Every embedded vendor should ask these four questions quarterly. The answers reveal your true zone—before customers show you the hard way.
The Four Questions
1. Value Creation vs Capture
“Are we creating new value faster than we’re capturing existing value?”
If you can’t point to new capabilities that justify your last price increase, you’re drifting hot.
2. Customer Perception
“Would customers describe us as infrastructure they’re glad to have, or infrastructure they’re stuck with?”
Survey them. The answer determines your zone.
3. Expansion Motive
“Are our expansion motions based on customer desire or customer constraint?”
Expansion from desire compounds. Expansion from constraint breeds revolt.
4. The Switching Test
“If switching became 50% easier tomorrow, how many customers would stay?”
This thought experiment reveals your true position:
- Most would evaluate → You’re Too Hot
- Most wouldn’t bother → You’re Goldilocks
- All would leave → You’re Too Cold
Answer Interpretation
| Answer Pattern | Your Zone | Action |
|---|---|---|
| All positive answers | Goldilocks | Maintain discipline |
| Mixed answers | Warning Zone | Course-correct now |
| Negative answers | Too Hot or Too Cold | Strategic intervention needed |
The Discipline
Schedule these questions quarterly. Zones drift. The discipline is monitoring.
By the time you see it in the numbers, you’re already in trouble.
This is part of a comprehensive analysis. Read the full analysis on The Business Engineer.
More Resources
