By D’Arcy Rahming
There are several bad reasons to enter business. One of the worst is just to make money. I’m no idealist here, so notice I said “just” to make money. There are several questions that a business owner should ask pertaining to their value proposition first. I’ve written on value proposition before, but I ran across an article on lean start-ups in the May issue of the Harvard Business Review that I want to share with readers.
The first of these questions is: What value do we deliver to the customer? People come to me from time to time to help them with their business planning. And the first thing I ask them is: What value are they adding to their customers or clients? Amazingly, this comes as a surprise to many, and they seem unable to articulate how their business is going to help anyone. They tend to want to focus instead on the overall presentation or, in some cases, the amount of money they are going to make.
The second question is also a real winner. Which one of our customer’s problems are we helping to solve? By using this question it really makes selling easy. No one wants to be sold, but everyone wants to have a major problem that is keeping them up late at night solved. Even if it is making life easier or more convenient, you can bet that customers and clients are willing to pay for that.
Another key question is: “What bundles of products and services are we offering to each segment?” This question is important, because it recognises that you need to identify the different areas of your market. For example, some religious denominations eat fish at certain times of the year. An easy win for many restaurants would be to market to these individuals a special meal deal at this time. Yet I have never seen that done here. However, we have seen the ‘hot cross bun’ phenomenon of Easter, so why not take it one step further?
One final question is: “What customer needs are we satisfying?” The old business maxim here of “find a need and fulfill it” has built many a business empire. All of these questions are client centred. You may have what you think is a brilliant idea for a business, or you may have a matured, established business. In any event, take these questions and test them against your business model. You may not find some hidden wealth in your business, but you will definitely have a more satisfied client base.
NB: D’Arcy Rahming holds an MBA from Kellogg School of Management at Northwestern University. A lecturer at the College of the Bahamas, Mr Rahming has clients in general insurance, retail, the health and medical fields, sports federations and financial services. To receive his marketing newsletter FREE go to http://darcyrahming.com