Small and Medium Sized Businesses – Developing Your Market Intelligence

Nearly every industry is signifcantly more competitive today that it was only a few years ago. Many companies focus on doing their thing a little bit faster or better than they did last year. But in today’s hyper-competitive environment that may not always be enough. We believe that there are three pillars of Business Intelligence that are given short shrift by many companies, and by ignoring these options, they put their company’s future in peril. The three pillars of Market Intelligence are Competitive Intelligence, Secondary Market Intelligence (syndicated or research that can be found or purchased on an given industry) and Primary Market Research – which is conducting research that is specifically designed to answer the questions that your business is grappling with – and that your competitors should never see (because it’s proprietary information).

COMPETITOR ASSESSMENT

It’s important to do a basic SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) on each of your key competitors to understand their positions in the market relative to that of your own company (financial position, apparent growth directions, likely profit margins and the threats that their business is facing). There are companies that specialize in gathering competitive information, and it’s pretty common to spend a couple of months and several thousand dollars to get a report on a number of key competitors. However, because the number of competitors is often very small, it’s often possible to do some gumshoeing on your own. When does your competitor open for business, when do they close, how many customers do they get in the morning, afternoon an evening, and how much does it look like they’re buying? Go in and ask them about their best selling product, buy one and see what they’ve got. You can also do a lot of this research via the web, or by the phone. Look at the city records to see who owns the land, have a realtor friend estimate what the rent would be like on that size building in that part of town. Look at the equipment they have, and the stock that that they carry, count the number of employees. You can probably do a pretty good job of estimating their revenue and even projecting their profit. It’s a good businessperson who has an idea of how their business stacks up.

SECONDARY MARKET RESEARCH

These are the companies that make their money by keeping tabs on the industry overall and try to understand which major competitors are doing well and which are in bad shape. Many can approximate market shares by talking to companies that provide raw goods or by talking to the channels that these companies sell through. Some of these analysts will estimate whether the overall business is growing or shrinking and are brave enough to project these numbers out for several years. The types of companies that track these industries include International Data Corporation, Dataquest, and don’t forget industry groups. Many of these reports are combined at one wonderful website that can help you quickly find reports on every industry under the sun – Market Research. This is probably the fastest place to find quality information on your industry overall, although it’s not free, unfortunately.

PRIMARY MARKET RESARCH

Once you know about your industry, you may decide that you’d like to know more about the specific products or services that you’re developing. Or maybe you just want to find out what kinds of customers are purchasing your products, how happy they are with them, or what their likelihood is of buying another product from you in the future. That’s where Primary Market Research comes in. Primary research entails a couple of dozen different methods of getting customers feedback, depending on what access they have to technology, where they are located in the world, the sensitivity of the topic and whether you think that group synergy would get you a better answer than you would by speaking to a customer one at a time. There are also a few unique methods to probe on other areas, for example there is “lost customer” research, which finds customers that purchased another company’s products and then probing on why they didn’t go with your products.

Anyway there are a number of ways to get at most any type of business issue that you have. Together these techniques can help a savvy business manager to ensure that they keep a finger on the puse of the market in which they operate – and thereby keeping their positiion in that market safer!

Removing Risks From Your New Business Strategy

This article identifies the risks business developers often face and the strategies used to minimise them. Winning complex new business is achieved by the systematic removal of risks and the effective deployment of strengths. Risks can be sorted into manageable categories each with a recommended set of strategies:

  1. You have a very strong competitor
  2. You are a late comer into the contest
  3. You face barriers within your own organisation
  4. You have a powerful anti-sponsor in the account
  5. You have some credibility/reputation problems
  6. There is a lack of alignment amongst decisions makers
  7. Your are unsure who the decision makers are and how they feel about your proposal

As there is a wealth of information to cover, this edition will deal with the first three categories and next month will focus on the remaining four.

1. You have a very strong competitor

Having a strong competitor is not necessarily the risk. It’s what that competitor has to offer which presents the risk. It may be that they have a superior solution; they may have better credibility, or they may have stronger relationships with the decision makers.

Firstly, question whether you really do have an inferior solution. Be analytical – assess what attitude each decision maker holds towards your solution and look at the detail of their perceptions. If there are some gaps in your knowledge, find out what they think. Examine the whole list and decide if your solution is inferior. If you still feel it is, you have to take action in either two ways:

Improve your solution – This is your best option, however it is not always possible or it can come with unacceptable margin implications.

