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Costs
What Does It Cost? We’re referring to the cost to the
customer, or the quantifiable price. Often, teams developing
new products or businesses focus on this factor but neglect
other components of the overall cost to the customer. In
assessing your value proposition, take the customer’s
perspective. Consider costs like changing the supplier
relationship, emotional cost, or career risk.

What Might Go Wrong? While setting the right pricing
strategy can be challenging and critical, people too often fail to
consider the range of nonmonetary costs to their customers.
Take some time to consider what risks your customer might
incur by doing business with you. Some critical risks may not
be obvious. For example, if your customer’s people need to
change the way they work to apply your offering, there might
be more risk beyond whether your product works or whether
your company delivers. Your customers could encounter
internal resistance, unnerved employees, and other such
results. Think broadly. If you’re unsure, call potential customers
and ask. It is important that you get this right so that you can
account for these costs in your business design. Clarity will
help your sales and marketing people after launch.

What Are My Costs of Making It Useful? Never forget your
customers’ implementation costs. Training? Reorganization?
Even issues as apparently simple as changing the way your
customer pays you might involve an administrative cost that
you might miss if you’re not careful. There could also be more
involved preparations or complementary technologies,
products, or services required if your customers are to garner
full value. Consider all potential costs for your customers, and
design your business to minimize or at least account for them.