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Big Problems for New Business – So What? (Part 2)

October 24, 2011

Cases, Strategy Concepts, Study

In Part 2 of “Big Problems for New Business” we continue to analyze the new product business plan that I was asked to review recently.  We are studying this business plan because of the excellent examples of mistakes that it contains.  This is a great case study to see where pieces of a basic product launch plan have been poorly done; these examples will remind you of some important parts of successful business strategies.  As a side note, the difference between a business plan and business strategy is discussed here in another post.

In Part 1 of “Big Problems for New Business”, we focused the discussion on the target customer as described in my friend “Bob’s” new business plan.  The conclusion is that, right from the start, this product is in trouble.  The market for this product is the very broad “fitness” market and the product is targeted at nearly anyone in fitness.

Questionable Customer Benefit – Who Wants This?

So, here in Part 2, we’ll focus on the concept of “benefit” or “value” that the product is expected to provide.  Or, in other words, we’ll discuss how a potential customer might react to the product after asking themselves the questions “So What?” or “What’s In It For Me?”

Let’s suspend reality and assume that this business plan had a clearly identified customer – new mother, 6 months after new baby’s birth, trying to lose ‘baby weight’ with an aggressive exercise regimen that is not working as fast as she would like.  This really could be a customer; remember we learned that the product’s market is “fitness” and the product can benefit “anyone”.

If the woman above visits the website, she finds that if she purchases the new product she will:

  • Get optimum results
  • Be able to use her available time more efficiently
  • Get increased returns/results with the time she invests

Do you think that the woman described above will purchase this product after visiting the website (or seeing an advertisement or a display in a fitness store)?  Will she feel that this product is going to help her lose the extra weight?  If you were this customer, and you asked “What’s In It for Me?” what answer would you come up with?

For me, it’s just not clear what result will come from buying this new product.   There seems to be no real benefit.  And, the real shame is that we could describe any person into “fitness”, and we would have the same problem finding a real reason to purchase this product.

As discussed in Part 1, there were many different customers listed on the website, so let’s think about weight trainers or sprinters.  What are “optimum results”?  What are the increased returns?  When they read the words “use available time more efficiently”, they might think “I’m not looking for a time management product, I want to gain more muscle mass.”

I’m pretty certain that this is not what Bob and his LLC partners want to happen.

The lesson here is that if our product or business also lacks a specific customer and specific result for our customer, we will not be able to build a strong, long-term and sustainable business strategy.  We’ll end up trying to provide “something for everyone,” which will result in “nothing for anyone”.

What can you do now?

Assuming you havedone a deep assessment of your ideal (target) customer from Part 1 of this series, then take the following next steps:

  • Review the selling messages you use (even the words you use to explain your business to others).  How do you think your customer will answer the “What’s In It for Me?” question?
  • Now, go ask a few potential customers.  Find out how clear your product or business benefit is to them.

Please enter your comments on this post below.  Let me know the results of your own internal analysis of your customers and benefits (results!) you provide.

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