Innovation, Reinvention and Reconfiguration

Delivering Meaningful Member Value Outside Product Sales: a Fresh Idea


Chances are that, like the rest of us, you are constantly racking your brain to figure out what new value to add to your services/products to be relevant to your customers.

Getting and holding on to customers is harder than ever in today’s crowded and changeable marketplace and its glutted, impatient and unpredictable consumers. The automatic response is usually more programs, features, benefits, variety, marketing efforts, etc.   These solutions, however, usually ratchet up costs while diminishing profitability.  Maybe we are thinking of value all wrong – looking at customers through a narrow lens, only in terms of their product needs. What if we viewed them as whole, dynamic human beings and understood the full spectrum of what created value for them? This is what Bob Weidner and the Metals Service Center Institute did when he became CEO in 2001.

My new book and a previous article detail how Weidner turned around an association caught in a mire of irrelevance, dysfunction, and economic decline, through large-scale transformations of the business model and market positioning.  Yet the foundation of the change was a shift of orientation from products to people and solutions. Weidner wanted his organization to think from the customer’s perspective. Instead of rushing to create new programs or plans, his first action as the new CEO was to travel the country, visiting and interviewing executives in client companies to understand their perspective on the world and identify problems stood in the way of their success.

By understanding member companies in terms of the people in them and the communities they lived in, Weidner uncovered multiple, often nuanced, sources of value beyond product needs.

One of the many initiatives that emerged was MSCI’s scholarship program granting scholarships to the children of employees in member companies.  This program, it was decided, would be managed and administered by chapters.  Chapters would fundraise locally to establish a scholarship fund. MSCI would match the money they raised dollar for dollar up to $10,000.

This program has been a great success. Beyond program attendance and sales, it has engaged and created value for multiple stakeholders.  In essence, it has engaged and linked formerly independent, isolated stakeholders into a collaborative, self-sustaining value network in which they generate value for each other.

Employees are deeply grateful that their children have this opportunity. As the years go by and the number of scholarship recipients grows, the association’s impact on the community and value to stakeholders continue to increase exponentially.  Since its launch in 2004, 4 million dollars have been awarded to finalists, benefitting 2,000 families.Most of the graduates return to work in their communities and many become employed by the member companies.  MSCI’s scholarship program is now part of the fabric of the community and a contributor to the success of its young people.

Employers are delighted. The association has deposited on their lap an unexpected opportunity to look good to their employees.  What greater value can you offer member companies than help to develop grateful, engaged employees and boost their workforce pipeline?

Chapters, whose relationship with the association had been problematic, have recovered a sense of purpose and taken on a new role as partners with the association.  Chapters are not merely passive administrators. They put together a scholarship committee; create criteria, review applications and select scholarship recipients.  Instead of struggling to fill classrooms and comply with the association’s standards for attendance,  marketing,  governance and finances, they get to develop engagement strategies for the employees of member companies, deepen relationships with these companies; rally community support for a worthy cause, develop criteria, make funding decisions and experience the joy and gratitude of the award recipients and their families.  I heard that people feel so rewarded that they fight to stay on at scholarship committees.

Instead of just pushing its own products and services to its customers, MSCI created greater value by helping its customers provide value to their employees and their families.

Helping customers shine and succeed outside their business transactions with the association can bring greater business and financial benefits than marketing campaigns or direct sales of events and programs.  For example, since the scholarship program started, community and corporate engagement have greatly increased and attendance on the chapter level has soared. All in all Weidner’s people-centered strategy paid off.

In 2001, the association’s revenue was $4.5 million, with a $2 million net operating loss.  By 2008, MSCI’s revenue had reached an all-time high of $9.3 million when its industry was shrinking.

Do your members struggle holding on to their own customers, retaining employees, establishing a reputation as thought leaders in their industries or identifying reliable suppliers? Serving the customer’s customer or employee, strengthening the supply chain in the industry or crafting specific opportunities for customers to shine have all been enormous sources of customer value to many innovative organizations. The trick is to think beyond product sales to customers’ most important relationships to help facilitate success and craft solutions.