Perception is everything. Launching a new business that delivers a product or service is exciting because as a business owner, you know that your winning idea is a slam-dunk. How could it not be? You have asked family and friends for their feedback and they endorsed your venture 100%. Perhaps some of those people may have even invested in your new business, which skyrockets your confidence into the stratosphere. Just think, if launching a successful business were that easy, we all would be wildly successful entrepreneurs and have no need to learn how to improve our products, services or businesses.
(1) Entrepreneurs are not in touch with their customers.
(2) Consumers don’t discern a difference between your offerings and what is already available in the marketplace. Your product does not have a unique value proposition.
(3) Business owners fail to communicate the value propositions to their market in a clear, concise and compelling fashion.
(4) There is a breakdown in leadership. That’s right – the founder is dysfunctional. He or she may have built an organizational culture that fosters secrecy, disorganization and non-cooperation. Each leader sets the tone for everyone in the organization.
(5) The entrepreneur lacks the ability to develop a profitable business model with proven revenue streams. Just because the head honcho thinks his idea is going to change the world, that doesn’t mean anyone else will buy into it.
Let’s say Chef Tom, executive chef at a famous area restaurant, is bored with his mushroom soup recipe. Even though it is one of Tom’s best sellers, he wants to “improve” it and thinks his customers will love it. When the rebranded “Chef Tom’s Mushroom Soup” made it onto the menu, customers tried it and hated it. Tom’s customers wanted to enjoy the soup they had been sipping for years, not something new! If Chef Tom had taken the time to ask his customers if they were tired of the old recipe, he would have known that he should not have tinkered with “old” soup. After two months on the menu and throwing out gallons of soup every day, Chef Tom brought back the customer’s favorite soup and it is back to being a best seller. Before he makes any future menu changes, Tom is going to ask his customers.
Now let’s meet a bookkeeper who takes pride in being a detail-oriented financial expert who never rushes through a spreadsheet. Sounds good, right? But, what if her clients have deadlines and want their financials turned over quickly; they don’t have time for a bookkeeper who checks his or her numbers three times to make sure they are correct. The bookkeeper will see her attention to detail as her value add, but the consumer will perceive the delay as a negative.
These two entrepreneurs are creative, talented and special, but they failed to identify their market, their customers and their ability to be successful. They all needed to conduct studies, focus groups and interviews to gain feedback on their products and ideas to better understand how the consumer will perceive them. The baker failed to consider his customers’ opinions when he added his secret ingredient and the accountant didn’t consider her clients’ value of timeliness over detail.