The struggle for prioritization between value proposition vs profits is real.
Can both be achieved for a business?
Founders frequently struggle with the dilemma of prioritisation between
Profits Vs Customer-centricity
Profits Vs Purpose
This dilemma is true for both d2c and omnichannel business founders. But it should not be a "Vs" or an "Either or" situation at all.
Short term profits are dependent on robust business model and
Long term profits are dependent on robust business model and appropriate value proposition.
So the question that founders need to solve for is:
Am I building for short-term or long-term sustenance?
The situation becomes a little more complex when profitability is compensated by external funds. But we are not discussing that today.
Customer value proposition vs profits is not a choice.
Business as an atomic structure
We drew a parallel from the atomic structure to illustrate how business model and value proposition need to work in balance when other components of business like the business systems and teams including the leaders are all aligned to a common vision.
Let's break down a business that has made the most of this balance. To illustrate these concepts, we can look at the exemplary case of Apple Inc., a brand that has successfully leveraged a robust business model while keeping its value proposition as top priority.
Nucleus of Brand Systems
The nucleus of Brand Systems comprises of
Vision
Business Model
Team & Culture
At the core of Apple's success lies a visionary nucleus—their commitment to innovation for making the best tech products. This vision, laid out by the late Steve Jobs and carried forward by subsequent leaders, has been the driving force behind the company's product development and market strategy.
Much like the positive charge and neutrinos in an atomic nucleus, Apple's unwavering commitment to pushing technological boundaries sets the tone for the entire organization. Their business model is built on a combination of premium pricing, a seamless ecosystem of products, services, partners and a focus on design aesthetics. This strategic blend not only ensures profitability but also creates a distinct market position for the brand.
In this same core, Apple's leadership teams, team and culture play the role of stabilizing neutrons, adhering to systems and processes that work to keep the vision alive. This systemic approach ensures that the business remains cohesive and resilient even in the face of market fluctuations.
The other force - Value Proposition
Adding another layer to this structure is Apple's customer value proposition, which acts as a binding force like the electrons in an atomic structure balancing the positive charge. Apple doesn't just sell products; it sells a lifestyle and an experience. The sleek design, user-friendly interfaces, privacy features and the promise of seamless integration across devices contribute to a compelling value proposition that resonates with customers.
Long term sustenance
Therefore, Apple's success is not solely attributed to customer-centricity. It's the meticulous attention to the economics of the business and the systems that were designed to keep the economics alive that strengthen their business model. For instance, Apple's ecosystem encourages brand loyalty, leading to higher life time value (LTV) through repeat purchases and a steady revenue stream. The company strikes a delicate balance between offering high-quality products that delight customers and ensuring the economic viability of its premium pricing strategy.
Of course, Apple is a large entity today so it looks like its lessons are difficult to replicate but Apple was also not built in a year or two. 47 years old now, Apple serves as a prime example of how a business can successfully balance customer centricity and a robust business model.
As outsiders and consultants, our role is to help you design and maintain the balance in your business, while your team continues to build in the trenches.
If you find this useful, subscribe to our newsletters to hear more about brand strategy, creative strategy and brand systems.
Comments