Creating Value: It’s All About Doing Things Better

If you’re not creating value for your customers, what good are you really?

The dictionary definition of “value creation” is “any process that creates outputs that are more valuable than its inputs.”

As marketers, we could add to this definition:
“Providing products and services that customers find consistently useful.” Doing things better.

“The pandemic and its months of shuttered shops, isolation, confinement, and social distancing have given everyone — marketers and consumers alike — more than enough time to start thinking about what ‘better’ is,” points out Amanda Hellman, Managing Director of Fred & Farid New York. 2020 has been the year of the “cosmic reset,” the year our priorities shifted. “The issue has become not only value for money but identifying what values are worth spending money on,” says Peter Jacobs, Business Director of Fred & Farid Los Angeles. Hence, value creation is more important than ever.

So what is value creation today and how can we as marketers bring this to our customers, and, in so doing, ensure our own future?

It’s About Creative Thinking

Let’s look back 100+ years to the dawn of the automobile age. Karl Benz may have invented the car, but it was Henry Ford who created the assembly line. Value creation and innovation go beyond inventing new technology. Value creation in the future will derive from the economies of creativity.

Another example is Marriott’s business model shift in the 1990s. Simply put, Marriott divested itself of virtually all of its hotel properties and went from being a hotel-owning company to a hotel-managing company. Fixed costs went way down, and Marriott focused on providing management and customer service. The shift shocked the industry but was quickly followed by other lodging companies. “This move was a kind of precursor to what
tech companies do today — providing services such as car ridesharing or freelance personnel,” says Colin Nagy, Head of Strategy and Partner at Fred & Farid New York. “And while these changes are disruptive, they accrue straight to a company’s bottom line.”

Indeed, in marketing terms, value creation often hinges on creating and providing better customer service experience and engagement, or better solutions through the integration of ideas across business processes. It’s about raising service to a more personalized level.
“This is what marketing can do best,” says Severine Autret, Managing Director and Partner at Fred & Farid Paris. “We create customer relationships, which can differentiate between commoditized products in these days of individualization when the intangible dimension (i.e., service) is becoming more important than the tangible dimension (i.e., products).”

Management guru Peter Drucker, writing long before the creation of social media and AI made statistical analysis of customer habits possible, summed up the marketing value-add: “The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself.” There are several benefits that accrue from this achievement. “True value creation reduces competition while saving time and energy because you know — and you own — your niche,” says Nathan Smith, Business Director at Fred & Farid Los Angeles.

What’s so Different?

Marketers can create value for their clients by helping them identify what differentiates them, and then helping them to amplify it. As Microsoft CEO Satya Nadella says, Microsoft’s value add lies in “empowering its customers to achieve more.” It’s not just about better tracking, but a better understanding of the customer to create a relationship strategy that adds value to the brand.

Such things might include after-purchase service, loyalty programs, or returns policies. “These are differentiators that add value. They stem directly from knowing the customer and what he or she wants,” says Paul Lin, Business Director at Fred & Farid Shanghai. “This kind of strategy helps ensure customer loyalty, and that translates to a better return on investments and profitability.”

Charting this correlation between intangible marketing strategy and tangible business results is a relatively new phenomenon, and it’s come about thanks to better data collection and interpretation. “Marketing’s major assets are creativity and insights that result in Intellectual property, partnerships, and sometimes distribution networks” says Olivier Lefebvre, President and Partner at Fred & Farid Paris.

Finally, value creation is not something you do once for a customer and then walk away. Eventually, there will be competition beyond mere copy-catting. The product or service’s lifecycle will need a makeover.

Stay on Your Toes

Looking back to Henry Ford, it wasn’t long before other carmakers figured customers would want more than one model of car during their lifetime. The luster of the Model T wore off, replaced by a bevy of other models from other carmakers that followed the customer’s lifespan and related lifestyle: growing families, higher incomes, retirement. “Product cycles today are shorter than ever,” Chelsea Steiger, Creative Director at Fred & Farid Los Angeles, reminds us. “And businesses have less time to recoup product development costs. It’s up to marketers to be fast and be right with our insights and Strategies.”

What is Fred & Farid ? We are a global creative agency, a creative partner for CMOs and brands.

What does Fred & Farid do for brands ? We do brand strategy, branding, content, social activation… with taste.

Where is Fred & Farid based ? We are based in Los Angeles, New York, Paris, Shanghai.

Who is leading Fred & Farid ? The group was founded by creative team “Fred & Farid”.

What is the website of Fred & Farid ? http://fredfarid.com

Where can I see the work of Fred & Farid? http://fredfarid.com/work

What is the philosophy of Fred & Farid? Think with your heart.

How can I contact Fred & Farid ? newbusiness@fredfarid.com / pressrelations@fredfarid.com / humanressources@fredfarid.com