Change the game – Changing the game is a classic game theory response whenever you face a stronger contender. To change the game, you need to break your solution down into components. Re-examine your decision makers and understand how they rate you on each of the components. Group the components on which you are strong and make this the centre of the buyer’s consideration. Your sales strategy is now to change the game into one you can win. Stop selling what you were selling and start selling this stronger solution.

It should be noted that changing the game is usually only effective at the start of the selling process. If the process is advanced, the decision maker’s view of what they want will be too strong for you to change.

2. You are a late comer into the contest

The good news when an unexpected tender invitation arrives is that you haven’t expended any selling time or money on this opportunity until now. The not-so-good news is that it’s very possible that a competitor is already the front runner for this opportunity. The problem is compounded by the fact that tender responses often consume significant resources and take you away from other pro-active development work.

Your challenge is to decide if you are going to pursue this opportunity and if so, how. Firstly, you need to make a realistic assessment of the comparative importance of this opportunity. Secondly, assess the comparative cost of pursuing the opportunity, including the impact of putting other work aside while you prepare this tender response. Then assign a high, medium or low rating to both assessments.

The opportunity can then be plotted on the following matrix:

Importance | High | Go | Go | Rabbit |
|__________________________________________________________ | Medium | Go | Manage | Stop | | | | Resources | | |__________________________________________________________ | Low | Stop | Stop | Stop | |__________________________________________________________ | Low | Medium | High | |__________________________________________________________ Cost

In this matrix, there are four recommendations to consider:

  1. Stop – Simply, if the importance is low, don’t proceed. Similarly, if the importance is medium and the cost is high, it is recommended not to proceed.
  2. Go – If the importance is high and the cost is low or medium, go for it. Additionally, if the importance is medium and the cost it is low, it’s worth pursuing.
  3. Rabbit – If the importance is high, the cost is high and you are late into the process, you need to pull a rabbit out of the hat! This may mean sharpening your pencil, leveraging a special relationship more vigorously, or finding a silver bullet. If you can’t capitalise on one of these options, your risk of not achieving a return on your tendering investment is high.
  4. Manage resources – You need to keep an eye on the resources you put into this opportunity, whilst maintaining your prospecting activity. You cannot let this become an all-consuming opportunity and must manage the consumption of your selling resource to the potential of the opportunity.

3. You face barriers within your own organisation

Many developers who have attended our workshops tell us that this is often their biggest challenge. We have a few simple but effective strategies:

  • Include the executives you need to persuade in your big picture analysis. Treat them like decision makers inside your client organisation and understand their personal and business motivations.
  • Involve the executives in your selling strategy as early as you can, even if they are not yet fully committed to supporting your proposal. As a sense of the hunt develops in their mind, they start to convince themselves that it is worth winning. Executives not usually involved in business development love to be asked for help.
  • Use your internal coaches to do the persuading for you. Sometimes they will be more effective than you.

4. You have a powerful anti-sponsor in the account

If you believe this to be the case, it is wise to investigate and uncover the following factors:

  • Their lack of support for you
  • Why they don’t support you
  • Their degree of influence in the decision
  • Who they are supporting

Ideally, you want to convince this decision maker that they should support your solution. However, if you are a long way into the sales process, this may not be possible.

If you believe this decision maker can’t be turned around, it may be better to stay away from them as they are likely to be supporting your competition. With true anti-sponsors, trying too hard can give them more data to use against you and/or increase their motivation to support their favoured option.

5. You have some credibility/reputation problems

If you find yourself with credibility or reputation problems, there are three things you can do:

Face the problem directly – don’t try and hide from it – Organisations learn from their mistakes. Be prepared to talk about what you have learnt and how you have put this knowledge into place for the benefit of your clients. Sound confident and welcome the opportunity to respond.

Re-frame the problem into consequences rather than attributes – Ask the decision makers why a particular credibility or reputation issue concerns them. Record their responses and deal with those rather than the negative attribute itself. Talk about those things that you now do to make sure that it is not a problem going forward. A negative successfully turned around can become a strong positive.

Find decision makers who support the corrective action you have taken – There are almost always decision makers who support actions your organisation has taken to overcome shortcomings. Leverage off the positive comments these buyers are prepared to make on your behalf.

6. There is a lack of alignment amongst decisions makers

There is a lack of alignment when the decision makers do not agree on the nature of the problem that you propose to fix. If however, there is consensus on the nature of the problem but there is disagreement on the type of solution required, action is needed to rectify this.

The biggest risk associated with a lack of alignment amongst decision makers is that the deal may never happen. The ‘do nothing’ outcome wins by default. Many opportunities with Government suffer this fate.

