The million dollar question you may want to ask yourself is if your idea offers enough value for the industry you are attempting to enter?
Almost every entrepreneur who is attempting their luck at a start-up may ask themselves if they are bringing enough value that will separate them from the rest of the industry. A value proposition plays a vital role in the success of your entrepreneurial venture and is what will either make or break your future success. Your value proposition is what makes you uniquely different from the rest of your competition. Yes, just like failure, being different in an entrepreneurial context is something almost all entrepreneurs encounter.
Just like all people, customers have needs, and it’s our responsibility as an entrepreneur to generate ideas that satisfies and fulfills those needs. And if you are not going to satisfy a need, then you are probably trying to solve the customer’s problems, and that is all done through your value proposition. Your idea has many characteristics that it may offer; this includes uniqueness, newness, availability, performance, customization, design, brand, cost and risk reduction, accessibility, usability, and convenience. So ask yourself, what is the value you are offering and will it have significant impact to elicit change.
Here are a few thought-provoking questions that will help centralize your value proposition and give you clarity about your vision:
- What value do you deliver to your customers?
- Which one of your customer’s problems are you helping to solve?
- What bundles of products and services are you offering to each Customer Segment?
- Which customer needs are you satisfying?
There is no right or wrong way to organize your thoughts about around your value proposition. I like to treat this as a process that you build on. There is a methodology that helps build a quantitative value proposition using the N.A.B.C. (Need-Approach-Benefit-Competition). This will be your first step in developing value creation. You can download a copy on my personal Internet page by clicking the link (http://www.briandcooper.com/handouts/) or the picture at the end of my blog.
The NABC was developed by the Stanford Research Institute as a quick and effective way of evaluating the merit of a business idea. Remember if you are going to fail, fail fast. The goal is to address the important need, use a unique approach, provide the buyer with a compelling benefit, and be significantly better than the competition.
Treating this activity like a process, first you will want to start by answering the questions in a bullet point format. The second step is to give your bullet points some structure by modifying them into complete sentences. You will want to have a paragraph for each section of the NABC. The last step is to wordsmith your NABC into 150 word value proposition. Doing the last step will give you the foundation for a solid pitch and strong start for your business plan.
Remember that your value proposition will answer in the most compelling way, the reason why your customers will buy your product or service. Know who your customers are, and if you don’t know then find out through market research. You want to be clear and precise to prove your value proposition is valuable to anybody who is interested.
I always love to hear your comments so please leave me one on this blog.
Downloadable material: CLICK HERE