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How would you know when is the right time for a business model change? Implementation of a core idea is not difficult. However, it is a challenge to adopt a value proposition and a new business model. The longer the wait, the vulnerable businesses become. Here are a few parameters that would help you to figure out when a business model change is required for your organization.
Not enough generation of traction from targeted customers
None of your customers would be bothered about the issues that you are trying to resolve. The customers do not care about the gains, pains and other issues you are trying to address. You have critical things to deal with when you are just setting up. Once you get some traction, you realize that it is not enough. You think of coming up with something to offer more. This is the time when you look for a business model change for diversification of the streams of your revenue.
When your value proposition is not resonating with that of your customers
This is when your customers care about your gains, pains and jobs but you are focusing on the wrong features of the product. This also occurs when you are not solving the issues of your customers appropriately. How can you create a feature that can impart value?
Your retention and acquisition strategy is not generating the growth
All your customer issues can be solved with value proposition. A problem persists when you have not found the appropriate medium for solving the issue. Figure out the issue by placing yourself in your customer’s shoes. What would you do when you end up investing more for customer acquisition?
Customers not ready to pay the price
Consider a scenario when your value proposition is being craved by your customers and you just found a critical issue to deal with. What would you do if they find the service or the product unaffordable? Would you lower the price or would generate a new revenue stream? How would you expand your market?
Threat by external forces to your business model
A wrong time would imply death of your business venture. When there a lot of competitors and when there are plenty of products available, you could be in trouble. Have you stepped into the market place early and people have to take time for adopting your value proposition? You need look for opportunities for stepping into promising markets that can promise you nothing but growth. What if the sales are declining in the market that you have just stepped into even though the segment is maturing? There is a need to figure out a reason for the decline in the sales and also to study what would the customers be willing to pay for. Political forces, laws and economic infrastructure when not in proper place can stop your business from succeeding. How can you leverage the opportunities that persist in the present environment? This is when a business model change is required.