Follow the Winners

In one of my favorite lines in one of my favorite movies, The Godfather Part II (1974), Michael Corleone (youngest son of the Godfather) says “Keep your friends close, but your enemies closer.” That advice was quickly adopted by those in business, who interpreted the line as a warning to keep a sharp eye on competitors.  No one wants to be blindsided by the competition and made vulnerable to the loss of revenue and market share.  That fear can keep one awake at night.  But how much time and effort should be spent looking over one’s shoulder and how often does such behavior result in anything that’s actionable or profitable?

Some business experts recommend that rather than obsessing over competitors, perhaps wondering what you might copy, instead study successful business leaders in other industries. When looking to keep your organization relevant and vital, strategies implemented by leaders at successful companies in industries other than your own can provide lessons and inspiration that will benefit you and your business.

To launch and sustain a profitable business, it is essential that you offer products or services for which there is a growing market, that you recognize and articulate a strong value proposition that attracts customers and that you devise a smart and efficient business model to put it all in motion and deliver the goods.  It makes sense to study innovative entrepreneurs from a variety of industries, so that you can learn what worked for their organizations and think about how certain of those strategies and tactics might be applied to your venture.

You might start this unique form of competitive intelligence by walking into a bookstore and browsing through the business section. You’ll be certain to find at least one or two interesting books, perhaps in memoir form, written by entrepreneurs who overcame significant obstacles and setbacks, only to prevail and build multi-million dollar organizations.  You might also look for speaker programs at nearby colleges, local chambers of commerce, or other business organizations that from time to time are known to host speakers who tell the story of how s/he built a successful enterprise.

Finally, since so much in life hinges on relationships and developing a strong and supportive network, remember also to reach out to those whom you know.  When you stop and think, you’ll realize that you cross paths with business owners and leaders on a regular basis.  We see and interact with these smart, successful professionals at neighborhood association meetings, at the garden club, at our place of worship, while at the gym and when serving on a not-for-profit board.  I’m willing to wager that you’ll be able to develop a friendship with at least two of these individuals and find opportunities to talk business now and again.

So extend yourself and get to know a little better the people with whom you regularly interact.  Start with some friendly small talk and and work your way toward having real conversations that lead to developing relationships.  At some point, you may be able to segue into a conversation about business, at your organization and theirs.  If you reach the level of trust that includes sharing stories about business challenges and tactics, you’ll be fortunate to have found a friend and perhaps also a mentor.  The experience will be much more satisfying, and effective, than spying on and obsessing over your business rivals.

Thanks for reading,

Kim

Image: Nike, goddess of victory, awards Heracles (Hercules) with the prize of a laurel wreath for his win at the 776 B.C. Olympics. Courtesy of the British Museum in London.

Advertisements

Competitive Intelligence: The Role of Social Media

To those who think you know all the ins and outs of using social media, fasten your seat belts.  If you created a LinkedIn profile at the turn of the century, started out with MySpace and later jumped to Facebook, became an early adopter of Vine and now work Snapchat, I have news for you.  Social media platforms are not just one-way PR broadcast channels that let you tell the world how brilliant and popular you are.  You can (and should) do some of that, but there is more.

Maybe you already do more?  You regularly use social media to encourage comments from customers about their experiences when doing business with your company.  You understand that social media is a two-way street.  But, still, there is so much more.

Social media can be effectively used not only for inbound and outbound marketing, but also for keeping tabs on competitors.  Social media is ideal for gathering competitive intelligence that can make you a smarter marketer, salesperson and business owner.  Here’s how.

First, determine who your competitors are, something that’s not always easy and obvious for B2B service providers.  Discover who your competitors are by meeting them.  The most efficient method to meet your competition is to join a professional society, where you’ll meet fellow accountants, life science marketers, event planners, etc., or join one or more chambers of commerce.  In four or five visits, you’ll meet a good cross-section of peers who do what you do, or something very similar.

