By Ismail Abdur-Rahman, CEO iVIBES
Have you ever found yourself on the Internet browsing through the seemingly endless listings of computer accessories while looking for...let's say...a wireless keyboard? How many are there? Hundreds? Good guess. So how in the world are you supposed to select one keyboard from the hundreds on display?
Well, for starters, you can try to narrow down the list to something more manageable - let's say 15 or 20. You might eliminate some of the available keyboards based upon factors that are personal to your consumer preferences: price, style, size, compatibility with other devices, etc. And after all that, you're still faced with the dilemma of choosing only one keyboard to purchase.
You see one keyboard that says it's got an ergonomic design - it'll help you work more efficiently by putting your hands in the most advantageous position for accessing the keys smoothly. This is particularly important to you because you've got some tendinitis in your wrist from playing tennis on the weekend. This one stands out, so you buy it.
Things work the same way when you are a service-based entrepreneur or a freelancer. You have to find a way to stand out among the many competitors out there, or you'll never get noticed, and even worse, you'll struggle to get the business you need to stay in business. You need a unique value proposition.
Porter cites two basic competitive strategies for businesses, irrespective of size or industry: low cost leadership and differentiation. Unless you have the capacity to realistically provide a good quality service at a price lower than the competition while still making a reasonable profit, I don't recommend that you start off with a low cost strategy. On the other hand, differentiating yourself from the other options out there is a more reasonable way to get the kind of clients with whom you can form life cycle relationships.
Think about that for a moment: life cycle relationships mean repeat business. And if you have made a reasonable attempt to incorporate vertical and horizontal strategies into your business model, there will be additional value add products and services you can offer after closing the initial sale. However, you first have to set yourself apart from the competition. Your unique value proposition might be related to a cutting edge technology integrated in your business model, a highly sought after product/service bundle, or a rare skill or knowledge that you possess. In this global economy, knowledge is becoming increasing important, so you will want to upskill periodically just to stay in the game. Keep that saw sharp!
I've had clients who hadn't paid particular importance to their UVP, and when I brought it to their attention, they retorted that they didn't want to brag on themselves because it felt immodest. I can understand that to a certain degree, but if you are an unknown commodity in a competitive market, you have to let customers know what makes you different - why they should spend their dollars on your service instead of someone else's. This UVP has to be part of your basic pitch, so ask yourself, "Why should this client hire me to fulfill their need?" Make it a compelling reason.
There are three basic components to a compelling UVP:
- The client must have a need for the service, or a natural desire for it. Trying to create a desire in the client for something they haven't identified already as a 'must-have' or a 'nice-to-have' is going to mean spending lots of time trying to 'sell' - time better spent servicing clients who have already committed to acquiring your service.
- It has to be a real value proposition. Simply enumerating your virtuous qualities won't amount to much, especially since most freelancers and solopreneurs will certainly recite the same trite list. Your UVP should be based upon the quality of the service you can provide.
- You have to deliver. As a matter of fact, you should make it a standard practice to under-promise and over-deliver. This is exactly the opposite of what many young freelancers and solopreneurs do, but for all the time you spend trying to build a reputation and develop a solid client base, it can all be destroyed in 5 minutes if you miss deadlines or deliver poor quality work.
Remember that in the early stages of developing your business or freelancer profile, every interaction with a client or a potential client counts.
If you want to know just how much each one counts, calculate what you would have charged the client for the basic service you're offering, then add the total of the additional services that you could have contracted with the client, then multiply that total by 5 to account for the number of referrals you could have potentially received from a satisfied client. Depending on your service offerings, that could easily amount to upwards of $50,000 of revenue through one satisfied client. Of course, you won't get that type of revenue through one client by using a low cost strategy. Differentiate. Find a way to stand out from the crowd.