4 Questions Every Company Needs to Answer
We get many organisations contacting us each week asking the question “Can you help us find new business?” In order to answer that question we ask them all four straight forward, simple questions – However many struggle to answer!
In order to illustrate each answer to the 4 questions, I’m going to pick one of the simplest products in the world – Water. However we’re going to pick two completely different brands of the same product, Carrick Glen© sold by Lidl© and Pellegrino©™ from Nestlé©. The price point is dramatically different, Carrick Glen©, works out at circa 21cents per litre and Pellegrino©™ works out at circa €2 per litre.
Each product appears the same but on reflection provides different functions and solve different problems.
The 4 questions are;
1. What problem does your product or service solve?
In other words, what real world problem does your product or service solve or help to solve?
Bottled water appears to solve the problem of thirst; I need to quench my thirst so I drink water – True. However why does one product which costs 10 times the price of the other, sell in such vast number? I argue STATUS. A bottle of Pellegrino©™ sitting on the table at a dinner party says ‘I’m prepared to spend 10 time the price on one brand because it helps to re-enforce my social and economic status in society’. I argue that Pellegrino©™ helps to solve the problem of ‘Status Anxiety’ or how we are perceived by others.
‘On the other hand’ Carrick Glen© offers a good tasting, value for money alternative to tap water. We’re a bit biased in the office, as we’re all fans of Carrick Glen©.
2. What’s you value proposition?
Value proposition, is the promise of value delivered by your product or service, perhaps the return on investment – ROI. If I spend €1,000 ‘I better be solving a problem costing more than €1,000’.
Using our two brands I would think the value proposition for Pellegrino©™ would way out perform the value proposition of Carrick Glen© – Social status for €2!
3. Who is your target market?
What does your ideal client look like; type, turnover, industry sector, number of employees or perhaps something intangible like ‘early adopter of technology’. Chances are if an organisation or person has a problem, similar types of organisations or persons will have the same problem. A problem you can solve.
Using our example, the consumers of Pellegrino©™ probably fall into the ABC1 social grade (upper middle class, middle class lower middle class). ABC1 consumers are prepared to pay more for their food as compared to the people in the lower social grades. I have to say I’m not a lover of categorising people along these lines but its fact of life.
4. What’s your differentiator?
What makes you different or what’s your USP – Unique Selling Point. This is very important in a world where there’s so much competition, you need to stand out from the crowd or be heard above the noise.
Pellegrino©™ is not only ‘posh water’ but its ‘posh Italian water’, arguably it sits head and shoulders above the other waters on the supermarket shelf.
So there you have it, the 4 Questions Every Company Needs to Answer. I feel these questions are important for every company to answer but this is especially true of start-ups, as they struggle to establish themselves.