Make it a point to talk to these people. Get to know them somewhat and exchange business cards, for they are not your enemy.  In fact, they can probably give you some valuable advice.  You should be willing to share a pearl or two of wisdom with them in return, as long as you don’t give away any proprietary information.

Once their business cards are in your possession, the second thing you’ll do is set up Google Alerts, so you’ll receive notice of their company’s print or online mentions, at no charge.  Whatever your competitors choose to publicly announce, you’ll quickly know.  It will be so enlightening to have the PR of competitors delivered directly to your inbox.

You’ll learn who will keynote at a conference, who will moderate or serve on a panel, who’s released a new product or service, who gets quoted in local or national press, or who will teach as an adjunct professor this semester.  Discover who’s quoted you, or if there are sites linking to your website or blog.  Monitor the content marketing of competitors (e.g., blogs and newsletters) and assess the perspectives and even the expertise of those whom you’re working against.

You can also receive alerts for your own company, to reveal what others are saying about your enterprise.  You’ll learn whether you have supporters who give you compliments in newsletters or blogs, or if someone is undermining you on social media.  Use competitive intelligence to shape your response and support your reputation management.

Regarding the successes of competitors, there’s no mandate to imitate what they do and that’s all to the good.  Be yourself.  But what you learn may inspire you to take, or not take, certain actions based on information you’ve gleaned from the three or four competitors you select to follow.  Set up a Google Alerts account to track key words and phrases and you’ll be happy that you did.

You might also try Hootsuite, a paid service, and use it to search podcasts and webinars by topic and engage in social media listening, for less than $20/month.  The primary role of Hootsuite is to allow users to write posts and manage all of their social media accounts from one site.  Those who are active on multiple platforms find Hootsuite very convenient.  Plus, the analytics reports included with the service reveal which of your social media tactics and strategies are worthwhile and which need rethinking.

Finally, if you can budget $80/month, then take a deep dive into your competitors’ content marketing activities with BuzzSumo.  Examine which content is getting traction for competitors, the shares competitors’ content receives and how your company’s content stacks up in comparison.  It’s possible to receive an update each time selected competitors publish content and you’ll also be able to compare the overall performance of your company’s content with that of competitors.

Thanks for reading,

Kim

Image: His Master’s Voice (1898), starring Nipper the dog, by British painter Francis Barraud. In 1901, the painting became the logo of what would eventually become RCA Victor.  EMI, JVC and HMV (His Master’s Voice) have also owned the logo rights.

 

Business Model = Profit Engine

Hatching an idea for a business involves much more than inspiration.  Your entrepreneurial idea must also include a strategy for making the idea profitable. That strategy is known as the business model. The function of a business is to provide products and/or services that help clients solve their business or consumer needs.  In addition, your business must work for you  and generate a reliable and abundant revenue stream from which you derive your annual income.

Before we go any further, let’s clarify the meanings of business model  and business plan.  Your business plan  is a document in which you describe the mission of your business; the target customers; the marketplace and competitive environment in which it will operate; its marketing, financial and operations plans; and the legal structure it will be given.

Your business model  will detail how the venture will attain and sustain profitability. The cornerstone of a good business model is a competitive analysis, which will help you verify target markets (customer groups) and establish your expected value-added in the presence of enterprises that offer similar products and services.

The primary element of your competitive analysis is customer knowledge, something that regulars to these posts know that I encourage frequently.  Information-gathering is a vital and ongoing business function.  James King, Director of the New York (state) Small Business Development Center, notes that “…customer purchasing patterns change rather rapidly and if you’re not ahead of your customers, you’re not making sales.”  Along with your selection of products and services to provide and customer acquisition strategies, operational aspects — that is, the process of how your products or services will be delivered — must meet the often fluid expectations of customers and will therefore figure into your venture’s business model.

Once you’ve developed a proposed business model, find a trusted potential customer or business owner or colleague and ask for a review.  Discovering and closing immediately obvious gaps is something you’ll want to do before your business is up and running.

