Brian Tracy breaks down business model innovation into two essentials: a product that solves a real problem customers will pay for, and a precisely defined ideal customer. Most new products fail because companies skip this clarity work.
One of the great questions if you're an entrepreneur or a business owner, is how do you keep evolving as a customer? Well, today they call this business model innovation or business model reinvention or business model regeneration. And what it basically means is that no matter what has happened in your past, your current business model may be partially obsolete in some places. In some instances, it may be completely obsolete. So what is a business model? A business model is the ability to generate profits. It's the process or system by which you create profits. Sometimes they call it the revenue model. So you have to ask, is your revenue model your business model working as satisfactorily as you want? How can you tell? It means that your profits and your sales are going up on a steady basis. If they are not going up, if they are leveled off, or if they are becoming unpredictable, or even worse, if they are declining, then you have to stop, take a timeout, and look at your business model. Now, the entirety of the business model is based on two things. First of all, your product. And your product is what we call a customer value offering, a cvo. What is the value that your product offers to your customer? Now, there's two critical ways to think. There's probably seven others. But let's talk about two. Number one, what problem does your product or service solve for a customer that the customer will pay you for solving? It is astonishing today how many people develop and offer products and services to solve problems that customers do not even believe that they have. And when you show them your solution and you say, look at this, they say, I'm not interested. Many companies will actually go to market and spend an enormous amount of money developing a solution for a problem that doesn't exist. This is why even with the best of research, marketing, and CUs and product development, 80% of new products fail every year, just like 80% of new businesses fail is they find that customers do not have a problem that the product or service can solve, or if they do have the problem, it is not big enough for them to take action or to switch from someone else. So it's really important to evolve your business is that you become very, very clear about problems that customers really have, and then you find a way to solve that problem better than anybody else. This is so important. You've got to solve one problem better than anyone else, and that acts as the core of your business. Now, here's another challenge is what we say is every product or service does a job for a customer. In fact, if you look at it this way, I think it's really neat is you say when you buy a product or service, you are hiring that product or service to do a job for you that you cannot do without it. So the question is always, what is the job to be done? What is the job that your product or service does for a customer that they will pay you to do for them? And you must be absolutely clear about what the job is. And you must be absolutely clear how important it is. So that's the starting point. The starting point is the product. It must solve a problem or do a job. It must satisfy a need or it must achieve a goal. It must do something that customers want done and are willing to pay for. The second part of evolving your business is the customer. Who exactly is your ideal customer, your perfect customer? The customer who more than anyone else, will buy your product or service immediately? What is their age? Their education? Their background? What are their goals and hopes and dreams? Here's one of the biggest questions of all. What role does your product or service play in their lives? Is it an important part of their lives? Is it an unimportant part of their lives? What difference will it make in their lives if they use it or not? And you must be absolutely clear about these. Many years ago, when I wanted to grow and develop as a speaker and as a person, I I began to order audio programs from Nightingale Conant. My first audio program just really opened my eyes because it was full of so many good personal development ideas. Since then, I listened to hundreds, thousands of hours of audio programs and every so often I'll come up with an idea that quite honestly is worth hundreds of thousands or even a million dollars. So how do you keep evolving as a company? You keep scanning the horizon of customers. You keep saying, what is it that customers want and need and are willing to pay for that nobody else is providing to them? And how can I provide that to them in an excellent fashion? If you can do that, you can stay on the cutting edge of your industry. Was this video helpful to you? What kind of products and services do you need to develop and offer to the market? Who are the customers that you're selling to today? Who are the customers you want to be selling to tomorrow? If you did, please subscribe to my channel where I'll give you exclusive content on sales, training, leadership, business and personal success. Visit me@briantracy.com and while you're there, sign up for my free newsletter. Sa.
