“Why should I do business with you?”
That’s one of the toughest questions for business owners to answer.
Customer service, quality, or the ability to partner with other companies are all important factors, but those are factors that just allow you to be in business, says Tony Collins, Aileron Business Advisor and owner of TurningPoint Strategy.
In order to answer that question, Tony explains that there are several questions to ask that help uncover your company’s signature strengths, including:
- What activities do we do that are really unique?
- What channels do we go through that are different than others?
- Where are our margins the highest?
- Where do customers tend to pay us more?
- Where is customer satisfaction the highest?
As Tony points out in the video, these questions help to reveal the real answer to, “Why should I buy from you?”
The Small Business Advantage
It takes courage and discipline to stay focused on what makes your business meaningfully unique, but a small business that can specialize in a specific market will have a clear competitive advantage in the marketplace, says Tony. “In the end, when you can specialize in a specific market, it means you can solve a really tough problem that really matters to customers. And that is valuable. Customers will pay more for specialists than they will generalists,” he says.
“Small businesses are so uniquely positioned to outcompete larger rivals because they can, if they choose, be more agile and they can nip at their heels. They can move quicker. They can specialize, and they need to take advantage of that. Being able to answer the question about your signature strengths is important to do that.”
How to Find Your Great Value Proposition
A great value proposition is anchored by the one great thing that you can do better than your rivals. To do this with a collaborative approach, bring your leadership team together.
One question in particular that’s effective to explore individually, and then as a group, is which channels are the most profitable – and what are you doing differently in those channels compared to rivals, in terms of value created? “Interestingly enough, this sales channel question takes people by surprise a little bit, because often times we don’t think about the sales channel.”
For example, if a company is selling through a distributor, its leaders might think of sales in terms of the end customer. Instead, this exercise can help teams see the distributor as a customer. Exploring your channel strategy, and the unique value you offer various distributors is a worthwhile exercise to hone in on the unique value you provide.
Write answers on a flipchart or on a white board, and refine as necessary until there is agreement on what you do better than your rivals. “Asking the question, ‘Why should I buy from you?’ is an indirect way of finding focus,” adds Tony.
A Path to More Profitable Growth
Teams often walk away from the exercise knowing what to focus on when it comes to profitable growth – and just as important – what not to focus on. It’s not about no longer serving those that aren’t aligned with your core strengths, explains Tony, but it’s about knowing where to focus future resources.
“The first thing I often hear from a business owner is, ‘Well, I can’t stop selling to these other people,’ and this is not about doing that. This is about shifting into what allows for very profitable growth.
This allows you to say, ‘I’m going to start emphasizing this market, and this customer segment. I’m going to invest more in it, and I’m going to de-emphasize these others. I’m not going to forget about them, but I have greater clarity going forward.’”
Many organizations discover that embedded in this approach is the path towards highly profitable growth, says Tony. “And by profitable, we mean products that matter to targeted customers. Answering the questions in this exercise can help you know what markets you are going to invest more in, and what customer segment you will be focused on, and the narrower, the better,” he explains. “It takes a lot of discipline.”