King recommends that aspiring entrepreneurs “Sit down with someone who doesn’t have a vested interest and ask that person to poke holes in your model. If they do a good job, you’re going to be better prepared for any eventuality. The more risk you can eliminate, the higher the probability that you’re going to be successful.”

One is advised to revisit the business plan and business model every couple of years, or at least when changes in your industry, local business environment or technology have the potential to impact your sales revenue or how your do business. This practice will also give you the benefit of reviewing your projections as regards expected vs. actual target customers and allow you to refine planning for growth and expansion, as you create strategies for sustainable business success.

Thanks for reading,

Kim

ID Your Target Customers

Step One in evaluating the prospects of a business venture requires that you know who is likely to become a customer.  Here are 8 smart questions that will help you gauge whether you have a viable target market for your enterprise:

1.  Who will pay a premium price for my products or services?

  • Investigate how much business those who would be your closest competitors are doing and learn what motivates their customers to do business with them and find also pricing info,  if possible.
  • Assess your competitive advantages: do you possess a  “secret sauce”  that will make customers do business regularly and pay a little more?
  • Assess the value of your personal brand: who will do business with you because they value what you represent and do?

2.  Who has already done business with me?

  •  If your business is up and running,  growing your business often means persuading those who are already customers to do more business with you.  Which upgrades and extras to your service line might your current customers buy?
  • Speak with customers you know well and ask what adjustments in service,  features or delivery system would make their lives easier.
  • Design a survey and send it out to your mailing list and also add to your website and social media,  so that you can get more opinions and validate the findings of the customer Q & A.
  • Beta test new products and services with current customers,  to gauge their acceptance and refine the concept,  packaging,  marketing message,  delivery system,  price point, etc.

3.  Am I overestimating potential demand for my products and services?

  • Hire a marketing research firm to run a focus group to estimate the size of the market for your product or service.
  • Smaller budget holders should refer to numbers 1 and 2 and figure out how much business competitors are doing and if applicable,   ask current customers which new offerings would be useful to their organizations.

4.  Am I assuming that everyone values what I value?

  • Reality test your take on the priorities of your target market by asking them,  in face to face meetings or via surveys.  Read industry blogs to confirm how customers use similar products and services.
  • Find the thought leaders and listen to what they say about the need for what you plan to sell.  Without revealing your motive,  you can write in and ask questions.

5.  Does my business model match my target customers?

  • The business model is the blueprint for positioning your venture to make a profit.
  •  The ideal customer groups for your products and services must receive the right marketing message in the right way.  Products and services must be sold in the right way at the right price,  using the method of payment that customers expect.
  •  Design a business model that inspires trust and confidence and is user-friendly convenient.

6.  Who are my main competitors and how did they get started?

  • Study three or four close competitors and learn the back story of the founders.  What competitive advantages do they possess?
  • How long have those competitors been in business and what may have changed,  or remained constant,  in the business environment that allowed them to find success?
  • Define critical success factors for your venture.

7.  How will potential customers and I find each other?

  • Hair dressers,  manicurists and employees of consulting firms have the great advantage of being able to steal future clients from their former employers.  If you are employed in the industry in which you plan to open a business,  start now to strengthen relationships with those customers who might jump ship and go with you.
  • Learn how to reach your target customers.  Which organizations do they join,   which conferences do they attend,  which blogs or newsletters do they read,  does social media for business resonate with them and where should you advertise.

8.  Do you see opportunities to expand your target market?

  •  Eventually, it will become necessary to find ways to expand your business either vertically or horizontally. Stay abreast of happenings in the industry and maintain good communications with your customers to understand what you might offer in the future.
  • Can you create a niche market or two by tweaking what you have,  or offering it under another name and advertising in different media?

Thanks for reading,

Kim

Doing It Better: Operational Efficiency = Competitive Advantage

Many of you may know that I teach business plan writing.  I will begin another session of my three-part  (total six hours)  workshop series  “Become Your Own Boss: Effective Business Plan Writing”  at Boston Center for Adult Education on Wednesdays February 5, 12 & 19 5:30 PM – 7:30 PM  http://bcae.org class ID # 10573.  

