Every good business plan has a good
business model with a clear, strong customer value proposition at its
core. A customer value proposition shows that your product or service
either delivers a solution to a problem or it offers a real benefit
of some sort. For example, America's Best Companies provide small
businesses with the tools to help them stay in business, grow their
business, and make more money in their business. There is the value
right there. You can see that a customer value proposition does not
need to be complex. In fact, the simpler it is, the better since it
will keep you focused. If you can explain why your business has real
and lasting value to the consumers that you want to reach, and you
can do it in a single, pithy sentence, you are on the right track.
You can break your customer value
proposition down into three building blocks—customer adoption,
differentiation and pricing. Alone, these are merely aspects of your
value proposition, but together they can create something powerful
that can help drive business and attract investment.
Break the mold.
Unless
you have invented something utterly unique, you can count on there
being a lot of businesses like yours out there. This is especially
true on the Web. So, what are you going to do? You need to set your
business apart. What do the others do? Can you do that better? What
don't they do? Can you fill that gap? Remember, it is the service and
the treatment that most people will remember about their experience
with a business, not the price. If they are treated well—better
than by other, similar businesses—then you have differentiated your
business in a most powerful way.
Find your niche.
We know
you want the whole world to be your customer base, but for a startup,
that can be very difficult and very expensive. It means that on some
level you will have to be all things to all people, and from the
experience of those who have gone down that thorny path, no one comes
up happy. Instead, stick to your core values and try serving a niche
market. By going this route, you trade the potential of a wider
customer base for a greater level of loyalty and interest from the
customers that do come in. More than that, these folks are more
likely to spread the word about you, a great source of advertising
that you can spur through the use of social media outlets like
Facebook and Twitter. Then, once you have a good following, you can
think about tackling the rest of the world.
Price and price structure.
You
cannot really compete only on price, but you can compete on how your
prices are structured. You might offer credit, flexible payment
options, or go against established practice in your industry and
structure your prices in a way that offers a better alternative.
This, of course, goes back to the idea of breaking the mold. We saw
this when Software as a Service first emerged as an alternative to
traditional software licensing. The key here is to find a way for
your products to be affordable to the widest variety of people
possible. If you can do this, it will not be lost on consumers who
are trying to save money in today's economy.
Your business model is a central
component to your business plan, the main tool that you will use to
both guide you as your business grows and convince investors that
your business is the one they have been searching for, but without a
strong customer value proposition, none of that can happen. Maybe its
time to sit down and write one, or, if you have one but haven't seen
it in a while, it's time to dust it off and see if you are living up
to it. Either way, the value you offer your customers should be first
and foremost in your mind.
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