In very simple terms, a business is just an exchange in value. As a business, you have value for your customer and as a customer, you have money to exchange for that value. The amount you get paid is proportionate to how much value you provide. So, as a business owner, you should be constantly asking yourself – “how could I provide more value for my customers?” because in turn, you will be paid more.
The question then becomes, how exactly do you provide more value? The answer is simple; ask your customers. This is a tried and true approach to getting better as a business person and yet I am continually surprised by how few business owners actually do it. A business model is based on addressing your customers needs and then making a decision about how far you are willing to extend that value – but how do you address their needs if you don’t know what they are? Having informed discussions about your customer’s wants and needs can inform your decisions about whether/how you want to extend your value. And it all starts with customer empathy.
You need a clear understanding of what issue your customers are looking to solve with your product, and then understand how to wrap your product or service around that issue with an empathetic viewpoint.
This is ultimately a design thinking process. You start with customer empathy (and you need to understand your clients needs at their core), and you build a product around that.
This is incredibly beneficial to do on an ongoing basis to ensure you are fundamentally addressing the needs of your clients.
An applicable concept to help tease this question out is called: value-led innovation. Value-led innovation is about evolving your offer based upon the value that it provides to your customers. That means, instead of just focusing on faster, cheaper, or “er” related marketing as we have called it, we are actually looking at the value that your offer gives to the client.
Once you have taken an empathetic viewpoint of what it is that your customer is trying to solve, the discussion that you have with them about how much value it provides them should be able to drive your insight into product development / innovation.
Value-led innovation starts with listening to the voice of the customer and manifests itself through ‘co-creation’ which sees you developing a product/service in collaboration with your customers/target audience. This makes targeting the right customers critical.
By understanding both the spoken and unspoken needs of your customers, you are in a good place to conceptualise, develop, and deliver the right solution to suit their need. In turn, this will also help you to embed your product and business deeper with the customer, increase brand perception, build trust, stickiness, and encourage peer-to-peer recommendations.
Value-led innovation breaks the shackles of a myopic and internally-focused view and opens possibilities in new markets as you will be led by your customer’s needs.
Given this approach is beyond your currently existing assets and capabilities and now governed totally by needs of the customer, we can go for a leap in value where competition is not the benchmark.
This fundamental shift and way of thinking results in an increased focus on sustained value and allows you to adapt to the constantly changing business and market environment.
To get to value-led innovation, we need to think of it as a mindset and process that is inherent throughout your organisational culture. As a result, value-led thinking needs to be part of the company’s overall strategy development as it creates operational, resource and go-to-market dependencies.
In summary, for such an important and foundational concept of your business and ultimate business success, we like to keep it very very simple and recommend:
- Talk to your customers on a regular basis and understand if your product is meeting their needs.
- Have an empathetic viewpoint when you talk to your clients, knowing they are trying to solve a problem or achieve something with the use of your product or service.
- Think in the context of value -ed innovation. For example, how far are you willing to extend your product or service, based on the value it provides to your customer? This could be new features, additional services, an on-boarding process or just an increase or change in the way you communicate.
It is important that this process and thinking is inherent in your business and considered on an ongoing basis. It is not a set and forget approach, it is something that should be constantly discussed and reviewed with your clients for effectiveness. This will ensure you are inherently addressing your customers needs and staying at the forefront of what it is that they require.