The experience around your business’ offer is a critical component to harbor sales and success.  We have been exploring the design of these experiences in previous posts here and here.  Check them out, if you have not, so you may be up to speed on the conversation.  We previously defined the key components that affect the experience one has with regards to your offer; now, we want to explore how these components interact and the different relationships within each.  All of this will amount to a much greater understanding of designing your offer and will simplify the process substantially as it is more fully understood.

Front Stage, Backstage & Component Interaction

Each component as revealed in the model must be well understood in relation to the value proposition and the intended experience.  Every business will exhibit a different relationship with the components.  One major factor with each component is the front stage/ backstage relationship.   Essentially, certain aspects of each component will be seen, touched, or handled by the customer while others will facilitate the experience without being seen.  The front stage aspects are those directly experienced by the customer. The backstage aspects include “behind-the-scenes” pieces that are critically necessary, however often not understood or recognized by the customer.  Many times, one does not even want their existence known to the customer as it may alter the experience in ways less desired such as over-complicating the experience or confusing a client.

Each component has this front stage/ backstage attribute, although in varying degrees depending on the experience design. In the service industries, for example, direct personal interaction may be more paramount, exhibiting a larger front stage than backstage.  That is, more people may directly interact with a customer than are behind the scenes in production and operations.  Individuals often fill a dual roll with certain front stage and backstage responsibilities.  With a product focus, you may have zero personal interaction before the sale, although you may have customer service afterwards.   In this case, nearly all teams are focused on backstage processes such as production, design, and administration.  We must be careful, however, to not overlook the intermediate experiences of the entire sales cycle including interaction with retailers and front stage interactions required to get your products on the shelf.

The other components also demonstrate a front stage/ back stage attribute.  Core processes will include the system or process a customer goes through to obtain the product or service on the front stage while production, creation and delivery processes all may be facilitated in the backstage.  Impact accelerators may include specific technology enhancements in the backstage or the packaging and look of the office on the front stage.

It is also important to understand how each component relates to and affects the other components.  What processes are involved with Teams or how do teams work within the processes?  How do impact accelerators enhance or detract from the performance of teams? This may include work environment and tools or production. How do these accelerators enhance the processes and how do the processes contribute to the delivery and production of the accelerators?  These are all important questions to ask as we continue developing the value proposition.

With your own offer, now that we have the components defined, answer the above stated questions regarding their interactions.  Feel free to share any insights…

We will continue discussing the USP Experience Framework by defining the components of the model more fully.  If you didn’t read the previous post, you may read it here to find out more on the framework. The key components are Teams, Impact Accelerators, Core Processes, and the value proposition itself.

Teams – This is the most self-explanatory component, which describes the human involvement with the value proposition.  The idea of having powerful teams behind a value proposition is old news however it is critical to understand how these teams and the interaction with the customer affects the experience.  This includes details such as how a receptionist greets someone or a store clerk asks you if you need help.  The teams must fully buy in to their position and designated responsibilities, especially if they interact directly with a client.  Getting the right people in the right places can completely shift the dynamic of the experience.

Impact Accelerators – This is a unique concept that simply describes anything requiring no regular, continuous human input that accelerates and enhances the impact of the experience.  Branding and design of the value proposition, websites and landing pages, even down to the smell, look, and feel of the store or office are included here.  These obviously take human labor to design and setup and even some level of maintenance but should not require regular attendance by a person.

Core Processes – These are essentially the systems and processes used to influence the experience and the other components.  The process a client goes through for a service or the system of production and delivery for a product are core processes.  Systemization of experience will ensure consistency while improving efficiency.  Without these, the experience will deteriorate and ultimately fail either due to confusion over consistency or out-of-control costs.

Value proposition – This is the centerpiece of the model and the area where most focus in product development.  It is the obvious component to the unique selling proposition. This is the answer or solution to the customer dilemma, your core product or service.  As a piece of the model, in this context it is viewed with the experience stripped away, in its simplest form.  Although ultimately you are selling the USP as a whole, experience included, in order to understand and define the USP, the value proposition must be stripped to down to the essential aspects that will affect the experience.  It is the end-result quality of the service or product.  In food, it comes down to the actual taste, simply the food itself.  After you’ve stripped away the presentation, the ambiance, the waiter and restaurant staff, what is left is the simplified value proposition, that which satisfies hunger.  In financial services, this would be the financial product or instrument, minus any brochures, smiling sales staff, or cordial planner in a fancy office with free coffee.

