Why is it that your competition continually seems to be one-step ahead of you? What is it that they do that grants them the right of last refusal on proposals and positions them as the vendor of choice within your market? Is it because they have a better product offering, a stronger marketing strategy, a more aggressive and better trained sales team, or is it simply because they do a much better job of defining their value proposition? Your competition is following a simple and straightforward script that allows them to capitalize on every single opportunity. It starts with a clearly defined value proposition, one that every single one of their employees understands and ultimately, one that their customers truly appreciate. Consider it a doctrine and the one reason your company continually falls short. However, you can turn the tide by defining your own value proposition. So, what does this entail?
Is it important?
Regardless of how good your product is, if your customers see your competition as their first and only choice, then you’ll be hard pressed to remove them from the top spot. To be successful means you must clearly define your company’s value to your market and your customers. Unfortunately, far too often companies see themselves one way, while their customers see them another. However, if perception is truly 100% reality, then how your customers see your enterprise must be the overriding factor in how you define your value to them. This requires the ability to use factual assertions about how your customers view your enterprise. Yes, you can change your customers’ perceptions, but it starts with an honest assessment about how they see your company. In order to make this exercise worthwhile, it’s best to start by defining your company’s strengths and weaknesses based on how you, the owner, see them. Do this first, before going any further. Come up with a list of five strengths and five weaknesses on your own about your company. Once you’ve done that, gather your team together and move forward with the steps outlined below. They are predicated on outlining your company’s value proposition from the mindset of your customer base. Suffice it to say, you’ll see some unique differences in how you see your enterprise, and how your team says your customers see your enterprise. The ultimate goal is to bridge that gap and come up with a value proposition that truly defines your company’s core competencies.
Step 1: Separate perception from reality with a SWOT analysis
Start by having your team outline your customers’ perceptions about your enterprise by using the time-tested SWOT Analysis. Define your company’s strengths and weaknesses from your customers’ viewpoints. Put yourself in your customers’ shoes. How do they see your enterprise? What are your company’s strengths and weaknesses based on how your customers see your company? Ignore the temptation to override these perceptions. Remember, all that matters is how your customers see your company, not how you see your company. Again, be honest, don’t use assumptions. Instead, stick to factual assertions.
Next, classify the opportunities and threats portion of the SWOT grid based on the benefits of changing, versus the consequences of not changing. This exercise will provide you with the opportunity to define how your customers see your enterprise and what you need to do to adjust to this new reality. For instance, are there things your customer base would like to see your company do more of, but that you can’t or won’t do because of budget or time constraints? Have your customers recently advised you that your product offering could improve if you were to include delivery, shorten lead times, or combine shipments to lower their freight costs? Think outside the box. However, temper your analysis with the reality of how your customers see your enterprise.
Strengths: Customer viewpoint
Define how your customers see your strengths. Come up with three to five unique descriptions or points.
Weaknesses: Customer viewpoint
Define how your customers see your weaknesses. Come up with three to five unique descriptions or points.
Opportunities: Benefits of acting
What are the benefits of improving upon your strengths and eliminating your weaknesses? Will your customers be more likely to purchase after your company makes the necessary changes? Will this increase your market share?
Threats: Consequences of not acting
What are the consequences of not accentuating your strengths and eliminating your weaknesses? How will your customers see your company if it doesn’t improve? Will you lose more market share by not acting?
Step 2: Focus on improving your strengths and mitigating your weaknesses
One of two outcomes will emerge from the first step. Either you’ll be pleasantly surprised with how your customers see your enterprise, or you’ll realize they see your enterprise entirely different from what you expected. No outcome is bad. It’s an opportunity to make changes, changes that will grow your market share by better defining your company’s value proposition. It’s up to you to accentuate your strengths and mitigate your weaknesses with a definitive action plan. Want to move some of your weaknesses over to strengths? If so, decide how that should be done. Want to improve some of your strengths and accentuate them within your market? If so, outline a strategy to do exactly that. However, it can’t be based on what you think your company’s reputation is in the market. Instead, it must be built around how your customers see your enterprise, and what you and your team must do to accentuate your company’s strengths.
Step 3: Define your value proposition
It starts by deciding which strengths you can further improve upon and which weaknesses you can eliminate entirely. For instance, is there a product line that your company is well known for? Could you increase sales even further by using rewards and discounts? Would this further improve your position by showing your company’s market share dominance on this particular line? Could you then combine these sales with other items your customers need, thereby further showing your willingness to work with them? Does your company have a unique capability that your competition doesn’t, such as being able to lower your customers’ incoming freight costs with combined shipments? There is simply no end to the ways your company can define its value proposition. However, success starts and ends by recognizing how your customers have defined your company, and what they see as your most important attributes.
Coming up with your company’s value proposition can be an involved process. However, that process is much easier when you take the time to define how your customers see your enterprise. Start by defining your company from your own viewpoint. Next, have your team define your company’s strengths and weaknesses from the mindset of your customer base. Outline the benefits of acting, versus the consequences of doing nothing. Focus on those strengths you want to accentuate, versus those weaknesses you want to eliminate. Finally, put a plan in motion to redefine your company’s value proposition and make sure your team adopts it as their own doctrine.
Read more from Wikipedia