Last post for a while

This will be my last post for a while for VP of Strategy, LLC.  I’m happy to announce that I recently had the opportunity to take a full-time position with a truly phenomenal company that operates stores on behalf of outstanding cultural attractions.  I officially started in June and will be focused on east coast partnership development, so I will be relocating my family from Portland to Philadelphia in the fall.

During the past couple of years I have had the opportunity to work with several very talented people a from a number of impressive organizations. However, there were a few that stood out as particularly interesting, and worth keeping an eye on in the coming years…

–  a recently funded Boston-based company at the cutting edge of mobile performance monitoring

–  a medical device startup that I think will change the way we look at treatment for hip osteoarthritis

–  one of the Northwest’s leading technology staffing companies that is developing powerful software applications

–  a property development company from Portland that has found a growth niche in an otherwise challenging housing market

– a US based non-profit organization that provides medical and dental services to the remote mountain villages of the Himalayas


To the extent any of the above organizations align with your business interests I’d be happy to make introductions, and encourage you to research them on your own (see links).  And if you are connected in any way to the world’s greatest museums, aquariums, zoos, iconic buildings, or other cultural attractions, then by all means, let’s talk.  I will soon be updating my online profiles (LinkedIn, Twitter, etc.) to reflect my new career path.

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Strategy Article #7: Sales Strategy

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The Sales Strategy outlines the sales team’s strategic plan of attack to penetrate the marketplace and generate revenue, focusing on the long-term framework of the sales approach. The Sales Strategy provides a foundation from which the Sales Plan can be produced, which covers the short-term tactical plan for engaging the customers and making the sales process more efficient.  Both are heavily influenced by the company’s Growth Strategy and Market Analysis and should be supported by a Marketing Plan that delivers qualified leads on a consistent basis.

Sales Strategy Components Include:

  • Target Customer Profile
  • Prospect Segmentation
  • Sales / Distribution Model
  • Sales Process Definition (i.e. Sales Cycle)
  • Sales Funnel Calculation
  • Pricing Strategy
  • Up-Sell Strategy
  • Customer Training / Support Policy

Sales Plan Components Include:

  • Sales Materials
  • Sales Team
  • Sales Handbook
  • Sales Pipeline
  • Customer Channeling
  • Closing Techniques
  • Sales Forecast
  • Timeline
  • Budget


Sales Strategy Components:

Target Customer Profile

The first step in a successful sales strategy and plan is to develop a clear understanding of who you are selling to, and to communicate this to the entire sales team.  The Target Customer Profile identifies the typical person (or persons) in the core market(s) that the product / service is being sold.  Often times the person in the target organization that is feeling the pain of not having your product / service (and therefore generating interest in the product) will not be the same person who has the decision making power to approve the purchase, and this chain of key personnel should be identified in the Target Customer Profile.  Going through this exercise will enable a sales team to tailor sales materials, sales processes, and overall sales strategy so they can be streamlined to more efficiently get “buy off” inside an organization.  Key components to be defined in a Target Customer Profile include target markets, market segments, and roles / position titles of all those likely to be involved in a purchase decision.

Prospect Segmentation

Once the target customers have been identified and described, the next step is to segment the prospects so that they can most efficiently be approached by the sales team. Typically this will involve market research in various industry directories to identify the top prospects in a given market.  Although it will vary from industry to industry, in general the prospects can be segmented on two criteria:  Region and Quality. Generally, a regional territory will be assigned to a specific sales rep who may or may not be located in that region. Prospects are further broken down into quality based on size of the company or the potential business opportunity the customer represents, which will allow sales reps to prioritize more lucrative prospects.  As a rule of thumb, good sales plan should start with at least 100 prospects in each region (1000’s if possible), and the prospect lists will continue to grow as more market research is done.  Below is an example of a regional breakdown for North America.

Regional groupings break North America down into the following territories.

  • Northeast  (NY, PA, NJ, CT, RI, MA, VT, NH, ME)
  • Southeast  (DE, MD, DC, VA, WV, NC, SC, GA, FL, AL, MS, TN, KY, AR, LA)
  • Midwest  (OH, MI, IN, WI, IL, MN, IA, MO, ND, SD, NE, KS)
  • Northwest  (Northern CA, OR, WA, ID, MT, WY, AK, HI)
  • Southwest  (Southern CA, NV, UT, AZ, CO, TX, OK)
  • Western Canada  (British Columbia, Alberta, Saskatchewan, Manitoba)
  • Eastern Canada  (Ontario, Quebec, New Brunswick, Nova Scotia)
  • Mexico (All Regions)

Quality groupings for each prospect can vary considerably depending on the industry, but a simple and effective system is to designate three grading levels (A, B, C) with an “A” prospect representing the most lucrative prospect, “B” representing a mid-level prospect, and “C” presenting all other prospects that are big enough to devote a significant sales effort.  There should be a specific parameter that determines what quality grouping a prospect goes in such as annual revenue, marketing budget, number of employees, or some other industry standard ranking system —  but again, this will vary based on the industry and type of product / service offering.  Designating quality will help the sales team prioritize resources, and to set sales goals such as a target number of A level prospects per quarter.

Sales / Distribution Model

The key to selecting and building an effective distribution channel is selecting a distribution model than best enables your sales team to sustain a relationship with the target customer. The right choice of distribution model will be a function of Solution Complexity (how difficult the product is to install / deploy / use) and Marketing Complexity (how difficult the product is to source / buy / support).  In general this involves a decision about whether or not to use intermediaries to the sell the product, an how much “hand holding” a typical customer will need to make a purchase.  Most industries already have prevailing distribution models, which will usually be the right choice from which to start. The chart to the right maps out different distribution model options based on the marketing and solution complexity criteria.

Sales Process Definition (i.e. Sales Cycle)

The Sales Process refers to a systematic approach to selling a product. It relies on defining the continuous step-by-step process (a.k.a. “The Sales Cycle”) that the sales team takes with each lead  —  from the initial contact with the prospect to the close of the sale and payment for goods. The goal of breaking down and defining the steps is to provide a framework for tracking sales and understanding the status of every sales prospect at any given point in time.  It also helps to identify inefficiencies in the system so that sales managers can take action to improve the conversion rates for each stage, resulting in a quicker Sales Cycle, more total sales and increased revenue.  The Sales Process / Sales Cycle will be different for every industry, but typically will break down as follows:

  • Contact Prospective Customer Account
  • Establish Customer’s Interest
  • Send initial sales materials / marketing collateral
  • Qualify the lead (prospect’s ability to purchase)
  • Product demo (live or via web conference)
  • Product trial
  • Overcome objections
  • Negotiate pricing
  • Formal quote / proposal
  • Close sale (Customers signature on Term Sheet)
  • Invoice / receive payment

Sales Funnel Calculation

The Sales Funnel Calculation is a mathematical model for estimating the number of “unqualified leads” that will be required to be brought into the sales cycle and converted into sales in order to reach a sales team’s revenue targets.  It’s also a valuable tool for providing a benchmark for sales managers to gauge the success of their team’s performance. An unqualified lead is a cold lead  —  that is, a prospective customer that should reasonably be interested in the product, but has not yet been contacted or otherwise indicated interest in the product.  These leads become more “qualified” as they pass through each stage of the sales cycle until they finally turn into closed sales.  However, there will naturally be some percentage of attrition of these leads at each stage of the cycle.  The trick is to estimate a reasonable amount of attrition at each stage, track the sales team performance, and then adjust these estimates for accuracy as more data on sales conversions become available. The ongoing objective is to take steps to continually improve the conversion rates for each stage of the sales cycle by continually refining the sales process.

