It should not be a long list. Stop at three.
This is a case of no matter what you may think, quantity does not matter, accuracy of definition does. We are trying to define your current or desired business model, not something to brag about.
After absorbing this session, I want you to define what problems you are solving for your target market segments.There is no reason for a client to hand money over to you unless you are going to solve some problem for them. Click To Tweet
It may be a problem defined by analytical means, or it may be a problem defined by emotional needs. Either is valid.
A “Value Proposition” is the service, or bundle of services, that you provide to a particular market segment. It is what the client values enough to pay you for.
Your “Value Proposition” may have added features and benefits, or it may have reduced features and benefits.
You may be duplicating a product or service that is already on the market, or providing one that you have developed specifically for your target segment.
You can define your value proposition by answering the following three questions:
- What value do your clients or customers extract from your product or service?
- Which of your clients problems are you solving with your products or services?
- What bundles of products and services are you offering to each target segment?
Your solutions may include the basic tax compliance and financial reporting requirements commonly referred to as “client writeup,” where value is created for your client by solving their compliance requirements.
Or, you may be extending this basic service and providing analytical solutions that answer questions about business operations through reporting of exceptions and measuring of objectives.
Another value proposition may be the solving of some special need, such as a tax resolution service that you provide to troubled taxpayers.
The taxpayer client may see value in your ability to reduce their liability or prevent seizure and sale of assets.
In some cases, you may be providing custom solutions to unique problems that a client is facing.
Your value proposition may include an audit of business operations and you may be providing solutions in the form of recommendations from your operational audit or engineering survey.
In each of these cases, your value proposition encompasses the entire set of client solution attributes, including the promise you are making to them, the value which will be extracted by the client, the appeals that will influence the client decision and the channel you use to deliver your promise.
Your greatest task will be to refine your list of features to those that are material to solving your target segments needs and ignoring those which offer minimal value.
For example, your clients may value the fact that your services are delivered in hours instead of days, or days instead of weeks.
Your clients may receive value from your timely updates and regular communication.
Or, your clients may value that you are non-intrusive and do not bother them with excessive data and reports.
You may find that some clients value an association with you and your “brand,” or they may value your independence and lack of branding.Each factor in the design and structure of your service delivery is a part of your value proposition Click To Tweet
Each factor in the design and structure of your service delivery is a part of your value proposition.
What you want to deliver in the way of solutions will help define what your proposed business model is. What your desired target market segment seeks in the way of solutions is what your business model should be.
As you read this, what I have written may have caused you to reach into the “duh” part of your vocabulary, but that’s okay. It should be commonsense, and you should be able to understand it.Business models are logical, and your business model should be logical to you. Click To Tweet
But, without a good intellectual understanding of the subject, what is obvious after reading about it, was unknown and might not have been a part of your vocabulary before.
So, here we go with the intellectual part. Ready?
First off, you need to understand that as far as your target market is concerned, your practice can only have one Value Proposition.
Sure, if you grow to the point where you have “departments” (Big companies call them Strategic Business Units, but you’re not big yet, are you?), then you can have a Value Proposition for each department or division. But, your prospects only want to hear about the one that relates to them.
I guess that at this point, it’s time to introduce you to the Rainmaker Buyer Type and Promises Matrix. Go ahead and download the matrix and study it very carefully.
As you are developing your Value Proposition, you will also be refining your target market selection to match with your practice strategy by targeting your prospects according to their stage in the response continuum.
- For example, if you have determined that you will be implementing a strategy of Low Cost Leadership or Price and Cost Focus, then you will be targeting prospects that are in the transactional phase of their existence.
- Or, if you are following a strategy of Differentiation or Differentiated Focus, then your prospects will most likely have either Consultative or Complex responses.
Each response stage expects to hear you present the promise that meets their needs. They each respond in a way that offers their value and you must be prepared to accept that value with the appropriate promise or influencer. And, you have to deliver it through the correct channel.
We’ll cover more of this later in the course, but for now, use this information as you develop your own value proposition.
Now, let’s talk about the Rainmaker Capabilities Analysis Matrix and The Rainmaker Value Proposition Type Matrix. Your understanding of these two matrices will shed some important insights into matching your Capabilities to your Value Proposition.
Go ahead and download them and then take a look at the Rainmaker Capabilities Analysis Matrix at the top of page 2.
The Rainmaker Capabilities Analysis Matrix helps you think through your offering by providing a way for your to identify concepts related to building your Value Proposition, based on your abilities, and your competitors abilities.
Essentially, you want to know what to do in cases where your competition has a particular capability and you don’t, and vice versa.
- Look at the names across the top and down the side of the matrix. The columns identify whether a competitor can or cannot provide a particular capability in the solution you are proposing. The rows identify whether you can or cannot provide that same capability as part of your solution.
Each cell in the matrix suggest a strategy to use in implementing a solution to the need you have identified.
I know I’m getting long-winded in some of this, but hang in there. It gets easier.
Next, take a look at the Rainmaker Value Proposition Type Matrix.
If the capability is more heterogeneous or unique than homogeneous or standardized, and your solution calls for heavy involvement by or with the client, then a customized solution is suggested, as in Cell #1. If the involvement with the client is low or moderate, then you may want to consider merely provisioning, or providing, resources as the solution.
Now, your task for this module is to write down your understanding of what you are delivering in the way of solutions to your clients at each stager in the Promises Response Continuum.
Don’t spend a lot of time on the particular products or services as you start your breakdown. Instead, make a list of what capabilities you are providing by answering the questions posed by your review of the two matrices as you complete the Rainmaker Value Proposition worksheet.
Once you have completed the worksheet, review the capabilities types, the difficulty of implementing each capability, whether by you or your competitor, as well as the Value Proposition type suggested for each capability. Make notes if you have any idea. Be free form, this is not something that is set in stone.
What you are looking for here is commonality.
Your Value Proposition will be easier to implement if your Capability Types and suggested Proposition Types are consistent, and your implementation is easy, while your competitors is difficult.
Once you have all that sorted, you’ll have some good parameters for your Value Proposition, your solution to a particular need or want.Your Value Proposition will be easier to implement if your Capability Types and suggested Proposition Types are consistent, and your implementation is easy, while your competitors is difficult. Click To Tweet
Now, get creative and put all those capabilities into an offer, one that you think you can deliver.
Then, look at your target market, your “Milton,” and Milton’s problems or needs, and what stage Milton is along the Buyer Type Response Continuum. Refine your description of Milton in a way that excludes needs that apply to any other target market segment.
Milton must be unique. If Milton is a Widget distributor, then you are not focused if the needs you are solving also apply to a plumber.
Once you are confident that you have Milton’s needs narrowly defined, then, see if your Value Proposition fills those needs.
Present company excepted, of course.
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