As an aside, your big picture strategy must contain a completion date. If there is no client imposed completion date, impose one on yourself. If you do not have a completion date, you never know if you are losing to the ‘do nothing’ outcome.

Ultimate decision maker

Where does the ultimate decision maker sit on this issue? This is the most important consideration. The solution provider who has the ultimate decision maker on side is best placed. This is where your selling effort should be focused.

Engage at the concept level

If time permits, you may need to go back to basics with the decision makers and engage them in discussion about what the problem is and what types of solutions are possible. This will require some courage and deep understanding of your client’s business. Executed well however, and it positions you as the real consultant and ahead of your competition.

Group decision makersIf there are many decision makers, it is likely that they will group into two or three solution camps. A good big picture analysis will show you how they group, which group favours your solution and which group has the power.

7. Your are unsure who the decision makers are and how they feel about your proposal

This risk is a clear indicator that your selling effort and/or big picture is incomplete. There is no substitute for getting face to face with all the decision makers. This is a two step process.

Identify – You need to ensure that your big picture identifies all the decision makers on this deal. Use the decision makers who are your strong supporters to validate that you have all the names. Get them to confirm your understanding of their level of influence and where you stand in terms of their support for your proposal.

Prioritise – Once you know who has the influence and who supports your proposal, make it a priority to work on those with high influence who don’t yet support your proposal. Be wary of approaching the anti-sponsors. You also probably need to stop spending time with low influence decision makers.

Finally, don’t be afraid to ask for assistance from your strong supporters. People are usually pleased to help promote a solution they want to see implemented. They can also give you advice and open doors that might otherwise be closed.

Developing the Right Opportunities

Not all of the questions you ask will have answers. For certain questions, you might get answers that do not excite you at all. However, some of the questions you ask will have answers that tell you that there might be a possibility for an opportunity to develop.

You note that I use the words “might” and “possibility” here. For an opportunity to exist, we should be able to combine four elements. Without all four, we have only a possibility, nothing more. However, as you get used to viewing the world from four different angles, you will very quickly start to think of all four elements automatically.

It is when you get to that point, that opportunities will just start “popping into your head”. It is crucial that you take notes when an answer excites you. Right at that moment, you might think that you will not forget it, but we all forget things, even very important things. Make notes of your thoughts and include any thoughts that you might have about the other three elements. Give your possible opportunity a name, as by doing this you give the opportunity a mental anchor and summarise it to its essence. You will remember it better, and your subconscious mind will work harder to expand it from the essence of the possibility, to a more complete vision of the opportunity.

During the course of the day, use any spare time you might have, to look at your card and ask questions. While travelling in your car (record your thoughts rather than writing them down!), in the elevator and on the escalator, while having a cup of coffee in the canteen. When you are doing things that do not require you to think, use that time to search for opportunities and do that by questioning the whole world around you. Yes, even when you have to go to the bathroom! And remember to jot down all the thoughts you experienced when you get answers that excited you.

Dedicate time; 15 minutes per day should do it, to reflect on your findings and what possible opportunities might arise from it. Think about each of them, and jot down any additional thoughts you might have.

Try and find the “missing three” elements for each answer that you get when asking the questions. A very simple matrix will assist you in trying to find the missing elements – turning them into opportunities for yourself.

You will start off with something like this:

Date: 04 Feb ’08
Needs: Computer keyboards, screens and mouse pads need cleaning
Means:?
Method to apply:?
Method to benefit:?
Potential:?
Notes: Saw Johnny’s workstation today – looks terrible!

Date: 05 Feb ’08
Needs: ?
Means: Old tires
Method to apply: ?
Method to benefit: ?
Potential: ?
Notes: Saw a whole heap of old tires at the scrap yard.

Date: 06 Feb ’08
Needs: ?
Means: ?
Method to apply: Carwash used to wash cars.
Method to benefit: ?
Potential: ?
Notes: Drove past carwash and saw how it applied water, soap and mechanical action to wash car.

After a while, when reviewing these entries, you might progress to:

Date: 04 Feb ’08

Needs: Computer keyboards, screens and mouse pads needs cleaning.
Means: PC cleaning box with solvent, glass cloth, water and drying chamois.
Method to apply: Provide PC cleaner with box and let him/her clean all PC user’s computers.
Method to benefit: Start PC cleaning services and get big business to contract. R15 per PC per month?
Potential: Yes! There are 6 buildings in our area, each with more than a 1000 PC’s.
That means R90 000 per month!
Notes: Saw Johnny’s workstation today – looks terrible – some keyboard keys seem sticky.

