Define stakeholder – a person with an interest or concern in something, especially a business.
When looking for a new customer it is often helpful to take a step back and to look at the broader market and to identify who are the stakeholders in that market and then to look at how your product or service impacts each of those people, groups or organisations.
Let’s say that you are offering a service to the property market. At the simplest, it can possibly be there is a seller and a buyer and they exchange a property for cash (Watch for my next article discussing value exchange). There are only two (2) stakeholders:
There is the buyer and the seller.
The exchange of value is clear:
Cash in exchange for a house.
But there is more to a stakeholder than just being part of a transaction.For each stakeholder I ask three (3) questions:
- What is at stake? or What are they willing to protect/invest in?
- How does the stakeholder measure value?
- What are the stakeholders other “stakes”?
From our example, the Buyer could have a number of things at stake. The buyer could have their retirement planning at stake, they could have the future and security of their family at stake, or they could have their personal health at stake. All of these affect the way the buyer considers their current and potential future situation.
Equally the seller could have a number of things at stake. The seller could have their ability to invest in a new business venture at stake. They could have a huge debt that needs repayment at stake. Or they could have the wrath of their husband/wife at stake if they fail to sell the house!
As a business owner, you must understand not just who the stakeholders are in your market, but also what they consider to be at stake – and the magnitude of importance in protecting or investing in that stake.
But… most stakeholder lists aren’t so simpleIf we go back to our property example and extend the example to include a simple UK based residential transaction we could find a far more extensive list of stakeholders:
And then there are the adjacent stakeholders – the ones who are impacted by the success of the transaction: Removals Company, Utilities Company(s), Painter / Decorator Companies and others.
In most markets, there are a wide range of stakeholders, all of which are part of what started out as a simple transaction between two stakeholders: Buyer and Seller
It’s never as simple as it looks at first glance
When looking at a new product or service it is as important to look at the entire list of stakeholders in the market that you are preparing to enter. Once you know who the stakeholders are, then you can better identify which of these will be your potential customer. You can also identify which of them will be your competitor, your supporter, your detractor and which will be neutral or unaffected.
Have you taken the time to create a list of the stakeholders in your market? Do you really understand what is at stake for each of them?
And… Yes! I know the difference between stake and steak!