Project Management as a Customer Focused Product

  • Looking for a point of difference in a crowded, highly competitive market?
  • Struggling to please customers, or worse, falling out with established customers?
  • Maybe you’re trying to compete at the commodity level.

In marketing terms, products can be considered at three different levels, core product, extended product and augmented product.  A simple example would be air travel.

In this case the core product is simply long distance travel; this is the core customer need that the product satisfies and at this level a commodity.

Project Management

The next level is the extended product, those things that are necessary to support the core product such as booking systems, inflight catering etc.  This is also satisfying customer needs but at a different level.

Project Management

The final level is the augmented product, attributes that go beyond basic product requirements and satisfy higher customer needs.  These would include  frequent flyer schemes, airport lounges,  packaged holidays.

what is augmented product

The key point is, that successful products are carefully designed at all levels to match customer needs.

Bringing this altogether we have a completely designed product.

Augmented Product compare extended product

So how does this apply to a project delivery company?   Well it’s about fully understanding your customers’ needs at all levels, and deliberately designing products to fulfil those needs.  Let’s take for example a conveyor manufacturer.

diagram of core product

At the next level we are dealing with extended customer needs, those things that are necessary to support the installation and operation of the core product.  At this level there is greater opportunity to differentiate yourself from the rest of the pack  through project management systems, after sales service etc. that add extra value to your clients

Diagram of Extended Product

The highest level provides the  greatest opportunity to differentiate, opportunities to completely stand out from the crowd and delight your customers.  Why is this so important?  Well this provides the foundation for enduring customer relationships, customer retention  and repeat work, more than often at reasonable margin.  Competing at this level is the basis for success.

how to manage project risk

Bringing it all together we have carefully designed products that deliberately seek to address customer needs at all levels.

augmented product diagram

Transparency, empathy, responsiveness etc. are designed into the product through systems and processes.  For example, transparency, ownership and accountability can be achieved through effective project communications and regular (weekly ) reporting of issues, risks, progress and lookaheads.   This in turn gives your customer confidence that project risk is being managed.

Responsiveness can be built into estimating systems that can quickly handle changes to proposed scope or pricing of alternative options.  This in turn provides your customer with flexibility and nimbleness.

These are all qualities that competitors may not be able to provide (or don’t even think of providing!) and that establish a point of difference.  They position you to compete not at the commodity level, but at a level that addresses customer pain points.

Finally, they  add value for your customer.  For example, your $200,000 project may represent $20,000,000 of risk to your client in terms of lost production or contractual exposure.

 

At the core level the fundamental customer need is material handling.  Product design is governed by physical attributes such as throughput rates, speed etc.  At this level we are basically dealing with a commodity, all competitors are dealing with common parameters and there is very little opportunity to differentiate yourself.