When your business’ value proposition is strong, you can afford to be more selective in the new customers you take on, and so concentrate your investment on the most profitable and potentially loyal prospects.
What is it?
Your Business Value Proposition, or BVP, is your business’ expression of the benefit to your customers for doing business with you, whether it is perceived or real. Customers make decisions every day about how to allocate their scarce dollars based upon what they feel benefits them, and they’re often forced to make trade-offs. Whether you’re dealing with individuals or businesses, their decisions are based on whether something meets their perceived needs. Creating your BVP
There are three components to a BVP.
- Obvious Benefit
By focusing on the obvious benefit, you narrow in on what customers want. Describing your benefits clearly and succinctly makes it easy for potential customers to pick your business out of the many alternatives. - Real Reason to Believe
Once you’ve told potential customers your obvious benefit, you still need to give them a very real reason to believe what you’re saying. This comes down to credibility. The reason word of mouth is such a successful way to increase business, is that it’s coming from someone who’s neutral, which adds to your credibility. - Dramatic Difference
This is your ability to differentiate your product or service from the competition. If you’re seen as being the same as your competitors, then you’re just a “me-too” business. Me-too businesses provide a commodity and must compete chiefly on price. And that leads to a downward spiral, until there are no profits to be had at all. It’s all about value.
Successful businesses continually offer something that other competitors can’t or won’t. This lack of competition allows them to charge higher prices, and therefore maintain profitability.
The trick is that the .something. you are offering must be something that customers want. Moreover, it must be something they have the ability to pay for.
The equation then, is simple. Businesses that know what their customers want and are willing to pay for will succeed, while those that don’t will fail.
By creating products or services that meet the needs of your customers, and communicating the benefits to them through your Business Value Proposition, you’re making it easier, and therefore more likely, for people to do business with you.
Copyright © 2009 Principa.
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