This involves finding a property that is being sold at a discounted price, and then finding a buyer who is willing to pay a higher price for the property. The investor then earns the difference between the two prices as profit.
  4. Rent-to-own properties: This involves entering into a contract with a tenant where the tenant agrees to rent the property for a certain period of time, with the option to purchase the property at a later date.
  5. Selling property management services: Some investors choose to specialize in managing properties for other owners. They may charge a percentage of the rent collected or a flat fee for their services.
  6. Developing properties: This involves purchasing land and building new structures, such as houses or apartment buildings, which can then be sold or rented out.
  7. Investing in real estate investment trusts (REITs): REITs are companies that own and operate income-generating real estate properties, and they offer investors the opportunity to own a piece of the company and receive a share of the income generated by the properties.

Real estate investing can be a lucrative way to generate income and build wealth, but it is important to do your research and understand the risks involved before getting started. That said, buy and hold produces slightly better than historical inflation averages and should not be considered an investment as such.

It is difficult to provide an accurate average annual increase in property values over the last 40 years, as it can vary significantly depending on a number of factors such as location, type of property, and economic conditions. However, the value of real estate tends to increase over time due to factors such as population growth, economic growth, and inflation. However, the rate of increase can vary widely, and there have been periods where property values have declined.

In the United States, the National Association of Realtors (NAR) publishes data on the median sales price of existing homes. According to NAR data, the median sales price of existing homes in the United States increased from around $42,000 in 1981 to around $310,000 in 2021, representing an average annual increase of about 4.4%. However, it is important to note that this is just one measure of property values, and the actual increase in values can vary depending on a number of factors.

It is also worth noting that the rate of increase in property values can vary significantly depending on the location. Some areas may experience faster appreciation than others due to factors such as demand, supply, and local economic conditions.

By contrast, the S&P 500 is a stock market index that tracks the performance of 500 large-cap publicly traded companies in the United States. The index is widely used as a benchmark for the overall performance of the stock market.

According to data from the S&P Dow Jones Indices, the average annual return of the S&P 500 from 1981 to 2021 was approximately 9.8%. This means that if you invested $100 in the S&P 500 in 1981 and held onto your investment until 2021, it would be worth approximately $6,400, assuming a 9.8% average annual return. So, if you invested $42,000 instead of buying that house back in 1981, you’d have $2.68 million.

Customer Journey

Customer Journey Jonathan Poland

A customer journey is the experience that a customer has with a company or brand over time, from their perspective. It involves analyzing the interactions, touchpoints, and stages that a customer goes through when engaging with a company, in order to identify areas for improvement and opportunities to optimize the customer experience.

The customer journey is typically divided into stages, which can include elements such as awareness, discovery, purchase, experience, and participation. These stages represent the different phases that a customer goes through when interacting with a company or brand, and can include touchpoints such as visiting a website, interacting with customer service, or using a product or service.

By analyzing the customer journey, organizations can identify gaps, problems, and areas that are working well, and use this information to optimize their customer experience and drive business growth. This can involve identifying opportunities to streamline processes, improve communication, or enhance the overall value that a company or brand provides to its customers.

Awareness

Awareness is the initial process of a customer becoming familiar with your brand and what you sell. This can involve elements such as recognition of your brand name, understanding of your product offerings, or a relationship with a salesperson. Awareness is crucial for marketing and sales, as customers are often hesitant to purchase from brands or products that they are not familiar with. On the other hand, customers may be more likely to make a purchase if they have a preexisting relationship with a salesperson.

Visual Symbols
Seeing a visual symbol such as a brand logo.

Brand Name
Hearing or seeing a brand name. For example, attending an event sponsored by a brand where a brand name is mentioned several times.

Environments
Stepping into a physical environment such as a shop or a digital environment such as a website. At this stage the visit is curiosity driven because the customer knows little about you. For example, a customer who clicks on an ad to arrive at the web page of a brand that is new to them.

Product Sightings
A customer sees someone with the product. For example, a fashion enthusiast sees a woman wearing interesting boots and wonders where she bought them.

Word of Mouth
Hearing about a brand, product or person from friends.

Media
Media mentions or coverage of a brand, product or service. This can include negative coverage.

Promotion
Promotions such as viewing an advertisement or a product placement in a film.

Search
Encountering the brand or product in a search. At the awareness stage, customers aren’t searching for the brand directly. For example, searching for “camping gear” on an website.

