It’s not enough to understand what makes your customers value your products or services. You also need to know how to put the following 3 Types Of Business Strategies into action—especially if you’re a small business owner. Value-based strategies help small businesses because they make customers loyal to your brand and encourage you to create products that solve customer problems.
- Driving Company Value Using Differentiation
You want to make your customers happy and loyal. You also want to stand out from your competitors. How do you do that? By creating value for your customers.
Value is what makes your customers choose you over others. Value is what makes your customers come back for more. Value is what makes your customers tell their friends about you. By understanding what your customers need and want, and by delivering products or services that meet or exceed their expectations. That’s the essence of a value-based strategy. And it’s especially important for small businesses, because they have fewer resources and more challenges than big businesses. Drive your company value and grow your business when you differentiate yourself.
- Focusing on Neglected Platform Participants
In Business Strategy, differentiation is not the only approach to consider, as focusing on the willingness to pay (WTP) of a consumer group that is not favored by a competing platform can also be effective.
For large organizations with multiple customer groups and subsets, establishing an ideal customer profile (ICP) and differentiating their product can be challenging. Instead, targeting neglected customers who are dissatisfied with their current options can be a successful strategy. To achieve this, businesses should prioritize the fundamentals of a value-based strategy: research the target market, gather feedback to address pain points, and build trust with customers.
- Catering to Small Groups of Customers
One potential strategy to explore is to target customers who place a high value on connection. This can lead to increased customer loyalty and advocacy, resulting in higher retention rates and word-of-mouth referrals.
eHarmony, an online dating platform, is an example that shows customers’ willingness to pay is often influenced by the number of members each site has. An increase in membership can lead to more competition among users, making it harder for people to find a suitable match and decreasing the perceived value of the platform. For instance, Match.com has lower membership fees but a higher number of users, which can lower the perceived value of its services. In contrast, eHarmony caters to a smaller group of customers, reducing the likelihood of them experiencing too much rejection. As a result, eHarmony’s customers are willing to pay a premium for a higher chance of success, helping the business thrive.
* Leads Resources can assist you in developing a program to help you re-evaluate your vendor relationships. Contact our team for more information.