The example Sales Funnel Calculation below is for a fictional product “(i.e. “Widget”) sold in a B-to-B model.  For the sake of the example, we’ll make the following assumptions:

  • The retail price for the Widget is $2,500
  • The average B-to-B account order is 4 Widgets
  • The target sales revenue for the year is $10 Million.
  • Sales will gradually increase each quarter of the year
  • Attrition for each step of the sales cycle is listed in parenthesis
  • Re-orders from existing accounts make up 40% of sales for the year

We’ll use the spreadsheet below to determine how many unit sales will be required to reach the $10 Million revenue target, but also how many “unqualified leads” will need contacted and brought through each stage of the sales cycle by the sales team.  This will provide sales managers with a benchmark of leads to contact for the year, as well as a typical quarter, month, week and work day. The key is to set up the formulas for each cell so that adjustments are made to the “units ordered” until total revenue matches the target goal.  Download and example Sales Funnel spreadsheet sheet here.


Pricing Strategy

Pricing is one of the major elements of the “Marketing Mix” (along with Product, Place, and Promotion), and it is critical to positioning the product / service —  both in minds of potential customers, and relative to the competition.  Determining the right price a company’s range of products / services is an inexact science, and while there are several standard pricing models to consider, there are a number of factors related to any company’s specific situation that should be considered when formulating Pricing Strategy.   See common factors affecting pricing strategy, and list of standard pricing models below:

Factors Affecting Pricing: In general, the goal for pricing products / services should be to price them as high as the market will bear, however this is not always a clear cut decision, and there are a number of factors to consider that may make strategic adjustments to this theory critical to long-term success.  Consider the following…

  • Positioning:  Does the company have enough perceivable product differentiation / competitive advantage to price higher than the competition, or will slightly under-cutting them in price be a faster way to build market share?
  •    Demand / Price Sensitivity Are the target market customers price conscious enough to pick one competitor over the other based solely on price, or are they willing to pay a higher price for a product they like a little more than a lower priced alternative?
  •    Cost:  Calculate an estimated “cost per customer” based on all fixed and variable costs (cost of goods, overhead, etc.) that go into delivering the product / service.  In order to turn a profit you must price high enough to cover your “cost per customer”.
  •    Competitive / Environmental Factors:  What does the market expect your pricing to be?  That is, what is “average” and how will pricing higher or lower than the competition affect marketplace perception?
  •    Revenue / Profit Maximization:  Based on revenue and expense projections, does your pricing “pencil out”. 

Standard Pricing Models: The following is a list of Standard Pricing Models.  Before selecting one (or a variation / hybrid of one or more) the factors listed above should be considered.

Up-Sell Strategy

Up-Sell Strategy refers to a systematic plan for increasing the average sales revenue per customer by employing a variety of techniques to get the customer to buy more than they had originally intended.  This can be in the form of selling more expensive items, upgrades or add-on products and services. Up-selling is one of the easiest ways to increase total sales revenue, however there must be a plan in place to maximize up-selling opportunities, and it will be different for every industry and every kind of product / service.  The following are standard up-selling techniques, most of which can be customized and refined for most selling environments:

  • Offer complimentary products at point of sale
  • Offer additional services at a discount
  • Offer bundled products at a discount
  • Offer a chance to purchase upgraded version of the product
  • Offer extended service contract
  • Offer “premium support” option
  • Quote optional products / add on modules in final proposal which can be purchased at a discounted rate for a limited time
  • Offer a free analysis of different areas of their business and recommend additional products/ services to remedy problems.

Customer Training / Support Policy

The training and support of a company’s product / service offering should be seen as a vital component of a company’s sales strategy.   The number one goal of an effective training and support system is to provide outstanding training and support.  This is not only a way to make customers happy, but also a way to differentiate from the competition and generate new business through referrals.  The flip side is that poor training and support will quickly damage a company’s reputation and have the opposite effect.   In addition, an effective training and support system will reduce internal work load by cutting down on redundancies and providing self-help mechanisms for customers.  Finally, a company should strive to make support and training a source of revenue by charging a fair price for excellent service.  The following are common elements of an effective support and training system:

  • Knowledgeable support / training personnel
  • 24 hour service
  • Quick response time
  • Effective support ticketing system
  • Comprehensive Product Documentation
  • Online Knowledge Base website
  • Video tutorials
  • FAQs and best practices information
  • Customer Forum

For details on Business Strategy and  DAM / ECM consulting engagements, or contract enterprise technology sales engagements with VP of Strategy, LLC, explore this website, or contact Scott M. Eilers to set up a free consultation:    971-269-5021

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Northwest quickly becoming global hotbed of mobile development talent

When Mobile Portland (an offshoot group of  Mobile Monday) started its monthly meetings less than two years ago, it was an inspired, yet humble beginning.

“I think we had about 12 people at our first meeting”, quipped Jason Grigsby, the Mobile Portland panel moderator, and recently published co-author (with Lyza Danger Gardner) of Head First Mobile Web, a developer’s guide to mobile strategy. Those early gatherings have consistently grown each month, and if last nights’ gathering of 250+ mostly developer-types who packed Urban Airship’s makeshift auditorium are any indication, the state of mobile development talent in the Northwest is strong and rapidly growing.

In addition to the free micro-brews on tap, the Monday evening after-work crowd came to see why WalmartLabs, (the Silicon Valley-based digital technology division of the world’s largest retailer) was setting up shop in town via an acquisition of Portland mobile development shop Small Society.

The evening started with an introduction by Grigsby and then an open mic session of “who’s hiring”, in which reps from several companies ranging from small development shops to Intel confirmed that for talented mobile developers, there is no recession.

The evening’s presentation started with Ben Galbraith and Dion Almaer of WalmartLabs, who took the stage to talk about their career paths, the evolution of the Mobile Web, why industry giants like Microsoft and Walmart see mobile as a fundamental shift in the rules of the game, and finally, what drew them to Portland’s developer scene and why they plan to stay.

Next on stage was Raven Zachary and James Keller, formerly of Small Society and now part of the WalmartLabs team.  Small Society has developed apps for the likes of Starbucks,, and Zipcar.  Before that Keller  was an Interactive Strategist at Wieden + Kennedy, and Zachary was best known for being on the team that produced the Obama ’08 iPhone app for the 2008 Presidential election.

A theme echoed in both presentations was the recognition of Portland as a mobile development hotbed of talent.  There seems to be a disproportionate critical mass of highly qualified engineers in the mobile space compared to other cities, especially considering it’s relatively small size.  It’s for this reason that a trend is emerging of technology giants looking to open satellite offices, move people to the city, or hire Portlanders to work remotely.

As the home of Amazon and Microsoft, Portland’s neighbor to the north, Seattle has always been globally recognized for it tech talent resources, but is experiencing its own resurgence in activity around mobile development.  This, among other related topics will be explored on Feb. 8th at an event called “London Calling” sponsored by the British American Business Council, Millernash and Seattle Mobile Monday . They’ll  will discuss the challenges and opportunities in the mobile space for companies doing business on both sides of the pond.  It features a keynote presentation by Mike Buhrmann, CEO of Finsphere, followed by a panel discussion featuring executives from Microsoft, ViaFo and Matchbox Mobile.  Check it out.

