Top priority: Figuring out what makes you different
Why is it so hard for your B2B service company to differentiate from your competitors? If you want to achieve higher demand and margins, figuring this out should probably be your top priority.
If you struggle with low demand and margins, my guess is you don't have a crystal-clear value proposition for your customers nor the ability to consistently keep what you promise. The good news? It's never too late to start being clear to your customers about what problem you solve, for whom, and why they should choose you to solve it for them.
A meaningful value proposition is the result of choices. If you find yourself trying to figure out a value proposition that allows you the freedom to take on any problem for any customer, then you're doing it wrong. The clarity you're looking for will not appear without saying no to some opportunities.
Your value proposition has to be about them. The customers, that is. Too many B2B companies have bland value propositions that are not really in the interest of their customers. Does it describe your customer interaction, like the work process, your staff, or the tool you use for collaboration? Not quite there! Is it a description of your company, like your organization, your history, your values, or your intentions? Start over! Is it about your core capabilities? You still need to keep digging, but this can at least, with a dash of creativity, be translated into customer benefits.
Figuring out a value proposition with a snug strategic fit requires customer insight, sensemaking, and a bit of creativity. There are two main approaches: top-down and bottom-up.
The top-down approach starts with defining your target customers, narrowing it down to their most important problems (pain points or unrealized leverage points), then stating your (well-defined and different) solutions to those problems, and finally arguing clearly why these customers should choose your solution.
The bottom-up approach starts with making an inventory of your core capabilities, answering what you are truly really good at that your competition is not, then figuring out what problems these capabilities solve in a competitive way when uniquely combined, moving on to figuring out what customer segments have those problems, and finally arguing clearly why they should choose your solution.
Congratulations! Now you know what problems you solve, for whom, and why they should choose you to solve their problems for them.
The next step, which I wrote about in another article, is to continuously improve your delivery and become even better at solving these problems.
Anders Wengelin
CEO, Partner and Management Consultant