Networking
Networking such as talking to an employee or salesperson from a firm at an industry event.

Discovery

The discovery stage of the customer journey occurs when a customer becomes actively interested in your brand or products, either out of curiosity or as part of the research process for making a purchase.

Visits
Visiting a digital or physical location such as a web site, shop, showroom or booth at an event. At the discovery stage, visits aren’t random but purpose driven.

Reviews
Reading product reviews. This can include reviews perceived as positive, negative or fake.

Social Media
Reading community posted content about the brand and product. This includes the possibility of interacting such as asking a question on a forum or product review site.

Media Consumption
Viewing media related to your brand such as promotional videos for a product.

Information Consumption
Reading information such as product specifications.

Looking at the Product
Viewing visuals of the product such as a look book on a fashion site.

Touching the Product
A moment of truth when the customer actually gets your product in their hands. For example, a customer who sits in your vehicle for the the first time in a showroom.

Contact
Contacting your firm to make an inquiry.

Conversion
Taking some positive action as the result of a marketing effort. For example, filling out a form to receive a free trial.

Meetings
Meetings with sales and other representatives of your firm.

Asking Questions
Asking questions about the product to your staff or others such as friends.

Statement of Need
Providing sales with information about your needs. For example, a customer who gives a salesperson of home heating, ventilation and cooling systems information about their home.

Purchase

The process of making a purchase can involve a customer repeatedly buying from you, indicating loyalty, or it can involve a more in-depth process of comparison with competitors before making a decision to buy.

Information Overload
The experience of finding information too complex. For example, being overloaded with the technical terms, features and diverse opinions found in product reviews.

Ambiguity
Things the customer would like to know but doesn’t. Some customers will avoid ambiguity and will purchase a product that provides answers such as detailed specifications. For example, a customer who rules out a sleeping bag because the product information doesn’t state if it is for cold or warm weather.

Decision Fatigue
A state of tiredness from spending too much effort thinking about a decision. A customer in this state may make poor decisions or buy a product that makes things simple for them. For example, a customer who wants to try a new shampoo but after reading a few confusing labels goes back to his regular shampoo.

Relationship Building
The process of building relationships with salespeople and other employees. For example, a customer who avoids one shop because staff were unfriendly to her once and often goes to a shop where staff know her face and are nice.

Samples & Trials
Obtaining a free sample or a trial subscription.

Price Comparison
Comparing prices between different products and options.

Customization
Customizing the product. For example, a bicycle that is customized whereby customers begin their shopping experience by selecting a color. This may make the customer feel committed and interested.

Quality Comparison
Comparing the quality between two products or options. Quality is anything the customer perceives as quality.

Features & Functions
Comparing the features and functions of different products and options.

Quotes
Asking for a price quote when the price is negotiable.

Negotiation
Negotiation of price and terms. This can involve hundreds of complex interactions such as a customer who uses a bogey as a negotiation tacit.

Coupons
Looking for discounts and coupons or waiting for a sale.

Decision Making
The process the customer goes through to make the purchase decision.

Decision Justification
Identifying reasons that the purchase is smart. For example, a customer who buys an overpriced organic coffee because 5% of proceeds are donated to a charity that sounds worthy.

Product Selection
Selecting the product that you want to buy. For example, finding the size and color combination you require.

Shopping Car
Interactions with a shopping cart such as adding items, removing items, applying discounts, viewing shipping charges and tax.

Closing
Saying yes to a salesperson to close a deal.

Purchase
Making a purchase that doesn’t involve negotiation such as a digital purchase.

Purchase Confirmation
The process of receiving a purchase confirmation and reviewing it.

Buyer’s Remorse
Regretting a purchase. This can happen almost immediately for a variety of reasons. For example, a customer who orders a Christmas cake but then remembers they didn’t check if the ingredients on the label were healthy.

Rebuy
An automatic or effortless repurchase of something you have purchased many times such as a consumer who purchases the same coffee supplies every week.

Reevaluation
A reevaluation of a product you regularly rebuy. For example, a customer who wants to make a change to organic coffee but isn’t sure.

Experience

The end-to-end customer experience encompasses all aspects of using your products and services, including interactions with the product itself (which can be influenced by factors such as design, quality, and usability) and interactions with services, people, and environments. The customer experience may also be affected by the brand culture that develops around your offerings, which may be beyond your control.

