How to Elevate Your Portfolio by Elevating the Right Element
If you could change one thing about yourself, what would it be? Your appearance? Perhaps your career? Something related to your health?
If you’re like most people, you would pick the one thing that would dramatically improve your situation, that would tell the world that you’re on top of your game and that you’re living the best version of yourself. Changing that one thing about yourself seems to lift up everything else about you.
Let’s apply that same concept to what you do at work. If you could upgrade one thing about your business, what would it be?
In my new book, Adding Prestige to Your Portfolio, I describe how to do exactly that: upgrade a part of your portfolio as a way to lift everything else along with it.
Using this prestige strategy will help you build muscle, build competency and fortify those parts of your business that are most essential to succeed. Think of it as future-proofing your business not by scaling back, but instead by beefing up your competitiveness.
Whether you’re using an offensive strategy to get more business, or playing defense to protect what you have, adding prestige to some part of the organization to bring it to a higher state of capability will enhance financial performance.
I offer a better way to think about adding prestige: a training and development exercise for the whole company revolving around a live case study. You’re challenging the organization to take one selected product or service to an extreme state.
Like any corporate training exercise, imagine the diagnostic value to your organization by going through this exercise. You’ll learn quite a bit about your people: their knowledge, skills, motivations, collaborative nature, their leadership. You’ll see who has the ability to step up to the challenge and deliver results.
You’ll learn more about your internal processes and where you might need improvement. Every organization runs on processes of many kinds: financial, operational, staffing, planning, compliance and so on. A prestige challenge will put these processes to the test and let you see which ones are slowing the organization down.
To select the right product or service to transform to prestige, you need to pick a part of your overall business that you want to upgrade. The good news is you have a lot of choices. Virtually any moving part of your business model could be selected as a candidate for this exercise.
Adding prestige to your portfolio begins with that simple question. For those selling just one product or service, the answer is obvious. But for those with many product families and a wide variety of offerings within those families, the answer is less clear.
Ask yourself which product or service in your portfolio would deliver the best payoff if you were to create a luxury version of it. Let’s go through your options:
1. Develop new core competencies
Which product or service will push your company to achieve new skills or strengthen existing ones? Which choice will force employees to drive new knowledge into the company that will enable it to compete?
Delivering luxury goods or services means you must be skillful at creating a unique design, sourcing the best ingredients, manufacturing at the highest levels of quality, executing value pricing, excelling at marketing communications and delivering stellar customer service.
Producing luxury will push your employees in every aspect of the business, but the trick is to pick a product or service to transform that will challenge employees while staying within their capabilities.
2. Enhance recruiting and retention
Which option would give you the best story to attract and retain talent? Think of the people you want to recruit and where you recruit them from. If you’re recruiting on college campuses, what new object in your portfolio will best appeal to the younger generation?
If you’re recruiting people away from other companies, what prestige product or service in your portfolio would make the most attractive lure for a potential employee to change teams? What cool project could you assign to your existing high-potential employees so they don’t want to leave?
3. Energize your product and service development
Which product or service will revitalize your portfolio and delivery methods? Having a marquee version of your product or service acts as a brand halo over the rest of the portfolio.
4. Sharpen your pricing strategy
Which option will clarify the value story of your portfolio? Consumers question price when they can’t connect it to value. They either don’t understand the value or they don’t believe it.
A prestige version of your product can help communicate all the options and sources of value available and how they ladder up to the price. Even if customers cannot afford the prestige version of your product or service, they will better understand the value in the versions that they can afford.
5. Strengthen your supply chain and distribution
Which option will revitalize and challenge partners in your supply chain to improve and upgrade their services? Adding a prestige version of your product or service gives you leverage with your distribution channel members. They will want to sell it exclusively or with your other products. That’s when you can demand more from them.
6. Expand markets and grow sales
Which product or service will gain more market share in existing markets or allow you to reach new segments? Business is about growth and competitiveness. Adding prestige to your portfolio gives you more competitive weapons to fend off competition and drive growth.
These are a lot of criteria to consider. And you might have others to add to the list. So, let’s take things one step at a time.
First, decide which criteria are the most important for you. Chances are two or three factors are the real drivers of your business. Use those and avoid using a long list of criteria because doing so is both frustrating and unnecessary. A small subset of the most important ones will do the job well.
Develop a weighing scheme for the criteria and solicit input from your colleagues and leaders. For example, let’s imagine you are in the business of making personal watercraft (PWCs) and accessories, like Yamaha and Kawasaki. Based on input from others, you decide that the criteria that are most important to business success are: product development, supply chain and market expansion. Therefore, your focus will be on selecting a product or service in your portfolio that best satisfies these three criteria.
Let’s now assume you and your colleagues are aligned to which products or services you want to put through the creative luxury process. That process really consists of four subprocesses:
- Transform the product or service.
- Transform the shopping/buying experience.
- Transform the usage experience.
- Transform the post-purchase experience.
You should recognize right away that simply upgrading your product or service is not enough. By doing so, you would be failing to take advantage of all that luxury has to offer.
You want to go well beyond that and create a unique and distinctive experience through the entire customer journey: shopping, buying, using and advocacy. That’s where you will get the full benefit.