February 3, 2010

Why a great business plan is absolutely clear on ‘HOW to WIN’

Source: Unsplash

Why a great business plan is absolutely clear on ‘HOW to WIN’.

Traditional business planning methods have issues; they’re all screwed up. 

The first two questions you have to answer in the strategic game plan creation process:
▪️ HOW BIG do you want to be? — what are your growth and financial goals?
▪️ WHO do you want to SERVE? — what are the customer groups you want to focus on to deliver your growth goals?

”How will you WIN?”

The third and final question one asks is a critical one: “How will you compete and win?, and the answer to the question drives a stake in the ground in terms of how you will differentiate yourself from your competitors and beat them handily.

HOW to WIN follows the WHO to SERVE question. You are looking for uniqueness relative to the customer groups you have chosen to target and not the market generally.
You may have capabilities that stand out from your competitors in the mass market, but the challenge now is to focus on those that relate to the particular customer groups you have chosen to meet your revenue growth goals.

This is very important. If you have chosen customer groups ‘A’ and ‘B’ for example, then you need to differentiate yourself from others vying for the attention of these two groups specifically.
You will be searching for ways of delivering what these two groups want in a more compelling and special way than anyone else attempting to do the same thing.

Answering the HOW to WIN question involves in-depth competitor analysis: Who are they; what are their strategies? How do they differentiate? What is their value proposition?

As a practical way of determining your competitive position, I suggest creating the ONLY statement for your organization.

“We are the only ones that…” will separate you from the herd! 

Jerry Garcia, former leader of the legendary rock band The Grateful Dead, nailed it: “You don’t want merely to be the best of the best. You want to be the only ones who do what you do.”

This is not a task for the faint-of-heart. Engage your team in the task. It involves looking at every nook and cranny in your organization for opportunities to separate yourselves from the pack - brand, service, product, product support, and how you leverage technology are some examples of where you can look.

Here’s an example:
“We are the ONLY team that provides integrated safety solutions that go beyond the needs of our customers ANYTIME, ANYWHERE. We are committed to grow our customer’s business. We ONLY serve safety.”

Rules for creating The ONLY Statement

▪️ The ONLY statement must speak to the experiences and value you create for people not the products or services you want to push.

▪️ Keep it brief. It’s a sound bite not a narrative. If it consumes a page it isn’t a viable claim.

▪️ Talk to the specific customer group you are targeting not the market in general.

▪️ Test your ONLY statement with customers and employees to ensure it is relevant and true.

▪️ Consider your ONLY statement a draft. The reality is you won’t get it right the first time, so take your almost-there only statement and start working with it.

Refine it as you go. And stay alert for a response by a competitor who may suddenly come awake when they see your move.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

• Posted 2.3.10 at 01:53 pm by Roy Osing
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January 29, 2010

Why a great business plan chooses ‘WHO to SERVE’ very carefully

WHO to SERVE: Discover Their Cravings And Secrets

Traditional business planning is broken.

It wastes resources.

To grow, ask: “WHO do you want to SERVE?”

Not all customers are equal.

Some fuel growth; others drain you.

Choosing the right ones is mission-critical.

The Hard Truth

If customers can’t meet your HOW BIG 24-month revenue growth goals, they’re not worth chasing.

They’ll suck up resources and leave you short.

HOW BIG you want to be dictates WHO you SERVE.

Stop being sentimental.

Loyalty to unproductive customers feels good but won’t deliver growth.

The WHO to SERVE Rules

▪️Target low-share, high-growth groups.
▪️Focus on double-digit growth customers.
▪️Stick to accessible geographic segments.
▪️Identify high lifetime value customers.
▪️Serve loyal buyers who require minimal effort.
▪️Dominate segments where you’re strong.
▪️Choose the MINIMUM number of groups that deliver your goals.
Focus on the critical few, not the “possible many.”

What Does The WHO “CRAVE”?

Understanding their needs isn’t enough.

Know what they CRAVE.

▪️Dig deeper than surface-level needs. Discover their desires.
▪️Identify emotional triggers. What do they value most? Convenience? Status? Security?
▪️Surprise them with what they DON’T expect.
▪️Deliver an irresistible offer. Excite and surprise them, don’t just meet their needs.

The Tough Decision: Walk Away

If customers can’t meet your growth needs, walk away.

Redirect energy to those who will.

The Bottom Line

Choosing WHO to SERVE is make-or-break.

Be ruthless.

Focus on the customers who fuel growth.

Your business’s future depends on it.

Cheers,
Roy
My Podcast Show Audacious Moves to A BILLION shares the specific Moves I made to achieve jaw-dropping growth in an insanely competitive internet business.

”The Audacious Unheard of Ways I Took a Startup to A BILLION IN SALES” is the latest in my BE DiFFERENT or be dead Book Series.

• Posted 1.29.10 at 01:53 pm by Roy Osing
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January 27, 2010

Why a great business plan starts by deciding ‘HOW BIG’ you want to be

Why a great business plan starts by deciding ‘HOW BIG’ you want to be.

Traditional business planning methods have issues; they’re all screwed up.

