All businesses face four lasting challenges that must be overcome. They must create and maintain an attractive business concept, establish lasting customer relations to attract and retain clients, build a strong organisation through developing teams and partnerships to execute their key activities, and do so while maintaining profitable operations. This is the basis used by GrowthWheel to develop their toolkit.
Your business concept starts with an idea that must be durable, attractive, timely and create value for your target customer.
Durability requires recurring transactions; this can either be many products sold to a few customers, or one product sold to many. SAA declaring a return to profitability after selling off fixed assets a few years ago is a case in point for non-durability.
Attractiveness is subjective – it lies in the eye of the beholder. A product or service that is attractive in one market is not necessarily so in another. Your offering must be relevant to your chosen market segment.
It also needs to be timely; the window of opportunity must be open. Paying for drinking water is commonplace now, but no one would have dreamt of buying bottled water in the early 90s in South Africa.
As you might have heard, according to Forbes, 42% of start-ups fail simply because their product or service does not serve a market need. That is to say, it does not create value for the customer, or they don’t realise that it does. But, before they can know this, you must know and understand the value you create for your customers.
A client of mine that sells hydraulics on yellow metal machinery don’t simply deliver that, they give the owners of the machines the opportunity to focus on executing their deliverables rather than having to fix a breakdown in the Lihlatsi. Likewise, accounting firms help improve decision-making with accurate and timely financial reports, and at the same time provides peace of mind that statutory requirements are complied with.
To satisfy your customers’ needs you must fully understand what these are. Designing the optimal value proposition requires an entrepreneurial attitude that challenges the status quo, honing your skill at applying the available tools to assist and guide you, learning to explore alternatives, exhibiting a relentless commitment to understanding your customer and systematically seeking evidence that your idea carries weight.
You then design your offering to address the aspects that are critical to your customers and sell the value that you create, not the product
So say the bosses
Strategyzer developed the value proposition canvas as a tool to help ensure that a product or service is positioned around what the customer values and needs. The customer profile aims to clarify what your customer is trying to achieve, what makes it difficult for them to do so, and how they feel rewarded. This is described as “jobs, pains and gains”. The value map describes a value proposition that is relevant to your customer. One that will help them get the important jobs done, one that addresses pains that are severe enough and delivers gains that are important enough for them. This will create an interest in your offering.
Marnus Broodryk talks about putting on a pair of customer-sized shoes to understand what they regard as important and what motivates them to buy. Also, you must continue to evolve with your customers – what was relevant 2 years ago may no longer be so. Who remembers Kodak?
The Sologix solution
At Sologix, we first establish who your customers are and then what you do for them. We have learnt that how you do what you do is determined by whom you do it for.
We work through your customer profile per market segment to understand their jobs, pains and gains. We identify what is critical and what less so. Next, we design a value map that satisfies your customer’s needs and adds physical, emotional, mental or spiritual value to them.
Engage with Sologix to help you on this path. Join an online course or contact us for personal business coaching by sending us an email here.
