People love patterns, they like familiar things. We are creatures of habit and pattern.
When it comes to business, over time, people have come to expect to buy value in particular forms. The two most common forms are a physical product, and a service. However, there are 10 other forms as well. Once you master the 12 forms, you will find many ways to package your value in different combinations to reach and serve different kinds of people, price points and budgets.
Here are these 12 forms of packaging value:
1. Product. These are ‘things’ sold at a price. They could be physical or digital.
2. Service. Basically, doing something for someone for a fee.
3. Resale. Buy low usually in wholesale, sell high usually in retail. The idea of resale is buying low, selling high. For most consumers, this is uncommon, but for business-to-business transactions, this in itself is a value proposition.
4. Subscription. This is the recurring provision of value in exchange for recurring payments.
5. Shared asset. This is an asset that is accessed by many people at an appropriate fee, for example, a library, gym, park, hotel, and so on.
6. Lease or rent. From your point of view as the business, this is where you buy a long-term asset, and allow someone to use it for a short time in exchange for suitable payment. The customer sees value in this because, for example, they don’t have to buy a house to live in it, they just need to pay monthly rent.
7. Agency. This is connecting buyers and sellers for a fee. If you need something and can’t find it, and an agent helps you do so, that is value that you are willing to pay for.
8. Loan. This is lending out a resource and collect it back with interest.
9. Audience aggregation. Here, this is collect a group of suitable people together, then charge someone else access to that group. For example, Facebook charges access to it’s many users to advertisers in exchange for ad fees. The same goes for TV, newspapers and radio, which all collect an audience and then charge advertisers a fee to access that audience.
10. Insurance. This is the transfer risk in exchange for payment.
11. Capital. Providing money to a business or investment in exchange for equity and future earnings.
12. Option. Giving people the right to take a particular action within a specified time frame. For example, stock options give the right to buy shares at a fixed price before a certain date. Sports and movie tickets allow user to see certain movie by certain time. Options expire. The value of an option is that time-limited right to take an action you would otherwise not have been able to take.
To build and increase your business, ask yourself in how many of the above ways can you package your value.
Source by David Cameron Gikandi