This is one of three questions that must be answered to create your strategic game plan. It is a proven and practical process that incorporates the answers to three critical questions.

It begins with the “HOW BIG do you want to be?” question.

Traditional strategy-building methodology typically begins with an analysis of strengths, weaknesses, opportunities and threats. It then moves on to developing an overall strategic direction.
Objectives and action plans are struck. Finally the expected financial results are produced. They are the output of the strategy-creation process.

In my experience, the financial results get scrutinized by the top executive and often get modified as the CFO and CEO decide they simply aren’t aggressive enough. Sound familiar?

As a result, higher growth and financial numbers are driven out of the tabled strategy by changing input assumptions to the plan, rather than by adjusting the strategy to deliver more aggressive financial results.

BIG mistake

This is a huge mistake. Assuming that the assumptions behind the plan are reasonable and acceptable, forcing more aggressive numbers from a strategy without increasing strategic risk is a fool’s game.

The expected higher performance numbers will not happen.

The strategic game plan process is to treat growth and financial expectations as inputs to the strategy-building process. Do you want to grow top line revenues 25% over the next 24 months? Or would you be satisfied with growing at 10%?

Clearly the former target would require more resources and would entail greater risk than the more modest scenario.

In addition, the character of the strategies would be different. The 25% growth strategy would require a different set of actions than the 10% incremental option.

For example bolder growth expectations might require new markets and strategic partnerships that might not be necessary under a modest growth plan.
The bolder the plan the more you have to move away from organic growth.

So declare right up front the growth and financials you intend to achieve and THEN develop the strategy to deliver them. And if you have been growing at 10% don’t expect doing more of what you have been doing will be good enough to deliver on a 25% plan.

It won’t happen. You will have to be more creative, more aggressive and be more accepting of more risk. If not, suck it up and be prepared to stay with your 10% strategy.

HOW BIG rules

Creating HOW BIG is a challenging task. Here are the guidelines to keep in mind as you do the work:

▪️ A growth goal should be bold enough to drive innovation and creativity. If you don’t have to stretch and create new tactics and programs to achieve your revenues target, it’s not good enough.

▪️ If HOW BIG is “realistic” — which means you already know how to achieve it — its not appropriate. Pick another number.

▪️ Your chosen growth goal should make you perspire; yes, it’s risky but worth it.

▪️ HOW BIG is a declaration of intent without a specific idea on how to get there. It forces you out of your comfort zone.

▪️ A growth goal should disrupt past performance not trend line it. Trend lines imply predictability, and who thinks performance and goal achievement can be predicted in a world of uncertainty and uncertainty?

▪️ HOW BIG detests extrapolation. Another way of saying trend line analytics are dangerous.

▪️ Choose a 24-month plan period. It better aligns with execution and allows for faster response to unforeseen events. The problem with long planning periods is the mistaken assumption that you can put off action to the later planning years and not have to worry about doing something NOW. You need to be forced to ACT, and act in the moment not 4 years from now.

▪️ HOW BIG has no time for 5-year plans. The 5th year never shows up even though people can be sucked in to rationalizing underperforming behaviour today by saying it will be picked up — the hockey stick theory — in the latter years of the plan.

HOW BIG is the lynchpin of a process to replace traditional strategic planning.

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

• Posted 1.27.10 at 01:52 pm by Roy Osing
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January 10, 2010

Why cutting prices should never take priority over adding value

Source: Pexels

Why cutting prices should never take priority over adding value.

So, here’s the situation: your price is $26.25 and our competitor’s price for the same product is $23.00. What options do you have to compete?

1. Reduce your price

Your first choice is to reduce your price; this is the most common reaction.

The problem is that unless you can reduce your costs of supplying the product all you do is reduce your margins. And, you have to prepare for another potential round of price reductions if your competitor decides to further reduce their prices.

I am not a fan of competing on price.

It can be easily copied by your competition and it generally eats into your profits.

2. Add more value to your product

Your second choice is to add more benefits or value to your product or service in order to more than fill the $3.25 price gap.

This is the practice that will not only set you apart from your competitors but will also give you the opportunity to enhance your margins. In addition, it makes it more difficult for your competition to copy your move.

Value differences are tough to copy; price is easy.

Here’s a personal example of how this works. Lets say you are an author and your on-line book price is $3.25 higher than your competition. Matching the competition is really not an option as your cost structure is too high.

You don’t have scale and scope advantages like the big on-line book sellers. To compete, the only choice you have is to add value to your on-line offering that they can’t match.

So you might decide to add two value components to differentiate your offer:
- sign every copy of the book sold;
- offer a 30 minute conversation with anyone who buys your book on any topic that interests the purchaser.

Hard to copy. Adding real value.

Force yourself to look at adding value whenever you are confronted with a price difference. Resist the temptation to take the easy way out and drop your drawers on price. It generally doesn’t work and gives the illusion of an effective response.

Ask “What real value can I add to fill the price gap?”

Cheers,
Roy
Check out my BE DiFFERENT or be dead Book Series

• Posted 1.10.10 at 12:02 pm by Roy Osing
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