Episode #364: Interview with Marco Bertini - The End's Game

What is The Ends Game? It’s a play on words, sure. But it’s more importantly the claim that thinking about where you generate revenue from should be less about the means (your costs) and more about the ends (value to the customer).

Before we get to more show notes, here is a brief background on Marco Bertini:
Marco is a professor of marketing at Esade and a visiting professor in the marketing unit at Harvard Business School. He is also a senior advisor to the marketing, sales, and pricing practice at the Boston Consulting Group. He received his doctorate from Harvard Business School, and previously served on the faculty at London Business School.

He is the co-author of the book The Ends Game: How Smart Companies Stop Selling Products and Start Delivering Value (MIT Press), which explores how modern technology stimulates accountability, challenging organizations to succeed from the quality of the outcomes they deliver rather than the offerings they bring to market.

Now let’s get to the show notes:

  • The main thrust behind The Ends Game by Marco Bertini is: How often and HOW do our customers use our solution?

  • An economist would say that you need three things to be successful with your product/service: 1) access is first, 2) consumption is second, 3) performance (upon consumption) is third. Without these three things the customer bears too much risk.

    • Let’s start with access: Financial access (I cannot afford this); Physical access (availability)

    • Then we move to consumption issues (which are easier): Do I have this product in my house and do I actually use it?

    • Lastly, we have performance which is pretty straightforward: Does it do what I want it to do?

  • The classic belief about price is “How much should we charge?” What we seldom ask is more fundamental which is, “What are we charging for?”

  • Is subscription a step in the right direction for (from left to right) access, consumption, and performance? Any time you move in a direction to the right you are getting closer to the customer. And that’s a great thing.

  • Customers should be paying for performance not promises. However, our own customer sometimes have something to do with the outcomes themselves and we have to acknowledge this.

  • If you have read the book, consider this: “The Ends Game is best played in the singular, not the plural.”

  • Why is the car industry seemingly going backwards on the subscription model? It’s all about direct to consumer vs intermediaries. Intermediaries add complications. Car companies do not have direct relationships with drivers. So how should they setup a DTC model without upsetting their dealers?

  • Services as a subscription are a fascination to our guest, Marco Bertini. Primarily because they are more intangible which makes it more difficult to measure an outcome. At the same time, it is a better industry to move to a performance based model and completely differentiate yourself from others.

  • Why does the subscription model not apply to our guest’s employer, Harvard Business School? In his own opinion, there are certain levels of schools. It’s hard for HBS to make a shift when they are doing VERY well. So there is a bit of legacy there. The greatest changes come sometimes when you have to change.

  • Can you have multiple revenue models in the same company? Yes and that completely depends on the outcome — ownership vs consumption.