Value creation key to strong business
ALEX CAPULONG
The funny thing about value is that it’s only obvious after the fact. Why do people and businesses spend so much effort promoting their worth? Often, the less there’s to promote, the harder it’s promoted. Overtime, the exercise becomes too expensive and unsustainable.
Let’s look at businesses. There seem to be some that customers just flock to. Why? Because they’ve proven out their true value and made it obvious. Businesses are built on looking to provide value to the market such that customers are willing to pay. However, getting there is more difficult.
True insight into problems and solutions is tricky. Problems are sometimes easy to identify but the solutions are harder to come by. The reverse is equally possible. The problem could be extremely difficult to isolate but the solution is obvious. This is exactly why people are willing to pay when someone successfully matches both. That’s value. Simple, right?
Unfortunately, there’s a thing called competition. The stiffer it is, the more value a business needs to provide to capture the coveted market share. Thus, businesses must constantly strive to create it. Usually, new products or services are offered to complement or replace previous iterations. Sometimes, it’s done by working with partners to offer something unique to the market. It’s a step-by-step process that takes time and patience to see it come to fruition.
Of course, creating value isn’t enough. It must be communicated. Imagine a marketplace where everyone is screaming at the top of their lungs. Do you think it’s bad? It’s worse today. People are bombarded with information coming from everywhere. Think of yourself in that situation. How do you choose what to listen to? The loudest voice? What if the loudest voice turns out to be disappointing?
If you’re going to be loud about marketing your product/service, it’s important to remember that having the spotlight is a double-edged sword. There are many cases where marketing campaigns have brought in potential customers in droves only to disappoint them because what they got wasn’t the promise. It’s important for the communication to be in sync with the value. In some cases, the value is great but it’s poorly communicated resulting in poor sales. Either way, the result is negative.
Why are there more cases of false advertising and overpromising? It’s because it’s easier to fabricate a story than to produce value. Still, it takes the best storytellers to sell ice to an eskimo. So build value. It’s harder but the pay off is higher in the long term. The long-term value creation allows a business to jump exponentially rather than incrementally, crushing the competition in the process.
Which strategy would you employ? Are you planning to grind the business slowly up a hill or build a catapult to vault you over the mountain?
Alex Capulong is the strategic partnerships manager of First Circle, an online SME lending fintech startup focusing on trade finance for purchase orders and receivables. Feel free to contact him for questions or if you’d like to chat about your business problems particularly in supply chains. For more information, you may send an email to info@firstcircle.com or call 580-3200.
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