Wednesday, November 30, 2005

Three Magical Questions


When I am working on a client’s business, one of the first things I look at is the value proposition. And as always, don’t get hung up on the term because I’m right here to put it into real world small business terms. The value proposition is simply this:

1. What is your customer’s problem?
2. How do you solve that problem?
3. What is the value to your customer?

How you answer those questions has a great impact on your business. Let’s use as an example an accounting firm trying to get more business from small business owners.

1. What is your customer’s problem?

A small business owner is often (usually) a technician. They are good at what they do but they are unsure of themselves when it comes to many aspects of running a business…Things like keeping records, complying with state and federal tax filings, understanding financial matters, and so forth. They would like nothing better then to turn the whole durned mess over to somebody else so they can do the work that makes them money.

2. How do you solve that problem?

Your accounting firm solves that problem by providing them with the knowledge that they need to run their business and the services they need to stay out of trouble. And along the way you help them get the education they need to feel more comfortable about the financial side of their business.

3. What is the value to your customer?

When you are looking at the value to your customer, don’t put it in your terms. Put it in their terms. As an accountant I might think that the value to my customer is that I am educating them and helping them become more finance-savvy. My customer sees it in a whole different way. My customer sees the value as he no longer has to worry about these annoyances and threats to his sanity because he has someone he can trust to take care of “all that stuff”. One of my colleagues pays her accountant $1600 a year to handle “all that stuff” and feels it is worth every penny because she knows it is taken care of. All she has to do is sign on the line right where he tells her to and write the check. That has tremendous value to her and to her business.

Once you understand how your customer views the value proposition your whole business model can flow from that one equation. Your marketing plan flows from this as well. Instead of saying to your potential customer “I’m going to teach you everything you need to know about finances”, your approach is “I’m going to keep you out of trouble and make your life easier.” Which approach do you think will resonate with you the stressed out small business owner? The first approach sounds like more work. The second approach sounds like the answer to a prayer.

These three magical little questions are the key to every successful business:

1. What is your customer’s problem?
2. How do you solve that problem?
3. What is the value to your customer (from the customer’s perspective)?

Answer them well in the marketplace and you will go far.

Until next time,

Caroline Jordan
Get Knowledge. Get Focus. Get Results.
The Jordan Result
www.TheJordanResult.com