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Here are some examples of living an inside-out life versus an outside-in one: Outside-In: Writing thank you notes because people will talk if you don't. Inside-Out: Calling people to thank them, because you appreciate expressing gratitude in conversation. Outside-In: Working hard to convince your partner to marry you.
In the Business World
With the outside-in strategy, you first observe what the customer wants, then find and offer the solution. In the inside-out strategy, however, you first develop the product or service, then you create desire for it in customers.
With the outside-in strategy, you first observe what the customer wants, then find and offer the solution. In the inside-out strategy, however, you first develop the product or service, then you create desire for it in customers.
Both use the golden circle methodology, which defines if the strategy’s starting point will be the business’s product or service or the business’s purpose. Keep reading to learn more.
What’s the golden circle? How does it influence inside-out and outside-in strategies?
Before learning in detail what inside-out and outside-in strategies are, you should understand more about the golden circle, which is a methodology that guides business strategies.
The process is represented by a circle containing two smaller inner circles. Each represents one of three questions:
In the golden circle, the key is “why,” and your answer will determine your marketing strategy. This will enable you to cultivate long-term relationships with clients who connect to your business.
What’s an inside-out strategy?
The inside-out strategy is based on developing strengths and internal capabilities to move the business forward.
With this type of strategy, internal potential is the starting point for delivering value to clients, guided by providing what is best for the consumer.
A great example of a business that follows the inside-out strategy is Apple. Using the golden circle methodology, the first step is to answer “why” the business exists, as opposed to “what,” or in other words the product.
The result is a powerful beliefs system. Instead of saying that a business has a good product with nice design — to sell it with these words—, Apple starts from the circle’s center and puts its essence at the forefront.
This company has always been clear in saying its goal is to challenge the status quo and think different. The result is well-designed products that are simple to use with a user-friendly interface.
According to Simon Sinek, this logic makes people buy “because” Apple produces it, rather than “what” Apple produces.
We know that this strategy has brought a lot of success to Apple, but it doesn’t necessarily mean an outside-in approach isn’t effective.
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What’s an outside-in strategy?
An outside-in strategy observes the market, gets to know consumers first, and then thinks of offering what consumers really need.
These strategies move forward from the back; in other words, they observe what clients want before finding the solution.
Best Buy adopted an outside-in strategy when computer producers started to cut costs and services. The business analyzed the market changes and created services for clients, looking for innovation and spaces exclusively for customer attention in their stores.
This strategy brought great competitive advantages to Best Buy, and they gained market relevance.
General Motors is another example of a business that follows this strategy. After the 2008 financial crisis, the company was restructured to focus on the customer. All areas of the business were designed in accordance with what consumers reported.
This way, General Motors created a culture totally focused on clients and had great results with it.
Toyota, in contrast, adopted an inside-out strategy to define its internal objectives and surpass General Motors. The result was a certain loss of quality, and, consequently, some customers as well.
Both inside-out and outside-in strategies have their upsides and downsides...
What’s the role of automation in inside-out and outside-in strategies?
With an outside-in strategy, the customer is in front and center. However, when trying to optimize processes, the goal tends to be to spend less and produce more, which refers more to an inside-out approach.
To strike the balance, we can use business process automation. This way, you can optimize your process management with a focus on total client satisfaction.
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