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As a kid, I would stare up into the night sky with amazement. It’s pretty obvious that we are a just a tiny part of a very large (one might even say universal) system. The same is true of our businesses – we are simply a small part of a large system. I can guarantee you that nobody really wants what you sell. They simply buy it to achieve some higher need, solve a problem or realize a desire.
When I buy your gasoline, I don’t really want gasoline, I want to go somewhere, and gasoline is simply part of my solution. When I buy a Zoom subscription, I don’t really want to see someone – I want to close a deal, refine a plan, hire a new employee, show my parents I love them. When someone buys your product or service it becomes a part of their value stream - created to address a particular problem, need or desire.
One of our clients designs memory chips for the office equipment market. Their clients would insert the chip into a memory module, add a power cable to drive it and bolt it into the copier or printer. By thinking about the value stream to which they were contributing, they now provide their client with a complete memory module - including the power cord – saving them time and money (while increasing their own profit in the meantime). .
As business owners there are two opportunities for growth here:
1. Your suppliers: How can you work with your suppliers to adjust what they deliver and how they deliver it so that you can integrate it with your offering quickly and efficiently. Packaging, labelling, time of day, ease of download, security, access, sustainability. You can become a favoured customer, enjoy better pricing and more responsive service. Robust conversations with your suppliers can lead to some surprisingly profitable outcomes.
2. Your customers: What do you know about how your customers consume, convert and add value to what you sell them. How do they make money, solve a problem or realize a desire with what you sell? (And remember Pareto’s 80:20 rule – 80% of your clients will have the same issue(s)). What can you do to take the cost out of their solution? For you this can lead to lower sales costs, improved margins and increased loyalty.
So, the next time you see the night sky, remember that your business is part of a vast end-to-end value chain. Understanding where you fit in it, and how you can add value, margin, and loyalty upstream and downstream, is the challenge we give you.
If you know of someone this blog might help, will you share it with them?
Thanks for reading.
Let us know what you think. Questions, comments, complaints and suggestions are always welcome!
New for 2020: We have released two new programs;
• DAM – Dominate any Market – for companies that are looking for aggressive growth and aspire to being the Best in the World.
• Look West – is created for our friends in the UK who may not be feeling too chuff about growth prospects in the EU or in the USA. We help them to develop the North America market by gaining a foothold in Canada.
Please forward this to any impatient companies in the UK who want to get moving again.