Next, we will explore the relationships among the components and how they influence the experience and, ultimately, the USP as a whole.  Let me know any questions you may have regarding the components! Also, begin defining these components for your business as they currently exist.  What is your offer? Processes? How are teams structured around your offer? What else may influence the experience such as your office, billboards, brochures, websites, phone systems, etc.

Designing your unique selling proposition(USP) can amount to be one of the most challenging tasks a business may undertake.  On the surface, it can seem simple and is typically the starting point of any business development, however, the fact remains that shortfalls in the USP design are a leading cause of ultimate business failure.  Typical approaches focus on the product values directly or the ability to provide the intended solution but often do not take into account the factors defining the experience surrounding the value proposition.  With a central focus on the long-term experience of USPs and the solutions they offer, many opportunities are revealed and proper strategy unveiled.  The realities of the marketplace response are revealed when this focus is understood.  People buy on much more than raw utility or even marketing hype.  The proper combination of these among other factors helps develop the USP more fully.  In many companies, the concepts around experience development are disconnected at best, and completely misunderstood or unknown at worst.  The USP Experience Framework has been developed to help us understand the relationship between the factors defining the experience.  By utilizing the framework in strategic analysis and development, in complement with other tools, the USP can be more fully defined and without too much “hit-and-miss” testing.

The USP Experience Framework

The framework is designed to focus on the value proposition(VP) and the experience that accompanies it.  The experience is intentionally designated within the empty, unenclosed space of the model. Ultimately, it is out of our control as a specific criteria, tool, tactic, or otherwise and is composed of the derivatives of the other components.  Depending on the VP, these other components will contribute in different ways to the experience, including the VP itself.  If the actual value proposition is shoddy, the long-term result of the experience will reflect that fact, although it may maintain during the early, short-term stages.

The initial step in understanding and utilizing the framework is to define the addressed problem, the VP, and the desired experience.  The experience must be understood from the eyes of the end-user or buyer.  For that reason, it is important to know to whom the experience appeals OR to whom we want the experience to appeal.  This may reveal the starting place.  You may start with an understanding of the experience and design the outward marketing for those this most appeals or you may start with a desired customer and begin to define the experience around the understanding of the ideal customer.  Ultimately, the VP, experience, and customer must all be clearly understood.  That knowledge allows for the other components to be designed to be congruent with the strategy.

We will explore this framework more fully in future posts, including what “Impact Accelerators” are exactly. This is part 1 in a multi-part series.  Let me know what you think of the concept!

Many entrepreneurs I run into on a regular basis are extemely “fly by the seat of their pants” type business owners.  They are “movers and shakers” and go from “zero to hero” rather quickly.  These types tend to grow faster than most and also run into substantial problems faster than most.  Growth is a “double-edge sword” if you are not ready for it… (wow, enough buzz phrases yet?).  I work closely with one that has built up and nearly lost it all several times!  Granted, the economy played some tricks on this person but how necessary was it? During the hot times, enough money was flying out of the business on hair-brained ideas to have likely floated the business through some rough waters if a more strategic approach had been taken.  The challenge faced by most of the “entrepreneurial faith” is when to say no to an opportunity or the next “shiny object” that will apparently make business double in no time. I’ve taken this bait enough times to be bigger than Deloitte if it were true. We tend to spread ourselves, our organizations, and our budgets too thin.

So what is the secret?

Well, it is important to first setup your business’ set of core values, mission, and vision. These are meant to be guiding lights within the organization and decision making processes.  Without real parameters, it is difficult to know when to say no.  But these alone can be difficult to judge by as each scenario is different.  Well, if they are built into a model-of-sorts that can almost decide for you, life gets much easier.

