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– fix all the meanings
– say, «thank you» to everyone who participated in this discussion
External factors and their impact on the business model
Even the best ideas are broken down by reality, even if you have drawn the business model very accurately and clearly, attracted the best experts for advice, the fact is that there are still a few things to consider:
1. Consumer advice. Be attentive to the customers of other companies, because the customer always knows better how to provide him with a service or how best to deliver the goods.
2. External environment. Analyze the environment, look for trends that occur in the economy around us which industries evolve, what industries are in the stage of decline – all this important information, which will allow you time to adjust your actions and make management decisions.
As you move forward with the business model, you have already noticed that this work provides a lot of answers to your questions and helps you make an actual management decision. If you were able to get a complete picture of how your business will function, then you probably already have the answers to these questions:
– Is this my business?
– Can I raise this business or do I need partners? And where should I look for them?
– Do I really want to do business?
– What will my customers get?
– What values do I create in the world, in life, in the market?
But also many other answers. All these answers lead you to the main decision-the willingness to implement your business idea.
WHO ARE YOUR CUSTOMERS?
Classification of business types
There are 3 ways to make money in business:
1. Production:
1) own product
2) product according to the customer’s documents
3) product development for the purpose of selling technology or business
2. Trading:
1) sale of everyday products and distribution of goods of large manufacturers
2) franchise (work under the brand of the product manufacturer)
3) independent purchase of goods from the supplier
4) wholesale trade
5) selling a digital product
3. Provision of services:
1) training
2) consulting
3) preparation and execution of documents
4) representation of the client in relations with third parties
5) body care (treatment, beauty care, fitness, etc.)
6) maintenance of the territory, equipment; household services
7) transportation, logistics services, etc.
All these activities can be divided into 2 classes:
1. You are part of someone else’s big business
2. You are implementing your own entrepreneurial initiative
Task: take a pen, paper, a completed template and see what type of business your business belongs to. This will determine how you will build your future business strategy.
Features of interaction with clients in different types of business
Those of you who decide to do business selling everyday products, your business will be little different from the business of a neighboring outlet. In this case, you do not need to make any large amount of efforts to study your customers, the target audience. Those who offer you goods for sale have long done this for you. Your task in this case is to pay great attention to the location of your outlet, how customers come to your business, how they find you.
There are only three ways to get customers:
1. Point of sale – in the flow of customers, for example, the most crowded street in the city.
2. Attracting Customer Flow to Point of Sale
3. Face-to-face meetings with the client.
When we talk about the target audience, we very often mistakenly define «who is our client.» You need to know four clear characters who are in contact with our product:
1. User (the one for whom the product is made)
2. The one who pays the money. Very often, someone who pays money is not a user, for example, mom buys a toy to her son
3. The person making the purchase decision. It may well be that my mother has money, but the decision to buy a toy is made by dad.
4. The one who gives advice to the person making the purchase decision. For example, a person with whom dad consulted.
Basic Principles of Customer Development
Before we go any further, we need you to pay attention to one very important thing: that today we live in a world of oversupply, overproduction, in a world where you can buy everything, there would be money, so now you need to be puzzled not by how to develop your product and «push» it to the market, but by the fact that we discuss every step, every stage of the development of your product-invention with our potential customers and at this stage of discussion we make them our supporters, future buyers.
To solve this problem, several techniques have been devised that allow you to bypass it. One of these methods is called Customer Development. If everyone used to talk about creating a product, now everyone is starting to talk about creating customers. As entrepreneurs, you should not try to find a niche that you will fit into, but create your own niche. When developing a product, you need to interact with your future customers, studying their demand at every step, at every movement around the development of your product. You need to create this audience that will buy from you. Remember that a product is a fairly broad concept. It can be anything you produce, whether it’s buns or a service.
In Customer Development, there are 3 principles to follow:
1. A hypothesis is just a hypothesis. When you go to people and start talking to them, things may not be the way you imagined them to be.
2. Verification-confirmation of hypotheses, confirmation of your facts. You should go to people, talk to them, offer them your product, test this product on them, look at feedback, go back to your office, think about everything you saw, heard, what comments you received, refine your product and go back to people (this is the third principle – cyclicity).
3. The cyclical nature of constant product development. We made a product, tested it on potential customers, realized what needed to be changed, changed it, and went back to testing. And so on until you get a convincing answer from your potential customers that they are satisfied with everything, they like it, they share your thoughts.