Other recent / notable stories about the Northwest mobile development scene:

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Strategy Article #6: Business Plan Methodology

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The Business Plan Methodology refers to a step-by-step framework for creating a Business Plan that maximizes the use of an organization’s resources in pursuit of it’s objectives. This methodology is presented as a series of phases for addressing key Business Plan components, each of which are critical to complete before moving on to the next phase. In general, the methodology starts with a statement of the identity, objectives and basic company information. It then flows through phases of analysis components, then strategy components, and finishes with tactical plan components. As a general rule, each component of the Business Plan should be 1 – 2 pages in length. A common mistake many organizations make (aside from not using a regularly updated Business Plan) is skipping critical early phase analysis and strategy components, and going right to defining later stage tactics like the Marketing and Sales Plan. The result is a disjointed Business Plan that is missing key components, has conflicting strategies, or pushes the organization in directions not suited to its objectives or current position in the marketplace. The eight phases of the Business Plan Methodology are outlined in a visual graphic, and then explained in detail below.


Company Profile

The Company Profile is a brief statement of a company’s identity and objectives, and the starting point for putting together an effective Business Plan. Two of the most important components of a Company Profile are the Mission Statement and Elevator Pitch. The latter is the official quick answer to “What does your company do?”. It should be a brief, yet descriptive phrase that will explain the company’s general purpose. The Mission Statement, is a more eloquently written “raison d’être” (i.e. reason for existence), that should capture the value the company is providing to the marketplace, and be the foundation behind the decisions and direction the company takes in the Business Plan. Additionally, a Company Profile will typically include basic company info such as date of incorporation, type of entity, headquarters location, annual revenue, names of and backgrounds of founders / key management, and number of employees. It can also include brief descriptions of the product / service offering, company history, a summary of notable recent activities, or a short list of core business objectives, although less detail is provided in a publically available Company Profile than one written for an internal Business Plan.


Situation Analysis

The Situation Analysis is an investigation, study and assessment of an organization’s internal and external environment, with the objective of defining the firm’s position or “general state of things” with respect to the market that it operates in. It draws off of the identify statement and objectives presented in the Company Profile, and is usually comprised of a SWOT Analysis, Marketing Mix Analysis, and a 5 C’s Analysis, but can also include a variety of other assessment models (see Marketing Strategy section) depending on the industry and maturity stage of the firm. An effective Situation Analysis will use these tools to make an assessment the current situation and forecast trends. It will be the foundation for developing the other analysis components of the Business Plan (Market Analysis, Industry Analysis, Competitor Analysis), and be reflected in all strategy components as well.


Market Analysis

The Market Analysis is an investigation, study and assessment of a market that a firm plans to sell products or services in. The goal of a Market Analysis is to define the market based on a variety of factors and determine it’s current and future attractiveness for the business. It draws off of the Situation Analysis, and is similar in that it will help to understand how the market’s evolving opportunities and threats relate to the organization’s strengths and weaknesses. Typically the Market Analysis will focus on market size, market segments, market growth, market profitability, industry cost structure, distribution channels, and market trends. An effective Market Analysis will define the target market (and market segments) the business plans to compete in, help identify Strategic Positioning / Competitive Advantage. It will be the foundation for determining the Marketing, Sales, and Business Development / Partnership Strategies, and help determine the tactics presented in the Marketing and Sales Plan.

Growth Strategy

The Growth Strategy is a long-term strategic direction for sustained growth of an organization’s revenue, product / service offering, and talent (people). It is comprised of broadly defined business strategies designed to move the organization through a series of phases defined by target goals or milestones related revenue, product / service offering, and talent. An effective Growth Strategy will be determined after a thorough Situation Analysis, comparison to standard business growth models, and comparison to historical growth strategies of successful organizations in similar industries or business environments. The Growth Strategy should be a guiding force behind the other Business Plan strategy components (Marketing Strategy, Sales Strategy, Business Development / Partnership Strategy). A good place to start when determining a Growth Strategy to pursue is the Ansoff Product-Market Matrix. This is a standard Business Plan tool that provides four common Growth Strategy options by analyzing the relationship between Products (existing and new) and Markets (existing and new).

Competitor Analysis

The Competitor Analysis is a “core discipline” component of an organization’s Competitive Strategy (the other two being the Industry Analysis and Strategic Positioning) that provides a methodical approach to defining the competitive landscape. It is an investigation, study and assessment of the current and potential organizations a firm expects to compete with in a particular market. The objective of Competitor Analysis is to develop a profile of each competitor, the likely strategy each one will pursue in the marketplace, and their likely responses to industry changes. An effective Competitor Analysis will draw off of a thorough Situation Analysis, help define Strategic Positioning / Competitive Advantage, and lay the foundation for determining an appropriate Competitive Strategy that will be reflected in all the major components of the Business Plan.

Industry Analysis

The Industry Analysis is a “core discipline” component of an organization’s Competitive Strategy (the other two being the Competitor Analysis and Strategic Positioning) that provides a methodical approach for defining an industry. It is an investigation, study and assessment of the structure and forces within the industry that a firm competes in that go beyond a firm’s direct competitors. Made famous by the Five Forces Model developed by Harvard University Business School professor Michael Porter, the objective of the Industry Analysis is to gain a better understanding of the position the firm is in, and determine the opportunities and threats the respective industry presents. An effective Industry Analysis will draw off of a thorough Situation Analysis, help define Strategic Positioning / Competitive Advantage, heavily influence the both the Competitive Strategy and Sales Strategy.


Marketing Strategy

Marketing Strategy is a defined “course of action” designed to maximize the use of an organization’s marketing resources in pursuit of its objectives, and it is a driving force behind the Business Development / Partnership Strategy, and the tactics presented in the Marketing and Sales Plan. The Marketing Strategy starts with a thorough Situation Analysis and Market Analysis. It is formulated after the answers to key Strategic Modeling Questions (listed below) are measured and compared to a variety of generic strategies, tools, principles, exercises and business models that are applicable to the specific organization and its environment. It is ready to put in to action after the formulation of a Marketing Strategy Statement that clarifies the analysis conclusions, and focuses on the issues and assumptions that will underpin how the strategy will be executed. An effective Marketing Strategy, like an effective Business Plan, is constantly evolving, and therefore never finished.

Strategic Modeling Questions:

  • Who is the Target Customer?
  • What is the customer’s compelling reason to buy?
  • What is the “whole product” solution that fulfills this reason to buy?
  • Who are the key partners and allies who might be part of a whole product solution?
  • What is the optimal, value-adding distribution model?
  • How should the solution Pricing be determined such that a measureable ROI can be achieved?
  • Who, what and where is the competition?
  • What is the optimal positioning for the product / service?
  • What is the next target segment that can / should be addressed?

