The Startup Entrepreneur -Part 1

The only limit to our realization of tomorrow will be our doubts of today. Let us move forward with strong and active faith. Franklin Delano Roosevelt

The best leaders are those who have an in-depth understanding of their business and industry. Such leaders know everything about their own companies, their customers, their competition, and the business environment in which they operate.

This series "The Startup Entrepreneur" will help you open up and explore major strategic and management questions that need to be answered.Every startup entrepreneur should be able to answer these upcoming questions confidently. If for some reason, you are unsure or do not know the answers as yet, it is important that you find out as soon as possible. Without the answers to these questions, or with the wrong answers, you will make mistakes in marketing, sales and business strategy that can be fatal to your business.

In this first part of "The Startup Entrepreneur" we shall look at some important areas when it comes to serving our customers:

What business are you really in? What does your company actually do for your customer to improve his or her life or work?

Businesses exist because there are customers to serve. Customers do not buy products or services alone; they buy solutions to their problem and improvements too. They buy what you sell in anticipation of being better off in some way in the future. If this expected improvement is unclear or undesired, customers refrain from buying, or buy from someone else.

Keeping your customers satisfied with your product or service is non-negotiable. If customers are unhappy, they won't just leave you, they'll add salt to the wound, leaving you for one of your competitors, and the last thing any business needs after a blow to the wallet is a bruised ego. 

The role of marketing today is as much about delighting existing customers as it is attracting new ones. You want to make sure customers have a great experience using your product or service so they not only buy again, but ideally, spread the word through referrals or social media. 

"Loyalty is when people are willing to turn down a better product or price to continue doing business with you." -  Simon Sinek

What is the mission of your company or firm? Your mission should be stated in terms of what you want to achieve and preserve for your customers.

A mission is something that can be clearly defined and can be accomplished. It contains both a measure and a method. It is always defined in terms of your customer. And the simpler it is, the easier it is for your people to understand it and get behind it.

A mission statement is a key tool that can be as important as your business plan. It captures, in a few succinct sentences, the essence of your business's goals and the philosophies underlying them. Equally important, the mission statement signals what your business is all about to your customers, employees, suppliers and the community.

The mission statement may reflect every facet of your business: the range and nature of the products you offer, pricing, quality, service, marketplace position, growth potential, use of technology, and your relationships with your customers, employees, suppliers, competitors and the community.

Consider the statement one entrepreneur developed for her consulting business: "ABC Enterprises is a company devoted to developing human potential. Our mission is to help people create innovative solutions and make informed choices to improve their lives. We motivate and encourage others to achieve their own personal and professional fulfillment. Our motto is: Together, we believe that the best in each of us enriches all of us."

How do your customers talk about your company, think about your company, or describe your company to others? What words do they use?

This is referred to as your positioning in the hearts and minds of your existing/ prospective customers. The words that people use when they think about your company, and your products and services, largely determine whether they buy or not. The choice of these words cannot be left to chance. If you are not satisfied with the current answer to this question—with the words that customers are using today—then ask yourself what words you would want them to use.

What could you do to create this new perception?

Who is your perfect customer? Describe them, in terms of factors appropriate for your industry. How do your customers think and feel in relation to buying what you sell eg Desires, fears, hopes, attitude, expectations and objections.

You actually can’t “create” desire in the mind of your customer. You can only take desire that already exists and channel and direct it onto your product. From Eugene Schwartz in “Breakthrough Advertising” one of the best books ever on marketing & advertising…

“Let’s get right down to the heart of the matter. The power, the force, the overwhelming urge to own what makes your sales, marketing or advertising work, comes from the market itself , and not from the [sales] copy…copy (advertisement / promotion) cannot create desire for a product. It can only take the hopes, dreams, fears and desires that already exist in the hearts of people, and focus those already-existing desires onto a particular product. ” Clay Hebert, CrowdfundingHacks.com

What does your perfect customer consider of value? What benefits does your customer seek or expect in dealing with you?

Customers only buy when they feel that the benefits or rewards of buying your product will be greater than those they would receive if they bought from your competitor.

What does a customer consider as "value"? Value is personal. Like beauty, value is in the eyes of the beholder. To some value is quality. To others, it's service, support or ease of doing business. There are as many definitions of value as there are people to define it. However, value defined from the customer’s point of view is key to manufacturer’s / supplier’s success. 

A customer views value as “ value received”. It is the customer focused value and not seller focused value. It’s the customer’s problem, their money and a solution with which they must live. It’s the customer that decides what is value and what is not. 

Most people describe value in cost- benefit terms. They weigh the cost of something against its performance. If the performance is greater than the cost, it’s a good value. 

 Customers consider the effort they expend and resources they invest to acquire something. If what they acquire exceeds the effort and resources exchanged for its acquisition, the consider it a great value. As such the perception of value is subjective. 

As per Sales Guru Tom Reilly Price + cost + impact = value where price is acquisition cost, cost is total ownership cost and impact is what the product/service does for the customer. 

Perceived value and performance value influence the customer’s decision to buy or not. 

Perceived value: customers also perceive the value of a product. Perception is the subjective reality. It’s the qualitative features of what is being sold. It’s the style, brand name, reputation, packaging, and the sellers knowledge of the given product. Perceived value plays to the buyers senses and fuels their expectations. 

Performance value: Performance value is the proof behind the promise of perceived value. It’s the substance over style. Performance value drives customer’s satisfaction. 

One may get business by creating the perception of greater value, but one keeps the business through the performance of greater value It is not value until the customer says it’s value.

Love to hear what your thoughts are!