Most businesses drift aimlessly from day to day without ever giving much thought as to how their business model is going to secure a competitive strategic position. No wonder most businesses fail within the first five years! In reality, every business has a model; however, it is usually just a by-product of how the business operates anyway. Your goal should be to create a successful business model based upon planning and research, and focus on deliberately accomplishing specific objectives. This exercise is just as important for existing businesses as new start-ups. In fact, every business should analyze how to improve their business model annually. How else can we expect to maintain a competitive advantage in the face of ever-changing customer wants and growing competition?
The best chance for continued success in a competitive business environment is to develop a business model that will provide the highest percentage of success in capturing market share. Most people in business have never walked the path that they have just chosen; they fail to do the necessary homework and planning relative to the company’s business model. Most often this is because many business people simply don’t know what they should be planning, what questions to ask, what decisions need to be made, or what type of information they should be researching. Businesses owners who do not make educated decisions about their model will not satisfy their customers enough to earn their loyalty.
The solution is to develop a business model to successfully stand out from the competition. This will certainly not be easy. First, you must know what questions to ask. For example, what benefits do your customers really want, how will they respond to your advertising, at what price points do they lose interest, what are your customers’ purchasing frustrations, is the size of the market large enough to generate the required revenue, and what types of skills will your salespeople need? Obtaining the correct answers to your questions will require accurate research about both your target customer and your competition. It will undoubtedly be easier to get the right answers while you are actively operating a business.
Most businesspeople focus on the product or service when they think about what they are selling, but others will argue that you will be more successful if you focus on position. That includes differentiating your product or service from the competition, developing unique sales and delivery systems, emphasizing the total customer experience with exceptional service at every touch point, and creating operational or technological advantages or pursuing a completely new market segment. Combining an operational cost and price advantage with any of these strategies will strengthen your strategic position.
Developing answers to these questions will be a good place to start in developing a successful strategic position for your company.
Develop Product Uniqueness
What is going to get people talking about your product? What is going to make your product stand out from the competition? When you focus on the product or service and the brand development of what you are selling, you will probably start with developing a product that people want. The next step, development of brand awareness, comes with time.
Seth Godin, in his book, The Purple Cow, talks about how most companies are invisible today because consumers have so many choices and so little time that they are not going to go out of their way to buy anything. Remember that the only way to get the consumer’s attention today is for your product or service to be so extraordinary that people will talk about your business in terms of your outstanding product. Think about the businesses your friends are talking about and why they are talking about them¾these brands can boast something unique. These companies have been successful at building their brands with word-of-mouth advertising by offering a product or service that is more outstanding than their competition.
Developing Unique Sales and Delivery Processes
How many times do you purchase a product purely because the sales or delivery methods are so convenient? Michael E. Gerber, in his book E-Myth, suggests ways to look at what you are really selling. He suggests that you should not dwell on the product or service, especially if others are already offering it, but instead focus on the business model as what you are really selling.
Your business model can be defined as how your business processes interact with the customer to sell the product or service, and how your business delivers it to the customer. The processes in your business model need to give consumers an improved, alternative method for purchase and delivery relative to the competition.
Developing Unique Touch Points
Another way to look at what you are really selling is by examining the total customer experience. We all like to be treated as though we are special and important. Do you remember your last purchasing experience where you were made to feel extra special? Did you talk about your experience to others? Chocolates on your Pillow Aren’t Enough, by Jonathan M. Tisch, offers several great examples.
To begin with, you will need to examine what your customer wants every time they come into contact with your company. What types of feelings and emotions do they want to experience at every touch point? The total customer experience must be remarkable every time and place a customer touches your company.
In conclusion, start investing your time today to build a business model that will stand out from the crowd and stimulate vigorous word of mouth advertising.
