Shareholder Value no 3 – Where do I find the value

Yesterday we talked about customer expectation and thanks to everyone for all the positive comments. Today I want to focus on identifying where the value is to your customers.

To give you a quick example, a few years ago we did a project for an online wealth management system where the vendor thought that being online was the real value to customers. The market on the other hand listed two or three other areas where it felt the real value was, having assumed it would be online.

So why is this important? 

Well there are a few, but for the purpose of customer value, understanding where the market sees value is in our experience the primary data you would use to define price and profit from your products.

This comes down to market knowledge, but going back to the example I gave above, if that particular vendor had tried to sell its system with all the focus on the ‘online’ part, it would never have been able to charge enough to profit adequately. On the other hand by focusing on the areas where the market perceived value, the company was able to hold price higher and attract both customers and routes to market it would not otherwise have been able to. A good result all round.

This is not something you can read up on, or get by checking out the competition. Its also not something we would recommend you get someone else to do for you. Understanding where the real value in your market is can only come from asking it directly. I can almost guarantee you’ll be surprised by what you find and how much more you can charge for your products and services while still delivering value to your customers – good news for shareholder value too!

As always I hope this high level introduction to a way of thinking about value helps and I would love to hear about your experiences.

The Market is Always Right

Well folks, here it is. We've been tweaking and tuning for the last couple of months to get it right, but finally I am very proud to launch the first part of the Backwards Business programme, designed to help companies and entrepreneurs go to market with a way, better chance of success than normal. So far results from the 1st group of customers show -

1. 20% achieving exceptional results way ahead of their business plans
2. 31% seeing significant improvements on their previous performance
3. 19% are seeing improvement and expect further improvement as they apply more of Backwards Business.

The market is always right overview from timsandford

As always its best view in full screen. If you have any questions on the programme or how to access it let me know and I'll be happy to help.

By Tim Sandford

Entrepreneurs and Markets - An Investigation

We are publishing this report a couple of weeks in advance of the formal launch of the Market is Always Right, the first and in some ways the most important module of the Backwards Business programme.

Here's the thing - with all the really high quality business support and advice available on the web, in print and through all sorts of other organisations, why are so many new businesses still failing to make the sales revenues they need to survive and then grow.

The link below takes you to the summary report that covers a piece of research we carried out last year with 100 companies in the UK to find out why. What we discovered may well surprise you and prompted us to introduce some additional material into the Market is Always Right module to help new businesses

Entrepreneurs and Markets - An investigation from timsandford

This is a report so it is definitely best view in full screen mode by clicking in the 4 arrows on the right hand side of the grey bar.

As always if you have any questions or want to talk through any of the findings, please feel free to get in touch.

10 questions that are guaranteed help your business succeed.

In yesterday's blog we asked you whether or not you thought it was a good idea to really get under the skin of your market in order to give your business the very best chances of success?

We have already had plenty of folk come back and agree, but a lot have said they also are not sure how to do it or how to get hold of the right people to ask them questions - all of which is perfectly normal.

Here's the good news. If you learn some very basic rules about approaching potential buyers and asking for their help and input, you will be very happily surprised at how much people are prepared to help. Think of it this way, you are asking them to help you make a better product or service for them, so why wouldn't they?

I won't try to cover the rules in this blog because it would take ages and they are all covered elsewhere on our site or in the book. 

However what I do want to cover in this entry is the information you want to get and the questions you want answered. There are only 10, not more and very rarely less. You want answers to all of them, because when you start to combine the information you get from different questions, it pretty much gives you all the information you need to know whether or not you have a business idea that will work. The questions are listed below.

1. How many buyers are there in the market?
2. When is the market, is it mature, established and growing, new or not emerged yet?
3. Who are the buyers - (in B2B this means companies and individual roles in the companies)
4. Why will they buy your product?
5. How often will they buy your product?
6. How much will they pay for your product?
7. What do they expect your product to do for them?
8. What is the outcome they are looking for from your product?
9. What is your competition?
10. Where and how will they buy?

To explain the colour coding before I go on. Question one in red is a desktop research question that you do at the start and the end because the number of buyers you think there are before you start will be different when you finish. 

The questions highlighted in blue are the most important. These are the questions that tell what the market's motivation to buy is and what it is they really want to buy from you. (This is not about your product, but what your product does for your customer - the real reason they buy)

If the answers to these ten questions when you ask a reasonable sample of your market are all positive then you probably have a business. If they are not you may have to change and adapt your idea, but you know what, at that point in time, you probably know more about what the market wants than anyone else.

I hope this helps, because I know from lots and lots of experience that if you do not do this, you risk your savings in a very big way. 

There is one more blog in this brief series that I'll post on Monday. In the meantime have a great weekend everyone.