I recently upgraded the operations segment of the workshop because like too many business plan resource providers,  insufficient attention was paid to those issues.  For example,  the business plan template displayed on the Small Business Association website does not include an operations segment.  Operations is an important element of every business plan and business,   including those organizations that sell intangible services.  The inclusion of an operations segment to my business plan writing workshop is a quality control/operations upgrade that allows me to better  meet or exceed client expectations and gives me a competitive advantage.

What do we mean by operations?  Operations is the process by which the items we sell,  whether products or services,  tangible or intangible,  are obtained or produced and made available for sale.  The operations component of a business plan  (and operations departments)  accounts for a wide variety of responsibilities,  including distribution of the product or service to the marketplace  (sharing that responsibility with sales; operations oversees shipping and handling);  inventory management;  quality control;  maintenance of the place of business;  maintenance of business equipment;  workplace safety;  and risk management (sharing that responsibility with finance;  operations oversees aspects other than financial).   A business model includes elements of operations and marketing functions.

Recently,  I suggested to a client a way to use social media to create an operational efficiency that will result in a competitive advantage for her business.  Outreach made by her staff to targeted populations will soon become faster and the number of potentially successful contacts will increase,  as the time and cost of doing so will decrease.  The organization will more easily and inexpensively meet or exceed its clients’ expectations.  This new operational efficiency can be promoted to prospective clients in the talking points of a sales pitch and used as a means to bring in more business.

It is to a Freelance consultant’s advantage to learn how to create operational efficiencies and provide services of the greatest value faster and less expensively.  The time and money saved can be used to directly increase revenue and/or promote the business.  The operational efficiency that I created as I became more experienced and proficient in writing these weekly blog posts caused me to receive the paid opportunity of editing a colleague’s monthly newsletter.

Operations processes are different for every category of business,  so I cannot give specific recommendations of how to create efficiencies within your venture.   Overall,  be mindful of how you source  materials for products that you manufacture,  the wholesale costs of  items that you sell at retail,  or what you pay for supplies.  As your business grows,  look for ways to buy in volume so that you can minimize the cost of goods sold.  Look also for ways to cut production time of products or services that you create and always strive to provide a product or service that meets or exceeds customer expectations.

Thanks for reading,

Kim

The Strategy for Your Strategy

“Become Your Own Boss: Effective Business Plan Writing” will be presented at Boston Center for Adult Education on Wednesday evenings October 10, 17 & 24 5:30 PM – 7:30 PM.  Do you wonder what you’ll do after you retire?  Evaluate and prepare to launch the business idea that you’ve been thinking about for the past few years.  Register at  http://bit.ly/RnyIBP

We’re at the threshold of the fourth quarter and it’s time to set yourself up for not only a strong and profitable ending for this year,  but also an auspicious beginning for 2013.  To make that happen,  you may choose to tweak your business strategy or perhaps make more substantive changes to roll out.  Change makes us nervous,  because we  enter uncharted waters.  Business plans look good on paper,  but what will reality bring? The impact can be unpredictable.  Freelance consultants can test a strategy relatively quickly,  but mistakes cost time and time is money.  Yet,  there are ways to improve the odds of achieving success.

Competitive advantage is derived from recognizing and responding to developments in your marketplace faster and more accurately than your competitors.  Strategy experts in Fortune 500 companies know that the strategy setting process must reflect the conditions of the marketplace in which one operates,  as well as your company’s influence within.  In other words,  minnows have different options than sharks or whales and the minnow’s strategies must reflect that reality.

Claire Love,  Martin Reeves and Philipp Tillmanns of Boston Consulting Group say that to effectively plan to succeed,  the business needs a strategy for making a strategy.  The trio have identified four categories of strategy setting:  Classical,  Adaptive,  Shaping and Visionary.  Small businesses and Freelancers would use one of the first two.  Think of Sony and IBM as two companies that had Visionary ideas that Shaped the global marketplace and influenced the habits of a billion consumers.

