2021 Resolutions, A Scorecard Last year I shared how I came up with resolutions to meet my business and personal needs in my blog post, New Year's Resolutions, Once More Unto the Breach. I broke my 2021 resolutions for 2021 into three areas and scored them as follows:...
In a meeting last week, one of my Vistage members discussed his expansion into a new business area and how to price his services. The way he described the new market was comprehensive. As usual in Vistage, this lead to a great discussion challenging his assumptions followed up with some excellent ideas. However, several of us, including myself, asked the critical question, “What precisely are you offering your clients.” I believe everyone needs to ask this question and drill down to the micro-level, because as a coach once told me, “You have to be famous for something!”
Why You Need to be Famous for Something
When I started my M&A business, I didn’t appreciate this concept, and our response to any question about what we can lead to the answer, “Yes, we can do that.” When starting, I am sure many entrepreneurs will take any business offered because they need revenue to survive. However, this dilutes the understanding of what you do to everyone.
People need to precisely understand your services or products and whom you serve to refer you business. If your definition is too encompassing or vague, they don’t know whom to refer to you, so they don’t.
What is the job to be done?
When thinking about what you do, I always return to Clayton Christensen’s “The Job to be Done.” As Christiansen says, people buy your services or products because they hire you or your product to do a job. If you or your products do a good job, they will rehire you. Here is a video of Christensen explaining the “Job to be done.”
So the critical question is, “What is the job to be done?”
When I ask CEOs, “What is the job you are hired to do?” I often get rambling answers as they cover all the things they do for clients. For example, I have had a CEO tell me that his company:
- implements software solutions;
- delivers timely reports;
- helps clients understand their spend on external consultants;
- manage relationships with external consultants, and
- the list goes on,
But is that the job to be done? I have challenged this CEO, “What do your clients Google when looking for your services.” What is the overarching problem they want to solve? We have all heard the statement, “No one buys a drill; they buy holes.” So if you are telling me all about the “drill,” I want to know what are the clients’ “holes” they need.
Today, I am a coach; however, what services do you think I offer given that role? The answer could cover any of the following:
- Life Coach
- Sales Coach
- HR Coach
- Financial Coach
So, I have narrowed the definition of my services and probably need to narrow them more.
“I am a growth business coach focused on working with CEOs and Leadership teams of companies with revenues from $5MM to $50MM who are looking to build a growth engine for dramatic profitable growth.”
I am working to refine it further to make it very clear what I do.
However, I do many things within that job description, including team alignment, strategic planning, understanding core drivers, and financial improvement, but they are all about “creating a profitable growth engine.”
Now figuring out what job your client hires you to do, is not always easy and can take a while working with your leadership team to get the answer right. However, the benefits are enormous.
It feeds Jim Collins’ BHAG.
In discussing your BHAG (“Big Hairy Audacious Goal”), Jim Collins says one of the things you need to identify is “What can we be the best in the world at?” Understanding this answers the old question of “Why do you exist?” and helps frame your passion. Without these answers, it is harder to develop your BHAG and set your strategic vision. With them, you get clarity for much of what you do!
People know what you do.
If you can easily describe what job you do, everyone precisely knows what you do and why they should use you or refer others to you. Also, when they hear someone discussing a problem or issue they are facing, they can easily understand if you provide a solution to that problem.
To frame this, think of how specialized medicine has become. Today we have oncologists who specialize in medical, surgical, and radiation solutions. The surgical specialist doesn’t do radiation. If you say you are looking for a surgical oncologist, no one recommends a radiation specialist.
You can find your Tribe.
A sales consultant told me years ago, “Find your Zebras.” He meant that if you were a lion, zebras were the best thing to eat. So who are your zebras? Where do you find them, and what are their identifying characteristic and behavior?
That is what I mean by finding your Tribe. Your Tribe is the collective group of your Core Customers which have specific characteristics. However, it is easier to identify your “Tribe” if you are specialized because by being specialized, you narrow the size of the Tribe. Once you know your Tribe, you can then start to determine:
- How they buy.
- Where they get information for their buying decision.
- Who are their influencers?
- What are their characteristics – size, revenue, budgets, etc.
With this information, you can now target your marketing towards them with a great deal of accuracy. You can ensure that your Brand Promise will appeal to them, and finally, any offers you make will entice the correct response.
If you focus on a “job,” you can do it well.
However, with that specialization comes increased skills, which leads to better recognition within the field. Keeping with oncologists, the radiation oncologist probably knows a lot about surgical oncology, but that is not “the job to be done.” With the focus, they probably attend many seminars and read journal articles on how to improve their services better. They become the best in their field and achieve better results.
If you cannot distinguish your services or products from the competition, you are in the commodity business, and with all commodity businesses, it is a race to the bottom in terms of price. So, you don’t want to be in the commodity business if you are selling services or manufactured products.
If done well, you sell “Value.”
If you are better than average and in the top quartile of the “job to be done” in your market, then the value you provide your clients is no longer based on the time taken to do the job but the value you provide. As discussed in How do you price your products and services?, once you deliver value, your pricing is now independent of time and materials but is based on the client’s BATNA (Best Alternative to A Negotiated Agreement) – what other options does the client have.
With value-based pricing, you can improve your margins and invest in maintaining your leadership position. Through Kaizen, you keep your leadership position and recognition as a leader in your market.
So what do what to be famous for?
Determining this often takes time and lots of work, but as I said above, the effort provides a massive return if the job is done. It helps to get a coach like myself, to facilitate the discussion among the team. However, whether or not you engage a coach, figure what you want to be famous for.
Copyright (c) 2021, Marc A. Borrelli
COVID has taken a toll on all of us. If you have not taken an extended vacation in a while where you disconnect, you need to now. You and your business will benefit.
I recently discussed how you must be famous for something. If you're famous for something it is easier to: focus on what you can be the best at, find your "tribe," tell people what you do, get referred, and define your core customer While we all know of companies...
Companies need cash to grow. If your cash conversion cycle is too long, you may not be able to finance your growth. Here is how to reduce it.
In a meeting last week, one of my Vistage members discussed his expansion into a new business area and how to price his services. The way he described the new market was comprehensive. As usual in Vistage, this lead to a great discussion challenging his assumptions...
Many businesses do not take full advantage of the value they offer to price effectively. Many struggle to price at a point that makes them a great margin. Here is a way to look at it see where you can price to improve your business.
I recently facilitated a workshop with several CEOs where we worked on the dramatic business growth model components. One of the questions that I had asked them beforehand was, "What is Your Profit/X?" The results showed that there this concept is not clear to many....
There is a war for talent. How do you attract talent to your company and have them apply for jobs there? You have to show why they should consider you, who you want, what you offer, and how your current employees feel.
Productivity remained during WFH with COVID. However, further analysis found that hourly productivity fell and was compensated for by employees working more hours. What was the culprit – Meetings. Want to increase productivity, have fewer meetings.
For those of you who are not aware of EOS, it is the Entrepreneurial Operating System. It seeks to improve businesses by getting six components aligned to enhance business operations. The six are: the vision the people the issues traction - meetings and goals...