Welcome to Trep Tips! These are quick but informative tips that entrepreneurs (i.e. treps) can reap benefits from if implemented correctly. A great idea poorly implemented gets you nothing. A really good idea, skillfully implemented gets you everything.
Let’s jump in.
Since this is our inaugural tip, let’s start at the beginning with something any entrepreneur must do. A value proposition – it is a critical step in taking your good idea and developing it into a successful venture.
In simple terms, a value proposition is made up of three components:
- A problem or opportunity that your venture is addressing
- The promise (product or service) that the venture is making, and
- The price.
The moment you add price you go from a free promise to a value proposition. But is it the right value proposition? Does it present your product or service in a compelling way that customers will want? Like a basic algebra equation, you need to get every variable correct in order to balance the equation.
Common Mistakes and Solutions
The problem or opportunity is not clearly articulated.
You want to present your case in such a way that you will get agreement from the customer. The presentation needs to be clearly and succinctly shown so that the customer will agree that this is indeed a problem or an opportunity.
The promise fails to excite the customer and he or she doesn’t see the value.
You must structure the promise in a compelling and believable manner, so that the price is justified or even expected.
The price is not aligned with the problem or promise.
Make sure you take a long objective look at the first two parts of the equation –problem/opportunity and promise – when you are determining price and do your research. If there are competitors in your field, find out what they are charging for a similar service or product. Below is a diagram showing quality from low to high; and price from low to high. You want to land in the bolded boxes (i.e. premium, fair or disrupts market).
Questions to Consider
- What problem/opportunity are you addressing?
- What promise are you making?
- What is your pricing strategy versus the quality you are providing?
- Are you in a ‘bolded box’ or do you need to rethink a portion of your value proposition?
So that’s a value proposition. It is a simple formula, but it requires a lot of thought work and can’t be overlooked. It is a vital step for any entrepreneur to make before taking the next steps towards a successful venture.
Good Luck Treps!