In business, as in life, there’s a universal constant. One thing we can always count on, in spite of all other variables. That constant is change.
The modern demand chain proclaims this truth louder than ever. The pace of innovation was originally predicted to happen on a much slower timeline. But when 2020 hit, McKinsey found that in the initial months of the pandemic, companies accelerated their digital portfolios by seven years.
Prior to 2020, less than a third of all sales were in digital channels, according to the Salesforce State of Commerce Report. There were ecommerce innovators out there of course (Amazon was clearly a giant well before 2020), but the progress overall was limited by traditional supply chain structures built for a bygone era.
So when change went into hyperdrive, some companies struggled to catch up or chose to hope for the best.
But those who fared well—even thrived—did so because they started prioritizing change, embracing innovation, and most crucially, optimizing for the customer.
The Value Chasm
These same outliers, the innovators, knew that the pandemic—and the subsequent acceleration of digital commerce—had suddenly widened the gap between company and customer into an unavoidable chasm, one that can no longer be sidestepped.
No one foresaw the monumental task of fighting frequent disruptions while simultaneously keeping up with the rapidly evolving needs of a customer-first revolution that isn’t going away.
Traditional systems and legacy solutions typically functioned in a linear path—from design to production to shipment.
But linear processes were already outdated prior to 2020. And they were inevitably detrimental to product value.
Linear processes provide less data visibility across the organization, resulting in products prone to issues and errors. Consider the customer who waited on a product release, and upon finally receiving it (likely after multiple delays), realizes it doesn’t work the way it’s supposed to.
Inevitably, you'll erode customer satisfaction, damage brand loyalty, and shed revenue.
Value Chains are the New Supply Chains
We need to ditch the linear and focus on closing the loop—that big overarching continuous process of innovation, production, delivery, and support—the collective effort of your value chain.
The one that connects your consumer to your supply chain by connecting your commercialization team directly to your product team, end-to-end. From concept to customer—and customer to concept—and around again and again.
A linear process was fine when brick-and-mortar commerce ruled the market. When meeting demand typically meant delivering a specific product at a specific release date.
The new market demand goes far beyond these basic targets. Now, it revolves around the “whole product”—an ongoing product experience with continuous customer touch points, well before and long after purchase and delivery.
We’re talking customer communities, tutorials, and interactive digital experiences. We’re talking subscription-based product models and automatic upgrades. We’re talking a constant and continuous feedback loop.
According to a poll conducted by Propel:
The value chain must therefore bring together all teams that touch a product: from design to quality to development to marketing to sales. And most importantly, unlike the linear step which ends at delivery, it must encompass the customer.
After all who knows better what would make a product more valuable to the customer, than the customers themselves?
Product Value Lives in the Process
Bottom line? Customers know what they want, and they have immediate access to the entire market landscape to find the best option.
The race is on for product companies to attain the holy grail: higher-value products with superior customer experiences before their competitors.
This requires a new approach that brings every team together under a single source of truth, where visibility and collaboration are fundamental, and product and commercial teams work in tandem to get their products to market faster than competitors.
This new approach—this entirely new category—is based on collaboration. It brings teams together, incorporates customer feedback, and enhances product experiences.
It takes the line from those old linear processes, circles it back around, and closes the loop to form your value chain.
This is what’s called product value management (PVM).
The new ultimate guide to product value management explains how PVM is the natural evolution of the product lifecycle strategy, developed to meet the needs of today’s market and to keep pace with tomorrow’s.