Most businesses are dangerously at risk. They think they are in the business of selling products or services. For too many years, this misconception of how to conduct your business activities has been sending companies down dead-end roads. As markets develop and mature, this mentality will soon be extinct. We are seeing more and more big brands under-pressure as they insist on repeating the same old pattern they’ve been following for decades. Brands like New Look, who were once revered by their industry, have become dinosaurs in the modern world.
It’s one thing to understand where you are going wrong and another to be able to leverage when the competition is high. The principles behind building the ultimate value proposition, so that customers choose you, is to focus on what you are good at, limit wasted effort, leverage your strengths in your core market and build from strong foundations.
The only way to achieve a different result is to change what you do. It’s a simple concept that most, surprisingly, ignore. Our neurology is designed to favour the familiar, we find security in what we know. However, especially in hard times, survival is for the fittest. Step up your value proposition, now, and get your business working harder and better to earn more profit.
Evaluate the essence of your product and service proposition in relation to your market. Strip everything down to the essentials and take a look at the skeleton of what you are offering. Examine your position in what you define as your market. Identify who you think are your competitors are, then profile what they are offering.
Businesses drift frequently as markets change. Take an honest look at how far you have drifted away from the market you thought you were operating in. You conduct your business based on your personal assumptions. It is always wise to check to make sure your business is still relevant to your market. Get your whole management team involved in the research to minimise push-back later on and gain from sharing new knowledge. This will also split the work and speed up the process while giving everyone a heads-up on probable changes.
Once you’ve identified the areas you’ve gone off course, you will need to get yourself back in the game. Ideally, you want to rebuild your offering from your foundations up. Go back to your skeleton, these should be aligned to your competitive strengths. If not, you’ve drifted quite some way. Famous brand over-extensions include Zippo perfume for women, Cheetos lip balm, Bic disposable underwear and Frito-Lay lemonade. When over-extension occurs, it takes too much effort to compete away from your home turf. Be wise to know how far is too far.
Time to prune all that additional stuff that is causing distraction, costing you and slowing your business down. This is easier said than done when you are reliant on the income from these non-essentials. Create a plan to transfer income away from these to the new offerings you will create that are integral to your business essence. As long as you understand where your future should be, you can gently and painlessly phase out or discontinue whatever is not aligned.
Being good at what you do requires you to have an in depth understanding of what your customer needs. This demands that you have a good intention to give them an authentic solution. This intention must be built into every aspect of your business. Map every customer touchpoint and look for ways to improve how you deliver it. You will need to have an understanding of how they decide to buy from you. Models like purchase funnels provide useful structures to follow. Get your entire workforce involved use simple methods like post-its and a white board. Map all activities and open your eyes to the reality that your customer endures when interacting with your business.
It goes without saying that the same integrity must also be built into the actual ranging of what you are selling. Examine the breadth and depth to offer a real solution. Too many options is not good for business. The human brain can only evaluate a certain number of choices before it becomes overwhelmed. While understanding your skeleton offering will help, reducing the depth and breadth is likely to increase sales. It also increases your brand strength as your core strengths are better understood.
When doing these exercises, keep in mind how you want your customers to feel as they evaluate whether they should do business with you or purchase from you. That emotion is what you leave behind and creates your reputation.
Valuing your business enough to realign yourself to your customer is what will deliver the higher value proposition. If you don’t care enough about your business, your customer won’t care enough about you. Stop selling at them and start creating value from giving them real solutions to their needs. Do this and you will be more profitable and able sustain the growth you make.