Enter the Business Model…

I would venture to guess that more than 9 out of 10 businesses have not put together a business model.  Now, naturally you have one (however poor it may be) just by doing business.  The fact remains that most entrepreneurs think through aspects of their business model but in a compartmentalized fashion, never putting all the pieces together in a more holistic approach. This model is meant to take most key aspects of your business and put them together to make sure they play well. It is also key to keep it relatively simple otherwise it becomes nothing but a fun, theoretical exercise in your final year of graduate school (fun being loosely defined).  The process of thinking through it will definitely bring a certain level of clarity but having a model you can use will transform the way you do business and make decisions.  It has also been said that a great entrepreneur with a mediocre model will fail while a mediocre entrepreneur with a great model will gain phenomenal success.

So what is a Business Model?

Well, it is define as follows by Alexander Osterwalder, in his book “Business Model Generation“:

A business model describes the rationale of how an organization creates, delivers, and captures value.

Their are a few key elements to consider when putting together your model.  I will list these here as they are the next step in your own design. Define these elements for your business.

• Value Proposition – what you offer to your customer, your product or service that creates value.
• Customer Profiles – ideal customer
• A revenue model – how you make money
• Distribution Methods – from value proposition to customer directly
• Fulfillment Process – from your business to value proposition
• Cost Structure
• Competition, competitive strategy
• Resource Management
• Value Network position – recognition of position in overall value network, i.e. from raw materials provider to partners to end users.
• Key Partnerships
• Core Purpose defined – mission, vision, and core values or principles.

I will elaborate on these points in future posts and unveil the construction of the model itself.  For now, begin working through the above mentioned points, defining them for your own idea or business. Once you have a workable model, you will be able to forge ahead with more confidence and surety that you are making wise business decisions.

The new year is upon us!  Thousands of bloggers are discussing new year’s resolutions and its a great time to set up goals, renew efforts and get back into the swing of things.  Renewal is powerful and what a better time than following a long holiday vacation, the rejuvenation there from, and a new tax year.  Which brings me to my point today!  What are some areas to remember in business while making your resolutions and starting out in 2010?  Lets list them out:

• Get organized! – possibly a more common goal is to get organized.  The opportunity to re-look at your systems and methods of tracking the stuff that needs to get done is one that should not be missed.  Look at the tools you use, the concepts and tenets you follow (i.e. GTD, 7 Habits, etc.) and the schedule (work, home, balance) you keep.  We will be unveiling a new system and tool to help with this over the next few months called Akomplish.  I’m excited for what it will do and the flexibility it will offer for you to live and work the way YOU want to.
• re-address your tax planning – With 2009 said and done, it is a great time to look at how you do taxes, bookkeeping, and financial accountability and tracking.  It will be much easier to start now than shift gears mid-year and cause confusion and chaos for yourself and your accountants.  Look at the past year and see what expenses could have been written off but were lost in the minutiae of living.  I know, I know, accounting sucks and is no fun (unless you actually ARE an accountant, then it might be okay to you although you also may not like it!).  The advantages of doing it right the first time and from the beginning will pay off, no doubt about it.
• 2009 in review – Take a look at what was done and not done in 2009.  What could you have done better?  What should you have done but didn’t? What bold moves do you wish you’d taken?  Well, lets do them this year!! How can this information and introspection be incorporated into your new year’s resolutions?
• Life Balance – Well, you work too much or too little.  You probably don’t have any hobbies but “family” or something cliche like that.  By the way, family is not a ‘hobby’, although important to you.  What do you do with them?  What can you do to unwind and breakup the life of work?  Having hobbies will prove invaluable as stress mounts from other money-generating areas of life.  For myself, I find this solace in photography, painting, mountain biking, and the like.  In fact, my wife would contend that I have too many hobbies!  Either way, having a good way to be productive without ‘work’ or pay (this does NOT include watching TV or wasting time) is an important part of balance.  Now, maybe you are lucky enough to do what you love for a living! Yay, hooray! I don’t care… find another hobby as well.  That doesn’t mean you quit loving work but you don’t want work to burn you out of loving it anymore.  For that reason, find a hobby!  Now don’t neglect your family for this hobby, again we are discussing BALANCE.  Maybe share your hobby with them or find some other way to balance.

Well, there you go.  Four points to consider with your New Year’s resolutions!!  Any other major points that we all ought to consider?