One of the great questions as an entrepreneur or a business owner is, “How do you keep your business evolving with your customer?”
Today, we call this business model innovation or reinventing you business model. What is this? It means is that no matter what has happened in your past, your current business model may be partially obsolete in some places. In some instances, it may be completely obsolete.
It may be time for some business model innovation.
DEFINE YOUR BUSINESS MODEL
A business model is the ability to generate profits. It’s the process or system by which you create profits. Sometimes, they call it the revenue model. You have to ask yourself, “Is your revenue model or your business model working as satisfactorily as you want? How can you tell?
If your business model is working properly, it means that your profits and your sales are going up at a steady basis.
If they’re not going up, if they are leveled off, or they’re becoming unpredictable or even worse, if they’re declining, then you have to take a timeout and try some business model innovation.
The entirety of the revenue model is based on two things.
1) BUSINESS MODEL INNOVATION: YOUR PRODUCT
Your product is what we call a Customer Value Offering or a “CVO.” This is the value that your product offers to your customer.
What problem does your product or service solve, that your customer will pay you for solving?
It is astonishing that today how many people develop and offer products and services to solve problems that customers do not even believe that they have. Many companies will actually go to market and spend an enormous amount of money developing a solution for a problem that doesn’t exist.
This is why even with the best research, marketing, and product development, 80% of new products fail.
IS THE PROBLEM YOU ARE SOLVING IMPORTANT ENOUGH?
Just like 80% of new businesses fail is that they find that the customers do not have a problem that the product or service can solve, or if they do have a problem, it is not big enough for them to take action or to switch from someone else.
It’s really important to evolve your business, is that you become very clear about the problems that customers really have, and then you find a way to solve that problem better than anyone else.
This is so important. You have to solve one problem better than anyone else.
That acts as the core of your business.
WHAT IS THE JOB TO BE DONE?
Another challenge is what we can say is every product or service does a job for a customer.
In fact, if you look at it this way, which I think is really neat. You say when you buy a product or service, you are “hiring” that product or service to do a job for you that you cannot do without it.
The question is always, “What is the job to be done?”
What is the job that your product or service does for a customer that they will pay you to do for them. You must be absolutely clear about what the job is and you must be clear about how important it is.
That’s the starting point. The starting point is the product. It must solve a problem or do a job. It must satisfy a need or it must achieve a goal. It must do something that customers want to be done and are willing to pay for.
2) BUSINESS MODEL INNOVATION: WHO IS YOUR CUSTOMER?
The second part of evolving you business, is your customer.
Who exactly are you ideal or perfect customers? Who is the customer that, more than anyone else, will buy your product or service immediately. What is their age, education, background, hopes and dreams? One of the biggest questions of all is,
What role does your product or service play in their lives? Is it an important part of their life? Is it unimportant? What difference will your product make in their lives if they use it or not?” You must be absolutely clear about these.
Many years ago when I started to grow and develop as a speaker and as a person, I began to order and listen to audio programs. My first audio program really opened my eyes because it was full of so many good personal development ideas.
Since then, I’ve listened to hundreds of hours of audio programs and every so often I come up with an idea that is worth hundreds of thousands of dollars.
How do you keep evolving as a company?
Keep scanning the horizon of customers and find out what customers need and are willing to pay for, that nobody is providing to them, in an excellent fashion. If you can do those things, you can keep reinventing your business model and stay on the cutting edge.
What kind of products do you think the market needs? Who are you selling to today and who do you want to be selling to tomorrow? Leave your message in the comments.
By Brian Tracy