In any business one of the first steps of getting started is to evaluate your assumed value proposition. By starting with your value proposition you can quickly identify if the business you are imagining will be profitable.
At its core your value proposition is the question your customers ask before they buy anything: What’s In It For Me? (WIIFM). Once a user answers that question their motivation to act on your offer can be expressed as a simple equation: Motivation = Perceived Benefits – Perceived Costs.
So how does this apply to selling your courses online? For most companies selling educational products their value proposition breaks down into a few common types:
- There is a need for our products that is not currently being met so people will by our courses.
- Our content/instructors/reputation/technology is superior to our competitors so people will buy our courses.
- Our products are priced below the cost of our competitors so people will buy our courses.
- The market we are competing in is so large that people will buy our courses.
- We make receiving the training more convenient so people will buy our courses.
Once you have determined what you think your underlying value proposition is your next step is to validate it. Skipping this step can be catastrophic. Imagine if we build a business based on the assumption that people will buy our courses because they are priced below the cost of our competitors, only to find out we have priced our products higher than our competition. Or worse yet, what if we heavily invest in building content for what we feel is an underserved market, only to find out there is already a well-established competitor serving that market and the market is much smaller than we originally assumed.
Launching your initiative without it being a complete a roll of a dice requires you to do market research. You don’t know what you don’t know, and unfortunately what you don’t know could lead you to banking on a value proposition that won’t withstand the market’s reality.
For organizations with limited resources the most effective means of market research will involve researching competition by using online tools and talking to contacts in the industry.
As you start researching competition in the market what you want to look for is:
- Points of Parity
Features that are similar to your competitors.
- Points of Difference
Features that are different from your competitors.
- Points of Irrelevance
Things that are different from your competitors but don’t deliver value.
As you gain more understanding of your market you’ll be better positioned to validate if your initial hypothesis about your value proposition holds water. If it doesn’t, based on your research you should be better equipped to either pivot your value position based on what you have learned or make an informed decision to pursue a different business model.
In all cases exploring your value proposition before launching your business will save you time, money, and a ton of headache.