Sales Strategy

The Sales Strategy is a defined “course of action” designed to maximize the use of an organization’s sales resources in pursuit of its objectives. It analyzes and fine tunes the direction the sales team will take in the tactical “plan of attack” presented in the Marketing and Sales Plan, and helps to identify critical areas to focus the Business Development / Partnership Strategy. It focuses on making the immediate sales process more efficient, and making sure long-term sales process is in line with the organizations broader business goals. An effective Sales Strategy will be guided by the Growth Strategy, Market Analysis, and Industry Analysis. In addition, it should be supported by a Marketing and Sales Plan that provides qualified sales leads to feed the sales cycle on a consistent basis. The single most important thing a good Sales Strategy will do for an organization is lay the foundation for a Sales Plan that makes the best use of the sales team’s time.

Strategic Positioning / Competitive Advantage

Strategic Positioning is a “core discipline” component of an organization’s Competitive Strategy (the other two being the Competitor Analysis and Industry Analysis). It is the process by which a firm identifies and builds off it’s Competitive Advantage. The objective is to create an image or identity in the minds of its target market, that can be used to optimize market penetration and dominate a defined market niche (or multiple niches). Strategic Positioning includes the implementation of a series of differentiation tactics using traditional marketing placement strategies (product features, pricing, packaging, promotion techniques, distribution, etc.) and is particularly cognizant of unique customer needs in each of the market segments that it operates in. Effective Competitive Advantage identification and Strategic Positioning depends on a thorough Market Analysis, Competitor Analysis and Industry Analysis. It will help lay the foundation for an appropriate Competitive Strategy, Product / Technology Strategy, and Marketing and Sales Plan, and should be reflected in all the other components of the Business Plan.


Business Development / Partnership Strategy

The Business Development / Partnership Strategy is the process of identifying, cultivating, and bringing to fruition new business opportunities that facilitate the long-term growth of the company. It is a critical component of the Business Plan that is based off of a thorough Situation Analysis, and guided by the goals articulated in the Growth Strategy, Sales Strategy, Market Analysis, Marketing Strategy, an Product / Technology Strategy. It relies heavily on developing strategic partnerships in five key areas:

1) Product / Service

2) Sales / Distribution

3) Marketing

4) Technology

5) Financial

An effective Business Development / Partnership Strategy will build off of the company’s existing strengths and network of contacts. It will target critical areas to develop new ones, and commit the necessary resources to building key relationships in pursuit of the business opportunities identified in the SWOT Analysis portion of the Situation Analysis. The Business Development / Partnership Strategy will become a critical part of the Marketing and Sales Plan and is an ongoing effort to advance the goals of the Business Plan.

Product / Technology Strategy

The Product / Technology Strategy is process of determining a Product Road Map (or Service Road Map), and which new technologies will be incorporated into the product / service offering and general business processes. Often it will focus on the following areas:

  • Advancing proprietary or patentable technology
  • Building competitive advantage through licensing third party technology
  • Adding product / service features to solve customer pain points or build customer loyalty
  • Bringing in outside technology to make internal business processes more efficient
  • Bringing in outside technology to make improve the sales and marketing process

It starts with a Situation Analysis and is heavily influenced by the Growth Strategy, Competitor Analysis, and Strategic Positioning / Competitive Advantage. An effective Product / Technology Strategy will result in Product Road Map that greatly impact the Business Development / Partnership Strategy, Marketing and Sales Plan, and be reflected in all components of the Business Plan.

Competitive Strategy

The Competitive Strategy is a strategic plan that determines how an organization can gain Competitive Advantage to most effectively compete in a particular market. It is comprised of three “core discipline” components: Industry Analysis, Competitor Analysis, and Strategic Positioning, and its analysis approach will differ depending on if the industry is fragmented, emerging, transitioning to maturity, in decline, or global. An effective Competitive Strategy will provide a “plan of action” for creating a defendable position for an organization in its marketplace that will maximize the value of its capabilities and distinguish it from its competitors. Much of the original theory behind modern Competitive Strategy that is now considered an academic field in its own right, and standard practice for major corporations and governments all over the world, is attributed to Harvard Business School Professor Michael Porter. However, Competitive Strategy is a constantly evolving field of study with competing ideas and new disruptive technologies (e.g. social media, mobile apps, etc.) that alter how the new generation of firms look at the notion of attaining Competitive Advantage. Competitive Strategy is a critical piece to an effective Marketing and Sales Plan and is reflected throughout all components of the Business Plan.


Marketing and Sales Plan

The Marketing and Sales Plan is the tactical plan for taking all of the internal analysis and strategy components of the Business Plan , and turning them into a “plan of action” used to engage the external market of potential customers and partners. The Marketing component of the plan is focused on defining the marketing tactics that will favorably position the brand in the mind of potential customers, and consistently feed the sales cycle with new leads. The Sales components of the plan provides the sales team with “marching orders” for making the best use of their time, and a framework for evaluating their sales success. It includes identification of target sales accounts, details of the sales process, and all the materials they will need to succeed in the field.

Financial Plan

The Financial Plan component of the Business Plan (a.k.a. “the financials”) is a statement of the business’s current financial position, a record of its historical financial performance, its projected financial position over time as the business grows, its strategy for bringing in investors, and it’s Exit Strategy. It is a key part of determining the viability of your business model, and essential for lenders and investors who want to see hard figures before putting money into your company. The Financial Plan consists of four standard financial statements, a history of P & L statements, and projections of Revenue and Expenses. The four standard statements are as follows: Income Statement, Balance Sheet, Statement of Cash Flows, and Statement of Owners Equity (which owners may choose to keep separate from the main Business Plan). The P & L’s (i.e. Profit and Loss Statements) summarize the revenues, costs and expenses incurred during each quarter. The Revenue and Expense projections should include short-term estimates (1 year), near-term estimates (3 – 5 years), and long-term estimates (6 – 10+ years). They are based on the assumptions and objectives presented throughout the Business Plan and are directly influenced by the Business Development / Partnership Strategy. The investor strategy is a plan for attracting investment capital in exchange for ownership in the company. The Exit Strategy is the plan for the owners for the company to recoup their investment of time and capital.

Business Processes / Operations Plan

The Business Processes / Operations Plan is an explanation of the “nuts and bolts” of the business. It’s the who, what, where and how of your product / service offering, with a description of the processes and systems in place to produce, store, deliver, and support the product or service offering. It is the place where the “rubber meets the road” with respect to all internal strategies presented throughout the Business Plan, but is most directly influenced by the Product / Technology Strategy. The topics covered in this plan will vary based on the kind of business, but will typically include some combination of the following:

  • Firm Infrastructure / HR Breakdown / Management Hierarchy
  • R & D / Technology Development Process
  • Design Process
  • Production / Manufacturing Process
  • Value Chain Relationships (Procurement, Suppliers, Partnerships, etc.)
  • Inbound / Outbound Logistics
  • Inventory Process
  • Distribution Process
  • Customer Training and Product Support Process
  • Customer Service Process / Policies
  • Internal Controls
  • Description of internal software systems in place
  • Description of management systems in place (Sigma Six, etc.)
  • Plan for ongoing improvement of operational efficiency


Executive Summary

The Executive Summary is a condensed version of the Business Plan that is the first section to be presented (after the Table of Contents), yet the last section to be written. The goal of the Executive Summary is to summarize each component of the Business Plan in a way that allows the reader to quickly understand the key points of the material without having read the entire document. Typically it will be 1 – 2 pages long (3 at most) and will be composed of a summary paragraph for every chapter listed in the Table of Contents. An Executive Summary will also work as an effective standalone document for investors or new executive team members when a concise articulation of the essence of the Business Plan is needed.