Task: think about who you might ask, whose opinion you might be interested in, when you talk about your product, idea, or solution to a problem. Take a pen, paper, and make a list of 20 people you can talk to about your business idea.
The product life cycle. The user path
Very often, when an entrepreneur begins to study customers, the market, build a business, thinks narrowly about his business, in a very narrow area, does customer research, conducts analytics, etc. This is a mistake that does not allow you to see a huge number of opportunities that lie in the time interval when the client before he came to your office, and after he left you. There is a huge amount of advice on how to improve your business, distinguish it from competitors, and make it interesting for the client. How do you find these tips? If we recall the product-oriented approach, there is such a thing as the «Product Lifecycle»:
1. development
2. production
3. delivery to the point of sale
4. sale
5. transportation
6. Installation
7. training in the use of
8. maintenance and repair
9. dismantling
10. removal and disposal of the product
1. Production:
1) own product
2) product according to the customer’s documents
* The steps depend on the specific product
And if you follow this whole wide chain, you will see that in fact you could be useful to the customer both before installing your product, and after he decided to get rid of your product. Moreover, you can find places where you can earn extra money. For example, you can organize training for the customer to use your product. You can do it for free, trying to encourage sales, but you can do it for money. Imagine that you understand that there can be huge problems with the disposal of your product, you cannot just take and throw your goods out on the street, for example, fluorescent lamps, and they need to be disposed of in a special way. You may have the idea of expanding your own business or starting a completely different business related to the disposal of already old, used goods.
The user’s path – the actions and emotions of a person at all stages of the product life cycle. Where the customer was happy with the product, where he had problems with the interaction of your product.
Now, if you superimpose the «product lifecycle» on the «user path», you can be surprised to find the very places of growth of your business where the customer actually had some serious problems with the use of your product or service.
Task: try to suggest what doubts or problems your customer may have at different stages of using your product or service.
The answers can be the basis for making marketing decisions
The consumer matrix is another way to generate a huge number of ideas for your business.
The client:
1. Buys the product
2. Does not buy the product
It’s obvious. But why the customer buys or does not buy – questions that are more difficult to answer. This is what the consumer matrix is for.
There are only 3 options for why the customer uses your product (service) or not, and whether they use it at all. These are the reasons:
Task 1: Find all these six categories of people. Only customers can point out the advantages and disadvantages of your product. People of the first category, ask the question – «Why buy from us?» the arguments of these people will be the basis for communication with those who are still not your client, of two «Why not buy from us?» 3 – «Why buy a substitute product?», 4 – «Why don’t see the value in the product?» – these people will be able to point out the «weaknesses» of your product, of 5 – «Are there Any restrictions?» the answers these people can be the basis for marketing decision making, 6 «In which case the product will be relevant?» As you can see, the quality of the questions determines the quality of the answers. Answers are the basis of communication with potential customers.
You will have only two types of answers:
1. Positive
2. Negative
Also obvious. If everything is clear with the «positive» ones, then you need to work with the negative ones.
Task 2: Write down all the positive and negative reviews in a list, and next to each of the negative reviews, five solutions for how to fix these problems. Solving these problems will improve your product, and therefore increase the number of customers.
Consumer Research
We have only two opportunities to get feedback from people:
1. Interview: you ask questions, listen to answers, and take notes.
2. Observation: see how the customer uses the product, record it.
Task: to conduct 50 interviews, asking the following questions: «What suits you in the product? What doesn’t suit you? Why?» Structure the information you received from people. After the interview, thank the person and ask: «Can I contact you again?» Very often, people are very actively involved in the research process, and many of them begin to actively follow the development of the product, and are happy to become customers.
Your task is to «get into the skin» of the client and understand what prevents the client from starting to use the product (service) right now. When you ask questions, you should understand that a person says one thing, thinks another, feels a third, and does a fourth.
Your main task is to find customers and make deals with them. Therefore, you should know everything about the client: what he breathes, how he lives, with whom he communicates, what he is interested in, what he is not interested in, how he dresses, etc. Remember that customers bring money to the business; they should be the focus.
THINK LIKE A MARKETER
How to improve the efficiency of the business model?
Let’s go back to the Alexander Osterwalder’s template (I hope you filled it out). This model gives us much more opportunities, it can be used as a real analytical tool that allows us to look at our business and understand what it should be.
