Our business model 7 questions post is very popular, and this post is an extension.
Value proposition and Target markets
“Value” like “Beauty” is in the eye of the beholder! And that beholder is the customer in your target market. It’s tough for businesses to stay razor focused on a target market. Why? There are three reasons :
- There is a fear of missing out (FOMO). So you go after nearby target market needs.
- You discover that your market research missed some aspects of customer needs and buying behavior when you developed your product.
- Competitors, or lack thereof, make customer behavior change hard.
How competitors help
We tend to think of competitors as “threats” and tend to ignore the great benefits that competitors provide to the market. In the early stages, competitors help educate the market, so your costs of developing customer “awareness” are significantly reduced. At later stages of market development, you become part of an industry, attend trade shows and conferences, benchmark performance, develop industry playbooks, and become friends as far as the Anti-Trust law allows! (Disclaimer: We do not claim expertise in Anti Trust or Competitor Collusion law).
Market success means you need to do something different than your competitors. To check this out, go to any trade show with thousands of booths from the same industry. Ask one owner how their offering is different from another owner’s. They’ll be so happy to explain!
Yet the Value Proposition is not clear
The value proposition is what the customer sees as “value” in your offering that she is willing to pay for:
- Your value proposition is different from the competition.
- Value Proposition is not static and must change with technological changes, customer preferences, and constant innovation.
Delivering your Value Proposition from the organization
Delivering your value proposition is an organization-wide task. It’s a continuous activity. If you think about it, it involves the Board of Directors, the CEO, to the janitor. It also involves suppliers and partners who are critical to producing (e.g., a contract manufacturer), delivering (e.g., distributors), or communicating (e.g., ad agencies) your value proposition.
CEO’s miss getting their colleagues on board with the value proposition. Having the internal organization “buy in” to the value proposition takes far less time and effort that persuading the customer.
If you can get your organization and partners to “live” your value proposition it can do wonders for your customer happiness and business model.