The Value Prop Parallax: Understanding Consumers’ Values in a Digital Environment


3M has so much more to offer than just Post-it notes.

At General Assembly, we partner with the world’s greatest companies to assess and train their employees in today’s most in-demand skills. While building in-person and online training programs for a fifth of the Fortune 500, we have conducted consultative working sessions and stakeholder interviews with hundreds of teams in a variety of industries. These sessions provide incredible insights into the hurdles that incumbents face as consumer behavior changes.

According to Mike Vale, an executive at 3M, a 114-year-old, Minnesota-based industrials company, “the single biggest change in our customer set today is the ability to integrate online, the ability to digitize a model, to have a seamless experience for the consumer in the store.” It’s a statement that represents much of what we see in our work at GA.

So what is the No. 1 problem our consumer clients are facing today? And how can they solve it?

“These young digital companies are going to eat our lunch.”

Like Vale, our clients have witnessed a fundamental shift in consumer behavior over the past several years. Recently, the CMO of an iconic consumer packaged goods (CPG) company kicked off one of our GA training programs with a warning: “These young digital companies are going to eat our lunch.” The analogy was a terrifying metaphor for the precarious position of today’s titans of industry.

A salient public example of this lunch-eating was the rapid ascent of Dollar Shave Club, which underscored the value of successfully “digitizing” a business model. That value, at least to Unilever, was $1 billion. (For more about CPG innovation strategy, I recommend reading my colleague Claire Collery’s fantastic “What Seizing The Now Looks Like at a CPG Giant”).

Here’s what we’ve discovered from conversations with company leaders, product managers and marketing teams: “Disruption” today doesn’t require the creation of a new market as much as it requires tactful entry into the experiential space that digital channels have created for consumers.

During Dollar Shave Club’s meteoric rise, people were still buying razors and seeing plenty of Gillette and Schick TV spots — however, their shopping experience and personalized relationship with those brands left much to be desired. Much to the chagrin of leading blade-runners like P&G, Dollar Shave Club used digital channels and an eCommerce subscription model to deliver men from the discomfort of a stagnant and unpleasant shopping experience.

Introducing the Value Prop Parallax

I’d like to coin a new term — the Value Prop Parallax — to label the discrepancy between a business’s perception of its value proposition and consumers’ understanding of that value in a digital environment.

Parallax is a displacement or difference in the apparent position of an object viewed along two different lines of sight, and is measured by the angle between those two lines.

The holistic customer experience is markedly different in today’s world than it was even five years ago. Thanks to the proliferation of data, the rise of CRM, the development of robust analytics tools, and a sudden accessibility to consumers around the world, brands should be able to more quickly and accurately update their branding and products to meet consumer expectations.

As these barriers to successful product development, iteration, and intimacy with consumers lower, there is increasing pressure on incumbents from new entrants, substitutes, and established rivals (I’m drawing here from Porter’s Five Forces Analysis, a framework for assessing competition within an industry, and the topic of a future post). Correcting the Value Prop Parallax requires that companies leverage every tool possible to keep up with agile entrants.

Ultimately, the Parallax impacts both B2C and B2B2C business models; capitalizing on the evolving customer decision journey and path-to-purchase journey is essential, whether or not the customer is the consumer.

In the face of this new strategic environment, GA believes that investing in the talent pipeline — a combination of metric-driven hiring and upskilling current employees — helps put the creaky wheels of intra-organizational adaptation in motion.

With a focus on the training piece of the puzzle, we’ve developed a conceptual framework for organizations that want to adapt:

1. Vocabulary: Develop enterprise-wide fluency.

Confidentially, companies with annual marketing spends in the hundreds of millions of dollars will often admit to us that they have “lost their literacy” in digital marketing. While they can enlist a cadre of digitally equipped talent (which GA also provides to its clients), businesses can’t hire this problem away entirely.

Our clients tell us again and again how digital Subject Matter Experts (SMEs) within the firm are overworked, over-consulted, and spread too thin to effectively enable organizational improvements.

To address this emerging need, our clients have found success by level-setting their marketing teams with a taxonomy of the current landscape and driving application through customized workshops concerning specific topics (e.g., SEO, social media, eCommerce strategy).

2. Skills: Map customer sentiment at every single touchpoint.

In a (Customer) Sentimental Mood

How can companies understand their value proposition without understanding where the perception of value originates? After getting their hands dirty with user research in one GA program, a team at a personal care company realized that while significant organizational resources had been put into the development of socially responsible products for millennials, the jury was out on millennials actually finding value in corporate social responsibility (CSR). The entire value proposition of these products needed to be re-evaluated before the final push to market, saving millions in marketing spend on a product-market fit mistake.

We have found that companies that employ even lightweight user research, persona development, and customer journey mapping techniques are often better equipped to adapt to the evolving landscape on an ongoing basis then even the best-resourced companies with deep benches of consumer insights specialists. The closer companies can get to their customer, the more money they will save that would have gone into underwhelming products.

3. Mindset: Create a welcome environment for digital product development.

Kotter’s 8-Step Change Model

A recent memorable conversation we had with a team at a pharmaceuticals company concerned their frustration at “developing digital products in a non-digital culture.” They are not alone: Many of our client leaders come to us for help encouraging their teams to stare into the abyss of change demanded by digital.

Nietzsche said, “If you look long enough into the abyss, the abyss stares back at you — you become the abyss.” These leaders know that, unlike Nietzsche’s abyss, you don’t have to look into the abyss of digital change in order for it to stare back and change you. Digital change will affect market leaders whether they are looking or not. (It’s no wonder that Nietzsche fans love the name Uber.)

According to John Kotter’s Change Model, leadership has a responsibility to embrace the urgency of this change and enable the organization to tackle it from within. Many of our client engagements focus on effecting that mindset to unlock subsequent investment in digital adaptation.

At GA, we are proud to say that we enable teams to develop and deploy these adaptation strategies to integrate their legacy business model into the digital world.

And our clients are proud to say that it costs a lot less than $1B to do it.