We've all been led to believe that a solid business plan, complete with a genuine vision and values, is the secret sauce you need for business success. How wrong we were.

OK, if that's not the secret sauce, how about point of difference? Wasn't it Phillip Kotler or some other Marketing 101 guru who said that's all you need for successful marketing?

Wrong again.

The best visions and values in the world and the greatest points of difference won't mean a thing unless you've got something else in place first.

A customer who gives a sh*t.

A customer who cares enough about your product or service to hand over good money for it.

Without that, you've got nothing. Except for nice vision and values statements, that is. Many a company has gone down in a screaming heap after spending days, weeks, months meticulously crafting these statements and brilliant 198-page business plans.

Even a point of difference doesn't count if it's not a point of difference customers want or need.

What's the solution?

There are two - a VP + CS. Value Proposition and Customer Segment, that is.

The Value Proposition is something about your product or service that customers actually care about. The essence. The x-factor. The sharp end of how an organisation creates, delivers, and captures value. Call it what you like, but get it or perish.

The Customer Segment is not just any old customer, but the customer who cares most about your VP and has the most money to pay for it. Your most important customer.

Without a VP + CS, you may as well go home and go to bed.  

So next time you're embroiled in a business planning meeting, don't waste time discussing mission and goals. And don't waste oxygen by inviting the marketing team or the HR Manager.  

Invite the customer. Maybe not in person, although more and more companies do. Invite the customer as a kind of constant metaphysical presence that says, "I'm the guy who pays your salaries."

You see, the customer may be the most important person in the room at these meetings but, contrary to prevailing opinion, the customer isn't always right. The customer doesn't always know what he or she wants. In fact, he or she seldom knows what he or she wants until he or she actually wants it.

Which creates the problem of what your VP should be.

But don't worry. This isn't going to be one of those articles that, like your father or a teacher, tells you what you're doing wrong but doesn't tell you how to get it right. We wouldn't leave you hanging.

At this point, if you're thinking there's no point in reading further because your VP + CS are just fine, thank you - you may as well go home and go to bed right now. That's the kind of thinking that brought the Pony Express down. Yep, they were doing just fine until the telegraph came along. (And then the telegraph was doing just fine until the telephone came along. And then the telephone was doing just fine until... Anyway, you see where we are going with this.)

The solution if you ask educational psychologist Ryan Babineaux is to "fail fast, fail often". If you ask futurist Dave Wild*, it's rapid prototyping. If you ask Frank Robinson, it's MVP (minimum viable product). And of course, if you ask Alex Osterwalder, the inventor of the Business Model Canvas, it's his new book Value Proposition Design: How to Create Products and Services Customers Want.

We have another article coming out soon that deals with our own unique approach to VP + CS development. But in the meantime, if you would like to know more about the subject in general, here's a little light recommended reading:

The Customer Value Map V.0.8 - Now Called the Value Proposition Canvas
Fail Fast, Fail Often: How Losing Can Help You Win
The Fundamental Flaw in Creating Your Uniqueness (USP)
You can download the first 100 pages of the book Value Proposition Design: How to Create Products and Services Customers Want for free here.

There, told you we wouldn't leave you hanging.  

*  Dave Wild is Chief Futurist at Auckland-based consultancy Smith & Wild.

Need help with developing your VP + CS? Does your business model need a shot in the arm?

In our experience, it often takes a third-party to see opportunities in your franchise business that you just haven't been able to spot.

Contact us for a confidential discussion.

Article by Robin La Pere, No Ordinary Business and Franchise Consultants

Contact me at robin@noordinary.co.nz.

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Robin La Pere of No Ordinary Consultants has been working with disruptive new business models since Apple burst into the market with its unique personal computers. He was at the forefront of major new movements in the retail, financial and construction industries and has consulted to established businesses as well as start-ups on creating and renewing business models.  





"Robin had a significant and positive
impact ... on Signature Homes as a whole, as evidenced by the fact that our business became one of the fastest growing businesses in New Zealand, winning a Deloittes Fast 50 Business Award in 2003, seeing total sales soar by more than 500%."


          Gavin Hunt, Signature Homes