We continue the series about Business Breakthrough; How to help business owners and managers restore their net operating profits while ensuring predictability and reducing stress. The first step on this journey is to realign your offering (your essential services and/or products) based on the state of your industry, environment and general operating conditions. Understanding how your market has changed and where it is heading allows you to adapt and stay ahead of the curve. This is the first principle of Business Breakthrough.
What is Your Offering?
Your offering is the products, services, or a combination thereof that you provide in exchange for money to your customers. Whether you operate in the B2B, B2C, Non-Profit, or government sectors, your offering is what brings revenue and funds into your organization. When business isn’t going well, it’s easy to blame staff, customers, or even yourself.
But think about your business as a pipeline trying to send nice clean water to those that need it. If the water starts off contaminated and does not serve the customer or patient or consumer or person in line in a way that creates an ease of running the business, then you have dirty water right from the start.
Even when business is good, revisiting your offering can reveal valuable lessons to enhance your outlook and potentially change it, making it robust as you expand into new markets.
Why Look at Your Offering First?
Focusing on your offering first helps you stay attuned to market changes and key value drivers. For example, as people age and gain financial security, they often shift from valuing low prices to prioritizing quality and support. Reviewing your industry segment’s changes, important values, and the buying process helps you understand how your offering meets the current needs of your changing customer.
Declining margins often signal a fading market segment, necessitating realignment to maintain profitability. Staying ahead of the market keeps margins positive and connects you with changing buyer needs. This continuous cycle ensures your business keeps up with market shifts, benefiting your business, staff, bottom line, and customers.
Achieving Positive Business Outcomes
Another way of thinking about realigning your offering is that it builds or reforms the foundation of your business. This realignment affects every part of your business from marketing, sales, operations, and finance. Starting with your offering is like sending a wave of positive solutions throughout your business (if done correctly). If not done correctly it can create chaos. This is one of the reasons why many managers hesitate to make the change. Why rock the boat when things are going well – seemingly? But ignoring the winds of change will eventually put you right in the path of the storm – and then you will be changing on the fly with minimum resources.
But understanding how changing the offering impacts a business is critical. For example, if an accounting firm changes from hourly rates to fixed fees:
A variety of marketing needs to communicate this change effectively.
Those who are responsible for client engagement and service must discuss the new structure with clients.
Everyone including every technology in the company needs to become more efficient by utilizing previously wasted time.
Not until all this and more is done will overall profitability increase, altering the mix of product offerings and how they’re managed.
The Importance of Understanding Market Shifts
Understanding market shifts and key value drivers prevents you from being blindsided by changes. Declining margins indicate a need for realignment, while strong margins suggest minor adjustments. Staying ahead of market changes ensures profitability and connects you with evolving buyer needs.
One way to understand where your market is headed is to conduct a traditional SWOT analysis focusing on your product/offering:
What are the most important Strengths?
What are the major Weaknesses?
What are some key Opportunities?
What are the main Threats?
Alternatively, you can just ask some questions about your industry and where things are headed like:
1. What kind of offering or product would devastate our business?
2. What trends or factors out of our control have changed our customers’ perception of what we and our competitors provide?
How have consumer values changed with consumers in our industry and what are the top 3 values they have now in relation to our offering?
Asking great questions is a proactive measure. If you would like a more complete list simply email me at sw@newviewinnovation.com. Alternatively, we can jump on a call for a few minutes to discuss the questions more relevant to your business sector. Simply book a free session with me here: https://calendly.com/stephen_e_wright/25min
Summarize Your Findings for Maximum Clarity & Direction
Once you have all this important information, distill the collected information, data, and ideas to gain a clear understanding of your current state and possible actions to know where adjustments are needed. This is crucial because it prevents premature conclusions and avoids getting overwhelmed by the information. Ideally you want to get to the root of the changes, so you clearly understand what is happening.
Realign Your Offering for Increased Productivity and Profitability
This final stage of realigning your offering involves taking decisive actions to adjust your product or service to better suit its current market position. By carefully crafting a realignment strategy, you can grow your revenues, enhance your bottom line, streamline operational execution, reduce stresses within the business and increase efficiency.
Whether you are creating a brand-new product or just changing the pricing model, following a product development roadmap is important to make sure you don’t skip steps that could negatively impact your business. Often time is spent on brainstorming, evaluation and testing but key components like review and internal training are often missed. As always, everything hinges on the implementation. Proper planning is crucial as poor execution can derail even the best strategies.
This kind of work is a big part in helping my clients take the next step of growth, and it helps that I just love doing it, so if you would like to talk further, please don’t hesitate to reach out.
Stephen E. Wright
Practical Business Growth Consulting