Appendix of the Business Plan

The Appendix section is for additional information and documents that support the claims made throughout the Business Plan. It is the last item listed in the Table of Contents and it is presented in the in the back of the document. Appendix items should be used sparingly, and limited to only those items that bring an exceptional level of credibility to plan. Examples of effective Appendix items include:

  • Notable customer case studies
  • Notable News articles about company or proving claims in the plan
  • Notable communication from strategic partners
  • Notable legal info (patent, trademark, copyright, license agreements, etc.)
  • Notable financial info (credit report, letter from banker, valuation, etc.)
  • Demographic info, statistics, charts, diagrams
  • Photos of the product / service
  • Sample Advertisements, marketing materials
  • Customer letter of intent
  • Pricing schedule
  • Consultant reports or other market research

Business Plan

The Business Plan is the final document that includes all of the sections listed above. Together, the Business Plan components form a comprehensive statement of the business goals, the reasons the goals are achievable, the plan for reaching those goals, and all the background information on the organization attempting to reach those goals.

The Business Plan works as an informational resource to draw from when unforeseen events in the marketplace require adjustments to the direction the organization is headed. It is the ideal document to have handy (and up to date) when new people are added to the executive team and need to get up to speed as quickly as possible, when potential investors become interested in the company and want to assess its position, or when the organization needs financing from a bank or other lending institution.


Implementation and Quarterly Review

An effective Business Plan is constantly evolving and being refined based on the most recent and accurate information available from its inter-related components. A common mistake many organizations make is thinking that a Business Plan is “done” when all the sections have been written and it’s been printed up, bounded and distributed to the leadership team. In reality, the usefulness of a Business Plan is dependent on time sensitive information and constantly evolving circumstances, making it effectively out of date the minute it is printed and distributed. Therefore, an organization should think of a Business Plan as a constant “work-in-progress”, with regular periodic updates (quarterly is recommended) to all of its components. All organizations should have someone (e.g. Director or VP of Strategy) designated to manage the research and production of each quarter’s updated Business Plan, and to track the implementation by the managers in charge of the deliverables in each component of the plan.

For details on Business Strategy or DAM / ECM consulting engagements with VP of Strategy, LLC, explore this website, or contact Scott M. Eilers to set up a free consultation: 971-269-5021

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Strategy Article #5: Marketing Strategy

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Marketing Strategy is a defined “course of action” designed to maximize the use of an organization’s resources in pursuit of its objectives, and it is the driving force behind the tactics presented in the Marketing Plan.  The Marketing Strategy starts with a thorough Situation Analysis and Market Analysis.  It is formulated after the answers to key Strategic Modeling Questions (listed below) are measured and compared to a variety of generic strategies, tools, principles, exercises and business models that are applicable to the specific organization and its environment.  It is ready to put in to action after the formulation of a Marketing Strategy Statement that clarifies the analysis conclusions, and focuses on the issues and assumptions that will underpin how the strategy will be executed.  An effective Marketing Strategy, like an effective Business Plan, is constantly evolving, and therefore never finished.


Strategic Modeling Questions:

Note:  The strategic modeling questions and explanations listed below are based off the concepts presented in the following books, and augmented with additional information. References:  Inside The TornadoCrossing the ChasmLiving on the Fault LineThe Chasm Companion, and Positioning: The Battle For Your Mind


1.     Who is the Target Customer?

Describe the ideal customer, both in terms of the target organization profile, and the key decision makers within those organizations.  Focus on organizations or people that currently have money and are willing and able to transfer it to you.  If it’s a B-to-B business, have an understanding of the target organization’s decision-making power structure, and the roles of the individuals that will typically need to “buyoff” on the sale.  Identify the target “sponsor” or “champion” for your product / service within the organization.  A common framework for this process is the Economic Buyer (e.g. CFO, CIO or other sr. level executive), the Technical Buyer (IT Director, Technical Evaluator), and the End User (Dept. Manager, Lead End User), however the target sponsor will often change as the company / product matures and progresses through it’s life cycle.


2. What is the customer’s compelling reason to buy?

The motive to purchase a product or service (a.k.a. compelling reason to buy), particularly in B-to-B transactions, is often a function of the following:

A) The economic consequences of doing nothing

B) To exploit a current opportunity

C) To address a current problem

Define the answer to this question from the customer’s perspective, not your company’s perspective.  Don’t make the answer about the features and benefits of the product / service, make it about why they should buy, and how their situation will be improved when they do.


3.  What is the “whole product” solution that fulfills this reason to buy?

The “whole product” is the core product augmented with everything that is needed (additional products / services) for the customer to have a compelling reason to buy it, and for it to exceed their expectations when they do. If a personal computer is the core product, then thewhole product would include software applications, training classes, peripheral devices (mouse, keyboard, printer, etc.), internet service, etc.  —  even exceptional packaging and design can be included here (e.g. Apple products).  It’s all the additional elements that accentuate the compelling value of the core product.  The ability to deliver a whole product is often the difference between a “me too” product that may satisfy customer expectations but does not stand out from competitors, and the “killer app” type product that dominates a market and produces “hockey stick” type revenue growth.  They key to this answer is determining what additional products and services are needed to make the core product stand out from competitors and exceed customer expectations.


4.  Who are the key partners and allies who might be part of a whole product solution?

The criteria for pursuing strategic alliances / partnerships should be driven by two main fundamental motives:

A)     Achieving market leadership by accelerating the formation of whole product solutions

B)     Achieving and sustaining market leadership by differentiation through distribution and / or value added services

The long-term goal is to create a market ecosystem that will evolve into a desirable, compelling and durable Value Chain.  Therefore, the key to answering this question is to research potential partners that help your company achieve one of more of the following:

  • Validation of the product / service through brand name association / recognition
  • A complete product that us repeatable, scalable, and delivers a quantifiable ROI
  • A system for delivering / distributing the product in a value added manner for the chosen market segments
  • Value add to the end user experience of the existing product / service
  • Mutually beneficial partnership that will incentivize the partner to commit resources to the partnership


5.  What is the optimal, value-adding distribution model?

The key to selecting and building an effective distribution channel is to ensure that you create and sustain a relationship with the target customer. The right choice of distribution model will be a function of Solution Complexity (how difficult the product is to install / deploy / use) and Marketing Complexity (how difficult the product is to source / sell / support).  Products that have both low solution and marketing complexity may be able to be sold online, while those with high solution and marketing complexity may require an experienced Systems Integrator.  Retail, VARs, and Direct Sales fall in between as seen on the graphic.  Problems in the marketplace arise when the complexity for either the solution or marketing is high and the other is low.  This creates a bad deal for either the customer, originating vendor, or the distribution partner because the price point does not match the services required to distribute the product.


6.  How should the solution Pricing be determined such that a measureable ROI can be achieved?

The best way to consider Pricing Strategy is think of it as a reflection of the value (both perceived and actual) of the product in the eyes of the customer, within the context of the prevailing business model associated with delivering this value.  How customers perceive value is a function of the Questions 1 – 5 (above), and since Business Models change over time, so too will the Pricing Models and assumptions. Other Factors affecting Pricing Strategy are positioning, demand / price sensitivity, cost, and revenue / profit maximization, and the competitive environment. Finally, a key part of formulating the right Pricing Strategy is to evaluate Standard Pricing Models to determine which ones best match the unique circumstances of your organization and its environment. You should also consider hybrids of multiple models that will best highlight the value you are delivering to the marketplace, and those that will maximize long-term revenue.


