Articulate your Core
So far, we have focused heavily on meeting the needs of a well-defined target customer. Now, you need to start looking to the future and determine: what is it about your business that makes it special? What is your secret sauce? What do you do that makes you better than anyone else at producing a solution for your customers?
If you’ve read any business or marketing books that date pre-2000s, you might have heard of the term Unique Selling Proposition (USP), which was an early concept in marketing from the 1950s developed by Rosser Reeves, a leading advertising practitioner, and advocated in his book Reality in Advertising.
We have since moved away from USP due to its various limitations and the fact that it predates modern thinking on strategy and brand positioning. Instead, we focus on your Core.
Your Core is something that allows you to deliver the benefits your customers value with much greater effectiveness than any other competitor. You are looking for that single thing that will make it very difficult for the next company that tries to do what you do. It could be a very small part of the overall solution, but without it, you don’t have nearly as valuable a solution.
Your Core also provides a certain level of protection, ensuring that you don’t go through the hard work to create a new market or product category only to see someone else come in and reap the rewards with a similar business of their own.
What is it that you do better than anyone else?
What is it that your product does that your competitors can’t duplicate or cannot duplicate easily?
Start with Your Value Proposition Canvas
Take a look at your Value Proposition Canvas from a previous week. How do you intend to deliver your Value Propositions — the pain relievers and gain creators for your customers — in a way that differentiates you?
Here are some examples of Core:
Network Effect: you become the standard by achieving so much critical mass in the marketplace that it does not make sense for potential customers to use another product. The value to the user of your product follows Metcalfe’s Law: the value of the network to any individual on that network is exponentially related to the number of users on the network.
Ex: Google for advertisers, Facebook, LinkedIn
Customer Service: you establish processes and culture that focus on excelling at customer service, which helps you retain customers at a very high rate as compared to competitors (and thereby avoid costly churn). Customers are thrilled with their experience with your product and are happy to create positive word of mouth. Ex: “no questions asked refunds”
Ex: Zappos, Nordstrom
Lowest Cost: you develop the skills, relationships, processes, volumes, financial overhead, and culture to outcompete anyone else in the market on cost, and you become the long-term low-cost player. It is facilitated by achieving economies of scale.
User Experience: you become the best at developing and continually improving the UX (User Experience) through your emphasis on user experience.
Intellectual Property: be careful here. The effectiveness of IP as your Core depends heavily on your industry. In the biotech industry, patents are incredibly important in ensuring success of a product or a new company. In other industries, there may be some value, but often patents are insufficient for ensuring business success. They tend to be static and markets are dynamic. Capability is generally better than a patent as teams with high levels of capability in an area will continually produce innovative goods.
Your Core should be clearly defined because it is what your business will continually work to develop and put first when planning and executing any strategy.
Your Core is your business’ defense against the competition, and it cannot be replicated easily by others.
(1) Define your Core. What do you have that your competitors do not? It’s something that you will protect above all else and will continually develop and enhance over time.
It can feel difficult and abstract, but it is an important step to maximize the value of your business.