Tuesday, October 7, 2014

Strategic Planning Analogy #536: Three Questions (Part 1)

In the movie Monty Python and the Holy Grail, the group has to cross over the Bridge of Death. To cross the bridge, they first needed to get permission from the old man guarding the bridge. The old man only gives permission to those who correctly answered his three questions.

His first two questions were always the same:
            What is your name?
            What is your quest?

The third question varied, and included:
            What is your favorite color?
            What is the capital of Assyria?
            What is the airspeed velocity of the unladen swallow?

The third question was always silly and had no logical connection to why someone would be worthy to cross the bridge. But this was, after all, Monty Python, so what do you expect?

Crossing the bridge to seek the Holy Grail is a bit like a company trying to cross the bridge to the glorious prosperity of the future. As in the movie, one could not simply walk the bridge. No, one first had to get permission.

In the movie, permission came from the old man guarding the bridge. For businesses, the bridge to future prosperity is guarded by the consumers of the marketplace. If the consumers don’t like or want what you are offering, they won’t let you cross into prosperity.

In the movie, the old man makes his determination based on three questions. For businesses, they also have three questions they must answer to get permission to cross. We will be answering these three questions over the next three blogs.

To make sure you are pleasing the consumers of the marketplace, you need to ask yourself three questions. They are:

  1. What problem are you trying to solve?
  2. Why should the customer prefer your solution over the alternatives?
  3. What are you doing differently to prove your superiority?

In today’s blog, we will cover the first question. We will tackle the other two in the next two blogs.

1. What Problem are you trying to Solve?
In general, people do not spend money randomly for no reason. No, they spend money in order to solve a problem in their life. There are all sorts of problems in life to be solved, including:

a)     Basic Needs (hunger, transportation, electricity, shelter, etc.)
b)     Higher Level Needs (love, self-esteem, feeling needed, security, etc.)

This principle applies both to the B2C world as well as to the B2B world. Money is not spent unless the purchaser perceives they will receive a benefit that will solve a problem for them.

There are lots of problems out there to solve and you must choose which problem you are solving. After all, if you don’t know what solution you are offering, why should a perspective customer know? And if they don’t know, why should they consider you?

Solutions Vs. Products
Your solution is not what your product is. It is what your product does for the consumer. This distinction is very important, because many different products can be going after the same solution.

Take, for example the problem of weight loss. There are many products which claim to be a solution for weight loss:

a)     Exercise Clubs
b)     Food Supplements
c)     Food Replacements
d)     Surgical Procedures
e)     Hypnosis
f)      Home Exercise Equipment or Videos
g)     Personal Trainers
h)     Reducing the stress or self-esteem issues which cause binge eating

In reality, the customer really doesn’t care that much about the particular product. They care about the results. So they will pick whichever solution is seen as being the best value for solving that problem, regardless of what that product is.

So, if you are a personal trainer, you need to realize that your solution is not personal training, but weight loss and that you are not just competing against other personal trainers, but against anyone else claiming to create weight loss.

Not only can different products attempt to meet the same solution, but the same products can be going after different solutions.

For example, a high-end luxury auto dealer and an auto dealer who provides auto loans to people with bad credit are both selling cars. However they are offering totally different solutions. The high-end luxury auto dealer may be solving problems of self-esteem and pride. The bad-credit dealer is solving a problem of basic transportation for those with limited options.

These two dealers, although both selling cars, are not really competing against each other. The luxury auto dealer is competing against others selling self-esteem and pride, like luxury clothing dealers, luxury vacation sellers, the latest expensive high-tech gizmo, and so on. The poor-credit dealer is competing against bus lines, mechanics who may be able to keep the old car running, and others who offer credit to bad credit risks.

So don’t define yourself by the product you sell, but the solution you offer. Otherwise, you may get confused as to who you are really competing against in your attempt to cross that bridge to future prosperity.

Solutions Offer Direction
In addition to better understanding your competitive landscape, understanding your solution can simplify your strategic decision making. Pretty much every decision can be restated as a single question: Which option best improves my ability to solve my chosen solution? 

For example, if your auto dealership is trying to improve self-esteem, the design of the dealership, the type of salespeople you hire, and the sales pitch you use will all support this solution. They will reinforce the self-esteem agenda.

But this is starting to move into the next question, which is covered in the next blog.

Companies only win in the long run if the consumers in the marketplace support them. And consumers will only support companies if they see them as solving a particular consumer problem. Therefore, successful companies choose to position themselves around solving a particular problem.

Choosing the problem you are solving is not the same as choosing the product you are selling. After all, there may be a diverse set of products all going after the same solution (like weight loss). And there may be a single product that can be positioned towards more than one solutions (like cars). So, the decision is separate. You need to make the choice.

The key benefits of choosing your solution are:

a)     It helps you understand who you are competing against (those with the same solution, not those with the same product);
b)     It helps you know how to run your business (in the direction of better solving the problem).

Business success ultimately is not about me. It’s about the customer. It’s about solving their problems. The irony is that unless you focus on solving THEIR problems, you will never really solve YOUR problem (attaining business success). So make a priority of knowing which customer problem you are trying to solve. Otherwise, the customer will not let you across the bridge.

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