7.  Who, what and where is the competition?

The best way to approach this question is to go through the exercise of a true Competitor Analysis.  It’s recommended that this exercise draws of the theories and techniques that Harvard Business School Prof. Michael Porter lays out in his books: Competitive Strategy and Competitive Advantage.  Another book from HBS Prof. Clayton ChristensenThe Innovator’s Dilemmais also recommended.  The answers from a thorough Competitor Analysis will provide context for building competitive advantage and establishing optimal positioning.


8.  What is the optimal positioning for the product / service?

In their landmark book on the subject, Positioning: The Battle For Your Mind, Al Reis and Jack Trout say, “Positioning is not what you do to a product, it’s what you do in the mind of the prospect”. Positioning is the aggregate perception the market has of a particular company, product or service in relation to their perceptions of the competitors in the same category. It will happen whether or not a company’s management is proactive, reactive or passive about the on-going process of evolving a position. But a company can positively influence the perceptions through enlightened strategic actions.  Reaching the desired positioning in the minds of the target customer is a function of two things:

A)     Benefit —  The ability to address the compelling reason to buy

B)     Differentiation  —  The expression of one element in the value chain (e.g. technology, product, application, distribution) that makes the benefit possible, is relevant to the target customer, and is unique to the market alternatives.

The key to effective positioning is understanding that you don’t necessarily have to provide more or superior benefits than your competitors.  Your competitive advantage lies in your commitment to providing a complete solution to your segment’s problems.  The battle is waged on the basis of your providing differentiation points that are at least equivalent to the status quo (which can’t provide equal benefits), and is more relevant than the other new product entries that have not been tailored for the target segment.


9.  What is the next target segment that can / should be addressed?

In the early market phase the goal is to acquire as many customers in as many segments as possible because you are validating your new product / technology.  In this phase building a customer base is prioritized over market segmentation strategy. However, after the product matures and the first niche market is penetrated and then dominated with a whole product solution, segmentation strategy becomes more important. In order to gain mass market, accelerated growth, new market segments need to be identified where the same or similar whole product can be utilized by a new segment.  In addition, new applications for the original whole product need to be identified.  This is what is referred to in Moore’s book series as the “Bowling Alley”.  Ideally you should pursue next target segments that are similar enough to be reasonably “addressable”, not so big that they’ll be impossible to dominate, and not so small that dominating them will be insignificant.


Generic strategies, tools, principles, exercises and business models for comparison:

Not all of the strategies, tools, principles, exercises and models listed below will apply to all organizations.  The key is to research and select the ones that apply to your organization’s current situation and environment, and then “plug-in” the most current information into those models.  The goal is to utilize proven methodologies to find new perspectives of looking at your situation, and ideally find new useful nuggets of information to add to your Marketing Strategy.


Marketing Strategy Statement

A Marketing Strategy Statement is the final “deliverable” document resulting from the research and analysis described above.  It will be unique to each organization, but effective statements will have the following characteristics:

  • Answer the Strategic Modeling Questions (listed above)
  • Define the current position and desired position in the applicable generic business models (listed above)
  • Write it as the “go to document” from which all executives will use to get on the same page, all new executives will use to get up to speed, and all marketing decisions will be based.
  • Treat it as a constantly evolving document that is regularly evaluated and refined.
  • Shoot for a Marketing Strategy Statement that is 1 page long, 2 pages maximum. Limit it to the results of the analysis, rather than the analysis itself. Utilize the Five B’s of Effective Marketing Presentation:   “Be Brief, Brother, Be Brief”


For details on Business Strategy or DAM / ECM consulting engagements with VP of Strategy, LLC, explore this website, or contact Scott M. Eilers to set up a free consultation:    971-269-5021

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Push Notification: The Future of Mobile Marketing (at least according to Mobile Portland).

Jason Grigsby, the co-founder of CloudFour and globetrotting speaker / evangelist for mobile technology, was the MC at Mobile Portland’s October event held this week (10/24/11) at the Pearl District headquarters of mobile software company Urban Airship. The theme of this month’s event was Mobile Marketing, and as a non-profit organization dedicated to educating, promoting and supporting the mobile technology community, Mobile Portland assembled an excellent panel of speakers to take a closer look at the current state of mobile marketing and answer questions about what works, what doesn’t, and what people should be thinking about as they start to ramp up their mobile marketing campaigns.

On the agenda was a discussion about the massive global growth in mobile device usage, and the state of mobile spending as a percentage of total marketing budgets for most organizations, which while growing, is still relatively under-represented. The consensus was that mobile marketing continues to remain under the radar, but not for long.

Each panelist had the opportunity to give a short presentation on the mobile marketing landscape from their perspective, and participated in a lively and interactive Q & A session monitored by Grigsby. A brief summary of each of the panelists along with some notes on their comments, and an update on mobile industry news and other information is provided below.

That being said, the theme of the night, which was covered in detail during the Q & A session, was Push Notifications — more specifically, the prediction that Push Notifications will dominate the future of mobile marketing. All of the panelists were in agreement on this point and there wasn’t really even a close second contender, although various tangents on the evolution of the Mobile Web got some significant discussion.

“Push” technology refers to web-based communication where the request for a given transaction is initiated by the publisher or central server. This is in contrast with “pull” technology, where the request for the transmission of information is initiated by the receiver or client. Push services are often based on information preferences expressed in advance through “opt-in” or subscription models.

As a mobile marketer, Push Notifications allow you to send messages directly to the people who have installed your app, even when the app is closed on a device. The value is in the ability to create customer engagements by delivering relevant information including sports scores, breaking news, stock movements, game challenges, retail purchase incentives — anything really, as long as it’s pre-approved through opt-in subscription and relevant to the specific mobile user (i.e. no spam!).

One panelist summarized his vision of the future of mobile marketing with something he called the “Target App”. He described the notion of receiving a Push Notification on his smart phone while getting out of his car and walking into a Target store. This Push Notification (that he’s opted in to) would know he’s walking into a Target (via geo-location technology), draw info off his aggregated personal / consumer profile (from social media, etc.), and send him relevant, timely and in-context information such as good deals in the store for items that it knows he’s interested in. This publisher-initiated communication (i.e. customer engagement tactic) would be delivered in a non-spammy way that seamlessly makes his life easier and saves him time.

