Potential: Revealed

Strategic Thinking, Innovative Ideas, Growth Marketing, and Revealing of Potential

What business are we in?

Following on from the previous post, and the second in this series on developing a “practical strategy”, there are five basic questions that can be used as a framework for building and testing the strategy for an organization. I will cover two of them in this post and the rest in a post or two over the next few weeks.

The first two are “what business are we in?” and “where is the market going?” These questions serve to both build upon the vision which was developed (described in the first post ) and to test it in a practical way. The thinking being: the vision has to not just read nicely and seem logical but you should be able to deconstruct it and determine its practical applicability.

For example, here’s a real-world vision statement: We help mid-size businesses improve their Pipeline-to-Profitability (“P2P”) cycle. Our business intelligence solutions are easy to use, offer immediate value and require minimal investment, using existing systems and data sources. For this company, it was a significant turning point to re-define their business in this way. Previously they were more me-too as a business intelligence software provider delivering custom solutions in the “small to medium” (SMB) market. This was a good business but to grow it and to develop efficient marketing strategy and execution behind it was actually difficult because “what business are we in? “ resulted in an answer that was too broad and undifferentiated.

Above I underlined some key elements of their new vision. Each of these were chosen carefully and were backed by analysis, discussion and judgment to test whether they gave clear guidance about what business are they really in and whether data could be gathered which indicated where the market was going. As a product and marketing professional, having clear sets of facts and decisions about these two elements is a big advantage – and too-often they are not clearly available as marketing strategy is developed.

I’ll discuss just a couple of the key elements of the new vision from above to illustrate:

Mid-size – depending upon the definition of “small to medium size (SMB) business” there are at least 6.6 million (and some reports put the number at 20+ million if you include part time, SOHO and cash-only businesses) in the U.S. There’s a fair amount of hype about the potential for pursuing and selling to this somewhat untapped and very large B2B segment. Some iterative analysis and pondering of readily available data on this market showed us that the larger revenue size (what we came to call “mid-size”) businesses were more readily identifiable (e.g., segmented into industry categories) and still represented a significant market (625,000 in the U.S.).

Pipeline to Profitability – the company had developed some good off-the-shelf analytics that could be used by sales management to better understand their sales performance and provide insight that can improve effectiveness and results. The sales cycle though is a generic concept and varies widely across businesses due to product mix, complexity, price, market segments and channels. Some study of the marketplace indicated though that the sales pipeline – the narrow set of sales steps used to move a “qualified” prospect through to final sale – was a universal issue and the heart beat of any sales process. It was also well-defined and lent itself to simple analytics that yielded significant (i.e., high value) insights. Most importantly it was generally poorly served in terms of linking the management of the sales pipeline to profitable outcomes. Most solutions on the market totally ignored this critical component.

Immediate Value – later on you’ll learn that this was the chosen “key differentiator”. Every business or organization needs a key differentiator – ideally just one (that is so powerful that if well chosen and executed it is sufficient) to anchor the focus of the business, including technology and product investments, marketing messages and delivery or supply chain operations, as those apply.  Much of what happens, or more accurately doesn’t happen, in business intelligence solutions and particularly in the CRM or sales arena is that value is not immediately delivered. Rather data (e.g., reports, alerts) is delivered slowly after much effort (and investment) and typically is not exactly (in form or content) what is needed by end users such as busy sales managers and executive managers. So rounds of iterations and alterations take place in search of the value and satisfaction required to ensure the solution will actually be deployed and used. This lag in achieving value – some call it ROI — and reasons for the lag are too numerous to go into here. It simply became clear that if value could be delivered “immediately” (the initial goal is within two days and long term goal is truly immediate) there was a void in the market and competitive differentiation could be clearly articulated and achieved.

Using these two questions in an iterative fashion is the best approach. Take each key element of the vision, ask: “what business are we in?” if we use that element. Then gather some external market data to ask further: “where is the market going?” relative to this key element – and you will rather rapidly shape, focus and finalize the business vision and also build up the fact-base behind it. This should give any business confidence that it is on the right track and once we are done with our five questions, should give the business confidence to pursue the entire vision with high energy and the proper amount of investment to achieve success.

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3 Comments»

  Where do we want to go? « Potential: Revealed Weblog wrote @

[…] is the third in a series on developing a “practical strategy”.  So far we’ve looked at two of the five basic questions that can be used as a framework for building and testing the strategy of an organization. The last […]

  adamgrizzly wrote @

At first I thought you were writing more about your travels! 🙂 But I see you are back to writing about strategy. LIke you I find that it is difficult to get beyond the vision thing with my company and colleagues. Breaking things down into steps is so helpful. You ought to be a teacher — better hours, less pay though.

Grizz

[…] carry on reading. Posted in Leadership Cancel […]


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