Have you wondered how to achieve ‘fit’? This article introduces the concept of business fit across three different levels.
Problem-Solution Fit
The first level of ‘fit’ is when you can demonstrate that your customers care enough about what you think they care about and what your solution intends to address.
For example, when Hilti, the construction power tool manufacturer, redesigned their business, they addressed their customers jobs and pains, such as meeting contract deadlines, power tool theft, tool repairs and penalty costs.
Then Hilti addressed these with gains such as predictable costs, no delays, replacement tools and access to the latest technology.
Product-Market Fit
The second level of ‘fit’ is realised when the products or services you provide to customers create value for them by relieving pains or creating gains.
There is a clear match between what you promise your customer and what they need; you have evidenced and validated the value.
For example, Tesla understood their customers ‘pain’ that the battery may run out, leaving people stranded from home.
So, Tesla also installed thousands of fast-charging stations throughout North America and the world enabling customers to ‘go anywhere’.
Business Model Fit
You have now validated the Value Proposition (Problem-Solution fit and Product-Market fit).
Business Model Fit is evidenced when you can take this value proposition and deliver it within a profitable and scalable business model that addresses the 9 fundamental building blocks – Customer Segments, Channels, Customer Relationships, Value Propositions, Key Activities, Resources and Partners, Costs and Revenue Streams.
Coming back to Hilti, they have changed their model from a tool manufacturer to a tool ‘fleet’ manager wrapped up in a range of benefits such as a fixed monthly rate, tracking technology, battery diagnostics, no costly repairs and loan tools.
Whether you are a startup or an existing business understanding your customer’s needs, providing solutions that address those needs and then delivering value in a well-tuned business model will get you business fit.
Hilti has a business model that creates, delivers and captures value for their customers and Hilti.