In the interest of full disclosure, it’s worth remembering that the Mobile Portlanddiscussion was graciously hosted by Urban Airship, a rapidly growing leader in Push Notification technology, and there’s a high likelihood that one or more the panelists’ unbridled optimism for Push Notification could have been influenced by the imbibement of the complimentary local-brewed IPA’s on tap throughout the event for this Monday night after work crowd. (at least it tasted like an IPA to me) ;-)


George Kurtyka (Head of Entertainment Partnerships and Business Development, Nokia)

George’s presentation got everyone up to speed on the evolution of Nokia since the 1990’s when it seemed like just about everyone in North America owned one of their phones. Aside from some impressive slides on the company’s global growth (particularly in India), he spent a lot of time talking about their strategic partnership with Microsoft. This was particularly timely, as it coincided with Nokia’s unveiling of a portfolio of innovative phones, services and accessories this week, including the first smartphones in its Windows Phone-based Nokia Lumia range. According to Gartner, Nokia remains the leader in global mobile phone sales, although most of those are lower-end “feature” phones, and it’s total mobile phone market share has been dropping. Similarly, Microsoft dominates desktop software, but its Windows Phone software holds only 1.6% of the global mobile OS share. It will be interesting to follow this burgeoning partnership of industry giants, and watch what they do to compete in a smartphone ecosystem dominated by Apple and Android-based products. A fairly recent Portland transplant, George was an engaging speaker who won the crowd over by proving his Portland street cred with proclamations of his love of Oregon microbrews and the Portland Timbers.

Jeff Lorton (Co-Founder, LynkSnap)

Jeff is a charismatic hyper-evangelist for QR Codes (Quick Response Code) — you know, the square crossword puzzle-looking barcode thing that seems to be popping up on everything from Pepsi cans to billboards? Yeah, that’s it. But there in lies the problem with this technology. Although its been around for about 10 years, most people still don’t know what it’s for, how to use it, or why they should care about it. That’s where Jeff’s company LynkSnap comes in. They work with clients to take that lifeless crossword puzzle thing, and turn it into a unique and effective brand experience that takes customers from print to mobile web content in just one click. Utilizing the new smartphone barcode scanning function, LynkSnap produces custom branded QR and UPC codes that call consumers to action. Take a look at LynkSnap’s QR Code Gallery and this mobile scanning demo video.

Sean Roy(Founder Matua Media, co-Founder DialogHealth)

Sean is the founder and principal of Matua Media, a consulting firm who helps businesses of all sizes leverage technology to achieve their organizational goals. He develops mobile strategies, innovative products, and launch plans for companies in a wide range of industries including healthcare, automotive, advertising and analytics. Sean has implemented solutions for internationally recognizable brands like Vodafone, BP, Jaguar, Burger King, Blue Cross Blue Shield of Tennessee, and Saatchi & Saactchi. He also led the development of the award-winning, cloud-based mobile marketing platform of Run the Red, a leading mobile marketing company in Australasia. He recently co-founded Dialog Health, a company who specializes in mobile solutions for the Healthcare industries. Sean brought a very interesting international perspective to the evening’s discussion.

Milind Pandit(Technical Director, tenfour)

Tenfour bills their company as a creative agency with a rare mix of clever strategy, technical smarts and thoughtful design. Their impressive list of clients and industry awards showcase their expertise in Digital Media, Print Media, Brand Identity, Brand Extension, Social Media Strategy, Mobile Development, Video Production, Retail Environment, and Product Packaging. As a last minute stand in for Daniel Timothy Wood (tenfour’s Digital Strategy Director), Milind Pandit contributed often to the discussion and made good points about geo-location in push notification, and the importance of good analytics when selling mobile marketing concepts into large organizations.


Mobile Growth Stats & Mobile Web Tips to Start Marketing (SearchEngineWatch, 10/27/11)

ComScore: Mobile banking app usage up 45% since Q4 2010 (FierceMobileContent, 10/27/11)

Is mobile making customers more loyal? (Mobile Marketer, 10/27/11)

Social, mobile usage get closer to going hand-in-hand (ZDNet, 10/20/11)

ComScore: Mobile social media audience grows 37% (, 10/20/11)

European Mobile Marketing and Advertising Industry in Steady Growth; 2012 mobile advertising and marketing market forecast: $37.5 Billion (MarketWatch, 10/19/11)

InMobi Mobile Insights Report: North America Mobile Advertising Market Grows 50% in 90 Days (MarketWatch, 10/19/11)

Will Google See $6.25 Billion In Mobile Ad Revenue Next Year? (, 10/17/11)

Study: Banner Ads on Mobile Devices See Higher CTR Than On PCs (, 9/15/11)

Gartner Says Sales of Mobile Devices in Second Quarter of 2011 Grew 16.5 Percent Year-on-Year; Smartphone Sales Grew 74 Percent (Gartner, 8/11/11)

Gartner Says Worldwide Mobile Advertising Revenue Forecast to Reach $3.3 Billion in 2011 (6/16/11)

10% of Search Ad Clicks From Mobile (ClickZ, 5/3/11)

Best Practices for Using Push Notifications (ReadWriteWeb, 4/1/11)

Ad Dollars Still Not Following Online and Mobile Usage (eMarketer, 3/31/11)

Study: 82% Of Brands Plan To Boost Mobile Budgets Over Next 12 Months (5/11/10)

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Strategy Article #4: Business Development / Partnership Strategy

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The Business Development / Partnership Strategy is the plan for identifying, cultivating, and bringing to fruition new business opportunities that facilitate the long-term growth of the company.  It is a critical component of the Business Plan that is based off of a thorough Situation Analysis, and guided by the goals articulated in the GrowthStrategySales Strategy, and Marketing Strategy.  It relies heavily on developing strategic partnerships in five key areas:

1)     Product / Service

2)     Sales / Distribution

3)     Marketing

4)     Technology

5)     Financial

An effective Business Development / Partnership Strategy will build off of the company’s existing strengths and network of contacts.  It will target critical areas to develop new ones, and commit the necessary resources to building key relationships in pursuit of the business opportunities identified in the SWOT Analysis portion of the Situation Analysis.  The five key areas listed above are expanded on below with descriptions and examples.


1)  Product / Service

The focus of the Product / Service business development strategy is to grow the business by developing the revenue streams related to existing products and services, as well as identifying and executing the development of new ones.  The target development areas detailed below are based off of the Ansoff Product / Market Matrix  — a standard business plan tool for evaluating Growth Strategy opportunities.

A)     Market Penetration

This strategy focuses on continuing to sell existing products / services into existing markets.  The goal is to increase market share in the current marketplace by winning a higher percentage of new business opportunities, and / or taking customers from competitors.  Typically, this strategy is most effective when the overall market is growing, and it is done by implementing one or more of the following competitive tactics:

  • New targeted marketing campaign(s)
  • Increase sales force / refine sales process
  • Aggressive pricing changes (undercut competition)
  • Value-added services aimed at dominating high growth market segments.

Example:  Partner with a digital marketing agency that can create online lead generation programs to consistently feed the sales cycle with new target market prospects.

 B)    Product Development

This is the strategy of introducing new products / services into existing markets.  The goal is to increase market share in the current marketplace by increasing revenue per customer, and attracting new customers in the current marketplace with new product options.  This strategy is often part of the natural growth of organizations, however it requires the development of new competencies (often done through acquisition or strategic partnerships), which inevitably brings new risks and expenses.  Example:  Develop an OEM distribution or licensing partnership with a company that has a complimentary product or technology, which can be bundled in or up-sold to the existing customer base.

C)    Market Development

This is the strategy of selling existing products into new markets.  The goal is to increase revenue by moving beyond the immediate customer base, attracting new kinds of customers for existing products.  Typically, this involves identifying new vertical market segments that have not yet been served, or international expansion.  Example: Make the adjustments to an existing product or service so that it complies with the unique requirements of a closely related market.  For example, a product or service geared toward the Education market may require only minimal changes / improvements (along appropriate marketing and product positioning) before it could be re-introduced into the Government marketplace.

