What does a start-up, small business owner or consultant need to know about a customer value proposition?
It may sound like a term used by business schools or management consultants but it’s a tool that can make a difference in your business.
In one way it’s got harder for small businesses to offer greater value than the big giants but in another way the corporate behemoths can’t cover every niche.
Take supermarkets. When last have you seen an independent supermarket retailer? You either see company-owned stores or those retail stores franchised by the giant chains. I recently visited an independent supermarket in Johannesburg and wondered how they had survived for so long. This is a stand-alone independent supermarket. How does it differ from the chains?
With such small buying clout lower or competitive prices isn’t their forte. You could say a core competency of theirs is friendly customer service but I didn’t find them any different from the large chain supermarkets.
Their product range was basically the same as that of any of the larger supermarkets although they did have a lot of imported foods and merchandise. But the SuperSpars also have an extensive imported range.
Perhaps the core competency of the independent store is the exclusivity that it provides to its customers in the higher income bracket. This band of customers wants something different and exclusive, requires efficient home deliveries and will therefore be prepared to pay a premium.
What is it that your customers value and that you can provide them? Do you have the core competencies to provide this value?
Let’s for a moment look at Apple. What are their core competencies? Some say it’s the design of their products and ease-of-use. If you look at Dell Computers, their core competencies are fast shipping and customisation. Apple comes in standard models but with Dell you can customise your computer box just as you want.
When you are starting up a new product or service from scratch, you need to be clear about your value proposition and how it differs from your competitors because you have to stand out clearly in your marketplace. But you also can reposition your small business for greater sales by being clear about what you offer your customers.
Questions you probably need to ask yourself about your customer value proposition are:
– What value do customers want from my business?
– What value am I best equipped to offer them?
– How better is my business at offering value than my competitors?
– How do I deliver value to my customers?
– How can I clearly communicate my value proposition to customers?
The thing is that at some point you need to go ahead with your best possible customer value proposition. You can’t be a perfectionist. Go with what you’ve got, give it your best shot and redefine as you adapt to the realities of your customer and the marketplace.