Date: 05 Feb ’08
Needs: Mine dumps need stabilization to prevent erosion and pollution.
Means: Old tires.
Method to apply: ?
Method to benefit: Set up “mine dump” stabilization business to sell service.
Potential: ?
Notes: Saw a whole heap of old tires at the scrap yard. Scrap yard will pay me to remove their old tires. Find out what mines would pay to stabilize mine dumps.

Date: 06 Feb ’08
Needs: How do fleet owners wash their large trucks?
Means: ?
Method to apply: Carwash used to wash cars.
Method to benefit: ?
Potential: ?
Notes: Drove past carwash and saw how it applied water, soap and mechanical action to wash cars.

Flag all the possible opportunities which you feel comfortable with that might turn into real opportunities. There are a number of ways in which you might like to prioritise the possible opportunities. In the above example, an overall “Potential” was used to prioritise. You might use various prioritising methods such as “Ease of implementation”, “Require least capital outlay” or even:”I like this opportunity (scale of 1 to 5)”. You decide how you would like to prioritise the opportunities. The method of prioritisation is far less important than the fact that you do prioritise and feel comfortable with how you prioritise.

As your opportunities develop over time, you will quickly realise that opportunities are very abundant to those looking for them. But opportunities alone are not enough! We have to do something with the opportunities.

In the next chapter, we will look at a terrific tool that will help you turn your opportunities into complete and compelling business visions – to get the most from your opportunities.

To find opportunities – look for alternatives, no matter how satisfied you are with a situation. Everything can be improved. Every improvement is an opportunity.

Chapter reminders:

1. Every opportunity has 4 elements:
-Needs
-Means to fulfill the need
-Method to apply the means to fulfill the need
-Method for you to benefit.

2. Get into the habit of looking at things from different angles – each angle one of the elements of an opportunity.

3. Develop opportunities by filling in the blanks!

4. Prioritise the opportunities

Why a Lifetime Membership Will Benefit Your Business Development for a Lifetime

Maximizing on lifetime membership is the most sustainable method to drive growth value for any business. The total amount of value derived from customer’s engagement to a business is really enormous. Maximizing this lifetime value is possible if only one can measure it. Through measuring, it is possible to track advancements over time. Customer value should therefore be measurable to realize business growth. Some of the advantages of customers’ lifetime membership include the following:

1. Drums up support for strategic acquisition.
Lifetime customers create channels under which many other customers are obtained. A business thus acquires a larger market as compared to one which has no lifetime membership. A larger market sustains a business over rough times, this is because customer influx is maintained throughout the year. Lifetime membership forms a web of consumers who ensure that profits are made. Acquisition cost will always rise in the global economy. It is thereby cost effective for one to retain current consumers rather acquisition of newer ones

2. Customer relationship management.
Growing customer loyalty and reducing churn. This is as important aspect as it ensures tailored marketing, promotion and communication to customers. Optimization of consumer loyalty and value. The business is forced to take a lasting approach for creation of value rather than promotions which maximize revenue for single shopping trip. Promotion of all products rather than being choosy is that it maintains a consumer base. Eroding a brand value can cost a business at the expense of customers.

3. Increased profit margins.
For any particular business, customers will always account for the largest share of profits, even if they are few. Majority of profits will be raked from customers while other sources of income come second. This means that a business has to brand constant customer loyal. This cannot be similar to those who only shop around.

4. Emphasized customer loyalty.
Lifetime membership should have a long term loyalty. This intangible asset has been consistently proven to advance a business. Successful enterprises monetize on this asset over long periods in order to have a market. Loyalty can be rewarded through discounting and offers.

5. Bigger value creation opportunities.
Lifetime membership point towards creation of powerful opportunities, like expansion of market or acquisition of other complimentary services instead of smaller opportunities. This is since the higher limit of the value one can generate from a single consumer will be greater than the higher limit of a basket full of goods.

6. Advertisement and promotion
Lifetime members can promote a business to a higher level. Some businesses have lifetime membership to media houses. The media house has the responsibility to extend its favors through advertisement and promotion of their product. In so doing, the business is widely recognized and appreciated. These elements act as the marketing strategies that ensures the business stays in line.

All in all, lifetime membership should be recommended due to their due advantages over timely memberships. Other benefits include discounted publication, free conferences, corporate benefit subscription, Insurance, Financial services and technology offers.