Service Delivery
Interactions related to your fulfillment of a service. For example, an ecommerce company that delivers packages on time.

Unboxing
The experience of receiving and unboxing the product. For example, electronics in a cardboard box that can be opened effortlessly as opposed to encased in hard plastic that is impossible to open without heavy duty scissors.

Learnability
How easy the product or service is to learn. For example, a mobile device that feels intuitive from the start.

Stability
How much things change such as a mobile device that automatically updates its software and adds new apps you don’t want.

Usability
How pleasing and productive a user interface is to use. For example, a touch screen that often doesn’t recognize inputs versus one that does.

Performance
The performance of a product or service such as fast software or a slow bus.

Safety
Safety related experience such as a lawnmower that doesn’t spit rocks at you.

Look & Feel
The look and feel of products and services. For example, a dessert with a refined look such that it is almost a shame to eat it.

Environments
The experience of physical and digital environments such as a hotel lobby or a game world.

Sensory Experience
Experiences related to the senses such as vision, taste, smell, sound, touch and sensation. For example, a dessert that feels tingly on the tongue.

Customer Service
Service interactions with your staff. A single poor experience in this area can completely turn a customer against your brand.

Convenience
Products and services that are easy. For example, a customer steps into a grocery store to find dinner and quickly finds a precooked meal to their tastes.

Comfort
A sense of well-being created by your products and services. For example, a hotel lobby that feels tranquil with pleasant scenes, sounds and smells.

Peak Experiences
Experiences that customers view as rewarding, deeply meaningful or thrilling. For example, a film that a customer finds to be emotionally moving.

Billing
The experience of receiving, reviewing and paying bills. For example, a telecom bill with an incomprehensible list of discounts, subscription fees and usage charges.

Problems
Situations that customers view as a problem. For example, a customer of a hotel who notices a smell in the air in their room.

Problem Resolution
The process of resolving a problem. For example, a service that quickly takes care of problems without customer involvement versus a problem that demands the customer’s time and causes them stress.

Participation

Participation refers to when a customer actively engages in activities that benefit your business. Many companies encourage customer participation as it can foster a sense of loyalty and allow customers to feel like they are contributing to the growth of the brand. Participation can also serve as a source of promotion and can help to improve your brand culture and product offerings.

Reviews
Posting reviews of your products and services.

Recommendations
Recommendations by word of mouth such as social media.

Media Mentions
Talking about you in media or social media. This can help to build brand awareness.

Answering Questions
Answering questions such as how to do things with your products. For example, a blogger who helps people to configure and customize their mobile devices.

Solve Problems
Solving problems such as a customer who identifies a workaround to disable a feature some customers find annoying.

Media Creation
A customer who creates content featuring your product such as an unboxing video.

Feedback
Contacting you with feedback. For example, identifying a problem with your products such as a software bug. This indicates a customer cares about the product enough to want a fix and is a sign of high loyalty and commitment.

Product Extensions
Customers who extend the functionality of your products such as game enthusiast who creates a popular mod.

Design
Some firms engage customers in the design of their products with techniques such as lead users and design competitions.

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Penetration Pricing Jonathan Poland

Penetration Pricing

Penetration pricing is a pricing strategy in which a company initially sets a low price for its products or services…

Comparative Risk Jonathan Poland

Comparative Risk

Comparative risk is a method of evaluating and comparing the potential impacts and likelihood of different risks. It is used…

Sales Management Jonathan Poland

Sales Management

Sales management is the process of overseeing and directing an organization’s sales team. It involves setting sales goals, analyzing data,…

Collective Intelligence Jonathan Poland

Collective Intelligence

Collective intelligence refers to the ability of a group to solve problems, make decisions, and generate new ideas more effectively…

Risk Management Process Jonathan Poland

Risk Management Process

Risk management is the practice of identifying and mitigating potential risks that could result in financial losses or other negative…

Reputational Risk Jonathan Poland

Reputational Risk

Reputational risk refers to the potential for damage to an organization’s reputation as a result of its actions or inactions.…

Risk Awareness Jonathan Poland

Risk Awareness

Risk awareness refers to the extent to which people or organizations are aware of risks and the strategies in place…

Relative Advantage Jonathan Poland

Relative Advantage

Relative advantage refers to the extent to which a company’s product, service, or offering is superior to those of its…

Procurement Jonathan Poland

Procurement

Procurement is the process of acquiring goods or services from external vendors or suppliers. It is an essential part of…