D)    Diversification

This is the strategy of diversifying into new businesses by introducing new products into new markets.  This is the most risky of the four strategies, and the least attractive option unless there is a unique circumstance that would warrant such a move.  Also, Diversification can be a move into either a related business or completely unrelated business, but the former is almost always preferable.  Example: Re-evaluate components of the SWOT Analysis portion of the Situation Analysis, and find a new business opportunity or strategic partnership that capitalizes on the company strengths, while minimizing exposure to weaknesses, and / or eliminates threats.


2) Sales / Distribution

The focus of the Sales / Distribution business development strategy is to grow the business by expanding the reach of your sales and / or distribution network.  Depending on the type of product / service and industry structure, this will typically involve strategic partnerships that change the nature of the existing sales process.  Below are four areas to focus the Sales / Distribution component of the Bus. Dev. / Partnership Strategy.

A)    Direct Sales

Let’s assume that most of a company’s existing sales is done through a external sale team focused on selling the primary product to larger accounts such as Fortune 1000 level companies.  There may be “lighter” version of the product or secondary products geared toward smaller companies that can be sold directly to the customer via the website.  Changes to the website and online marketing strategy that facilitate this process can increase direct sales as percentage of all sales revenue.

B)    Reseller / Dealer Network

Sometimes it’s better to build a network of contracted sales professionals in strategic geographic locations than to try to employ a full time sales team.  These kinds of sales professionals will typically already have resources and relationships that will help bring your product to market quickly. The key to this strategy is building relationships with the best dealers, who essentially become your customers. You must have a strong program in place to train them and support them with marketing campaigns and materials.

C)    Value-Added Resellers (VARs)

A value-added reseller (VAR) partnership is a strategic alignment with a company that adds features or services to your existing technology or product, and then resells it to end-users as an integrated product or complete “turn-key” solution. This is common in the technology industry, where a VAR might bundle a software application with supplied hardware.

D)    OEM Distribution

An original equipment manufacturer (OEM) distribution partnership is when technology, products or components are purchased or licensed by a company and retailed under that purchasing company’s brand name.  This can be a great way for a small company with a solid product or cutting edge technology to gain access to a larger company’s sales and distribution channels.  And vice versa, it’s a great way for a company with established sales channels but a limited or dying product line to quickly build a new revenue stream.

3) Marketing

The focus of the Marketing business development strategy (a.k.a. Partner Co-Marketing) is to build synergistic relationships with companies that deliver valuable exposure and other marketing benefits for your company at minimal cost. A typical co-marketing partnership involves a smaller company that utilizes the products or technology platform of at much larger company with a developed partner program.  The larger company benefits from evangelism and product / technology dispersion provided by the network of smaller companies.  The smaller company benefits from the partner program marketing exposure provided by the larger company.  These kinds of marketing related partnerships are common in the enterprise technology industry (e.g. Microsoft Certified Partner, Adobe Solution Partner, Apple Developer Network, etc.).  The following are four areas where the Marketing component of a Business Development / Partnership Strategy can provide tangible benefits.

A)    Brand Name Recognition

One of the immediate benefits of becoming a certified partner of a major company in your industry will be use of the partner logo on your website, marketing collateral, business cards, etc.  This lends immediate credibility to your product / service offering and will help to build brand equity. It tells prospective customers that your company and product line has already been vetted by an established authority.

B)    “Go-to-Market” / Sales Referral Programs

Companies with established partner programs will often have a “Go-to-Market” or Sales Referral programs designed to help partners tap into their customer base or sales channels.  These programs are designed to connect their entire ecosystem of partners, customers and affiliates, and will often require the partner to make adjustments to the product / service offering (including price).

C)    Event Exposure

One of the easiest ways to take advantage of marketing partnerships is through events such as industry trade shows or affiliate conferences, particularly when the company you’re partnering with is a major sponsor of the event.  Typically there will be multiple opportunities to meet other partners and potential customers, and in some situations event fees can be underwritten by the sponsoring company.

D)    Custom Co-Marketing Projects

Many large companies have co-marketing budgets set aside to facilitate unique marketing opportunities that are custom designed by the partners.  This could be co-written white papers, case studies, technology demonstrations, or anything that will advance the company’s marketing goals in a creative way.  The key is finding the right contact inside the organization to “green light” the project, pitching the idea in a professional way, and making sure it delivers value for company so they will consider similar projects in the future.


4)  Technology

The focus of the Technology business development strategy is to research, evaluate and implement the best available technologies to improve the business and continuously build competitive advantage.  Below are four areas to focus the Technology component of the Bus. Dev. / Partnership Strategy.

A)    Product / Service

This is similar to the “Product Development” section of the Product / Service area of the Bus. Dev. / Partnership Strategy (listed first in this document).  It involves research, development, and often partnering or acquisition of other companies with new technologies that make the existing product / service better.

Example:  Developing a new patentable technology that can be incorporated into a new and improved version of the product, which will help build competitive advantage.

B)    Customer Pain Issue / Problem Solving

This involves extensive communication with customers to find out what they like and dislike about your product, what the perception of your product is compared to the competition, and what can be done to improve the customer experience.  Often bringing in new customer service related technologies will not only help win new business, but will ensure that customers stay with you for the long term. Example:  Introduce an online customer service portal with all necessary product information, updates, company news, support info, FAQ, customer forum, etc…

C)    Business Processes

This involves utilizing technology the automates the internal workflow of day-to-day business activities with the goal of saving time and making the business more efficient.  This can include the implementation of internally developed technology, or a bringing in commercial technologies.  Example:  There are a range of enterprise software solutions geared toward business processes under the following categories:  Business Process Management (BPM), Enterprise Content Management (ECM)Digital Asset Management (DAM), Business Intelligence (BI), Web and Mobile Analytics, Workflow, and Collaboration.

D)    Marketing

Any good marketing plan will include the continuous evaluation of new technologies (both free and commercial) that can help achieve marketing goals.  One area of the marketing plan where there is always a constant stream of new technologies to evaluate is the Digital Marketing Strategy.  A good place to start is to partner with a digital marketing agency, or start with the myriad of free tools available.  Examples:  Social Media, Mobile Apps, E-newsletters, Automated Lead Capture, Blogging, Pay-per-Click Advertising, Search Engine Optimization, etc.


5)  Financial

The focus of the Financial business development strategy is to build both investor and banking relationships that will facilitate the long term growth strategy. Typically this responsibility will be with the CEO and CFO rather than a  Business Development executive, however he / she will inevitably be part of the relationship building.

A)    Investor Relations

When a company is in startup mode, investor relations are more informal than in a large company setting.  Typically the company will be trying to secure seed capital so there will be a series of Pitch meetings  where the various components of the Business Plan will be a key part of communication.  In larger companies Investor Relations takes on a more formal role with regular shareholder meetings, production of quarterly and annual reports, and communicating corporate governance policies.

A)    Banking Partner

While building and maintaining adequate cash flow is essential to keep the business running and meet financial obligations, building a good relationship with a reputable banking partner is also critical when it comes time to expand the business (purchase equipment, open new offices, finance working capital, etc.).  Working to build these relationships before they are needed will pay off when it comes time to secure a loan or line of credit to finance short-term and long-term growth opportunities.


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