Value Proposition

The hot topic coming from clients this week centered around sluggish sales. In evaluating the P & L's, we were able to confirm that YoY sales were in fact down so it was time to get to work and figure out what was causing sales to slow down.

Where do you start when diagnosing the reason for declining revenues?

At RBI, we use Strategyzer's Business Model Canvas as a foundation of Business Development as it allows for rapid adjustment in the business model. It can also serve as a diagnostic tool when we, as business owners, are not seeing the results we are looking for in our business.

When using the Business Model Canvas, we can zero in on the right hand side of the canvas to learn more about the customer facing aspects of the business. This helps us to diagnose those aspects of the business that are the cause of declining sales. The 4 areas we are specifically talking about here are:

•  Value Propositions
• Customer Relationships
• Channels
• Customer Segments

At RBI, we find that when we use a tool like Strategyzer's Business Model Canvas, it helps us create a systematic approach to identifying the root of the problem. If declining sales are the issue, it's likely that the cause is:

• a value proposition that this not clearly defined and realized by your target customer segment
  
• you haven't established the relationship
  
• your not communicating the right value proposition to the right customer segment
  
• your not using the right channels to reach your customer segments
  
• ​a combination of the above
  

While it is never pleasant to accept the following statement, sometimes it necessary to realize that the market has moved beyond the value proposition(s) your business model offers and the business model may not work. The value in using a tool like this, can be early detection, allowing you to adjust the business model rapidly before precious capital is thrown away, or worse, the business ultimately fails.