Alan’s corner: Why companies must build their unique proposition

Over the last few months, I outlined the explanation for the first five of my 7-Steps to Profit. It’s worth refreshing your mind on them, as they set the scene for what I want to talk about today.

Step 1, define your North Star. This is your vision and mission that gives context for all to follow.

Step 2, refresh your culture. You need your entire team to behave in ways that are complementary to your North Star.

Step 3, your strategy which should be updated every year. This is followed by step 4, your structure. Your organisation chart is shaped by your strategy, giving clarity and improved accountability.

And last month, I described the importance of step 5, how to connect with your customer.

This now brings me to step 6, build your proposition. This is what your customers buy from you.

Of course most startups begin their journey at this step. In the context of my ‘7-Steps’, that may seem like the cart before the horse, but of course it’s not. It’s entirely appropriate at those early stages to start with a great idea. This is when the excitement and inspiration of the founder takes an early proposition to the market. However, as time rolls on, organisations should fine-tune and tweak their proposition. If not, there can be a mismatch between the aspirations of the owners and what is actually being sold. But I’d like to highlight a watch-out that often emerges. I feel there is often an over-emphasis in this region on price as if it was the most important factor in a deal.

Of course price is important, but is it really always about price?

I met a local business in Dubai recently that imports and distributes packaging materials within the GCC. The owner described to me the history of the company and the dynamics in its sector. As far as he was concerned, the only important issue was price, price and price again. Yet when we discussed the dynamics in his sector, there were other issues that were important to his customers, such as continuity of supply (never out of stock), quality, technical support and of course payment terms.

This organisation was missing a trick within its own abilities to achieve higher prices and therefore more margin. On that basis, I’d like to challenge you to broaden your thinking on what your proposition is made up of.

Fresh ideas to help you build your proposition
For a three-legged stool to stand upright, all three legs need to be in place. If one leg is missing, the stool will fall over. Worse again, imagine if two legs were missing, even an acrobat would struggle with that!

To be relevant and adding value, we have to think of the whole experience we give to our customers.

In this analogy, the legs of the stool are represented by product, people and place, with place referring to the physical environment (if you are a retail store or hotel) or to the route to market (if you are a B2B organisation). The three-legged stool is a very effective framework to use as a way of defining your proposition. It is simple and versatile, and will work for all businesses.

Next month, I will expand further on each of the 3Ps. I will share a checklist for each of them to help you broaden your thinking and to refresh your proposition.

The last word
As a result of strong SEO activity online, I receive regular enquiries through my website. Generally, someone might send an email or call us up with a specific enquiry. It might be for consulting on culture or strategy, or it might be for help with employee engagement surveys. I’m mentioning this to illustrate that these services are not straightforward. They are tailored to each client. Yet, in every single case recently, the first question we were asked is, ‘What will it cost?’.

This over-emphasis on price is endemic on the supply and demand side of trade. It is an obstacle to honest and transparent business deals. Of course price is important as nobody wants to be ripped off. But whether you are a seller or a buyer, I encourage you to take time to understand the proposition first, before you focus on price.

Alan O’Neill is a change consultant and speaker