Coming Out of Crisis is an Opportune Time to Re-Assess Your Business Model
Part 2 : VALUE PROPOSITION
In this continuing series, we’re considering the need to re-evaluate your business model coming out of the COVID-19 pandemic. Many businesses had to pivot quickly in March of 2020. Whether it be implementing entirely different product/service lines, the pandemic was a major disruption across most business sectors.
Re-assessing your business model should really be done annually, but as we know, most business owners and CEOs get far too busy to dedicate time to this exercise on a regular basis. If there’s a blessing in 2020, it may very well be that the pandemic forced business leaders into this exercise.
A crisis can simply force your hand.
As we work through various aspects of a traditional business model structure, the challenge is to look for opportunities to improve profits, innovate, pivot, evaluate your competition post-crisis, review your value proposition, and consider your key resources.
In this segment, we’ll look at your VALUE PROPOSITION.
Simply defined, your VALUE PROPOSITION is the product and service “package” that creates value for a specific customer segment. Your value proposition solves a customer problem or meets a need, and is typically the differentiator for why a customer chooses you over a competitor.
So why might a VALUE PROPOSITION need re-assessment in a GOOD year?
- Changes in existing technology
- Emerging or new technologies
- Shifts in culture
- Changes in laws/regulations
- Innovation causing disruption in industries
This is just a short list … all of which will likely require a re-evaluation of your Value Proposition in order to remain competitive. Leaders who fail to see around the corner of major shifts like these, can find themselves at the helm of a dying business with not enough time to recover.
Even the best leaders didn’t see around the corner of the pandemic, though. So they pivoted, learned, pivoted again, and survived … some barely. The question is, if this was you, what’s your next step? How do you leverage the pivots in your VALUE PROPOSITION?
Consider these questions:
- What new set of needs did we have to immediately address for our customers?
- Will those needs (or some variation of them) still exist post-pandemic?
- How did we have to change processes or performance to meet those needs?
- What of those changes will still apply in the eyes of our customer after the crisis?
- What of those changes will still apply in the eyes of our team after the crisis?
- What of those changes will still be beneficial to our bottom line after the crisis?
It’s likely you were forced to make changes in your products/services/processes that directly impacted your value proposition during the crisis. It was done out of necessity and likely not part of the bigger plan. So the idea is to now step back and figure out what should come forward with you … formalize it into your plan. Make “what worked” part of your VALUE PROPOSITION. Think not only about your brand/status, but about price, cost reduction, risk reduction, accessibility to your products/services, and convenience/usability.
As you work through the exercise of re-assessing your VALUE PROPOSITION, start with what you had. Then think about how you pivoted and what you changed to meet the needs of your customer, as well as your bottom line, during the crisis. Then consider what will definitely (and possibly) still apply to the future of the business and your profitability. More than likely, you have a new VALUE PROPOSITION to leverage post-COVID19!
If you’re ready to take your business and leadership skills to the next level, and if you think your business could benefit from more insights like what’s offered in this article, let’s start a conversation. LXCouncil may be the perfect next step!