Classical is the strategy setting style recommended when operating in an industry and business environment that while predictable,  is nevertheless beyond the businesses’ ability to control or significantly influence.  Strategy planners analyze the current business situation and use that information to set reasonable business goals and identify the most favorable competitive market position that can be expected by leveraging available resources and advantages:  client list,  experience,  expertise,  relationships,  reputation,  etc.,  plus identify and assess barriers to entry.

The strategy planners then refine and strengthen competitive positioning through standard strategy planning techniques such as the SWOT  (strengths,  weaknesses,  opportunities and threats)  matrix and project the likely results elicited by the new strategy forward into successive quarters.   Goals and the strategies developed to achieve them might be followed for maximum three years,  or until changes in the business environment or within the business itself encourage the planners to set new goals and strategies.

Next week,  we take a look at the Adaptive strategy setting style.

Thanks for reading,

Kim

The Law of Attraction

Let’s chat for a moment about competitive advantage.  For sure,  we must identify and/or invent as many as possible.  One often overlooked competitive advantage is to make everyone think that we HAVE competitive advantage.  Pretty slick,  huh?

Think of it this way:  perception is reality and everybody loves a winner.  Precious few come to the rescue of the down and out.  Failure is frightening and depressing and no one wants to come near,  lest the misfortune rub off on them.

Conversely,  the appearance of success is a magnet for still more success,  mostly because people think you deserve it (you must be doing something right!) and can handle it.  Today’s lesson is that image counts,  so always make yourself  look and feel like a winner.  Invite success to your door—or at the very least,  don’t make it turn tail and run away from you!

Dress for success

When attending any type of function at which you might possibly meet a prospective client, dress appropriately.  Respect the occasion and wear the right casual,  formal or business attire.  Invest in good quality clothing (hit the end-of-season sales) that flatters your body type.  Good quality clothing looks better,  lasts many years and is worth the money because when amortized,  it actually costs less than the cheap stuff.  Dress to impress.

Project the positive

Be enthusiastic and passionate about life and business.  Let your body language,  voice,  eyes and mannerisms  sparkle with good energy.  Walk into every room with confidence,  hold your head high and radiate a positive aura.  Others will be attracted to your glowing presence and they will cross the room to introduce themselves,  to have the pleasure of meeting and talking with you. 

Greet one and all with a firm handshake and a warm smile.  Make good eye contact and show that you are delighted to make their acquaintance and are interested in what they have to say.  People like to do business with people who have positive energy.  It  suggests honesty and expertise and therefore inspires confidence and trust.

You’re worth it

Create a strong value proposition for your business.  Establish that your products and services are top drawer,  will provide unique and highly desirable benefits and therefore command a premium price in the marketplace.  Communicate that your products and services are worth the investment.

Get to know the objectives and priorities of your typical customers and broadcast the benefits that resonate most.  Gather information that allows you to anticipate customer needs and deliver 5 star service every time.  Make your customers grateful to do business with you by knowing how to solve their problems and make them look smart for hiring you.

Do your best to maintain your prices,  even when there is pressure to offer discounts that are outside of your pricing strategy.  There may be times when you must relent,  but defend your position by learning to clearly articulate the ROI of  doing business with you.  Think cariage trade,  not cut-rate.

Business is great

Creditors may be ready to foreclose,  but do not let on to your clients!  Moreover,  be discreet with colleagues,  lest word of your troubles gets bandied about.  The smell of desperation is repellant and clients will take their business elsewhere if it appears that your ship is sinking.  If you expect to do any business at all,  it is imperative that you project capability and dependability.  Financial insolvency does not inspire confidence,  no matter how it happens. 

Remember always that people do business with people that they know and like.  They do more business with people they trust and respect.

Thanks for reading,

Kim