We all struggle to determine what is essential in our lives and business. How do we know to make the right decisions unencumbered by bias or inexperience? Making good decisions in running a business is crucial to its success. I will share an effective way to think about your business that will help ensure that you make good decisions.
Harvard business professor Michael Porter came up with the term “Focused Strategy” in the 1980s. Simply put, it is a successful strategy of developing, marketing, and selling products or services to a particular market and doing it well. I came up with a business design method called Market Focused Planning based on this theme in my consulting practice. This strategy is market-focused, and I will explain how you must think about the approach to be successful.
Your real work must be more strategic and less tactical as a business owner or senior manager. Obsessive operational management or, as some say, “micro-managing” day-to-day activities leaves little time to ask, let alone answer critical questions you need to ask.
Asking the right questions and sharing insights and answers, both laterally and vertically, throughout your organization is what you must do as a strategic manager. There is no function or position in your company that should be free of asking marketing questions. For example, “what must our business be in the mind of our customers for them to choose us over everyone else?” Another critical question is, “how do we constantly focus our company and its resources on the creation of long-run real competitive customer value and choice while at the same time creating long-run profit?” Finally, “how do we disconnect our company and our resources from everything else?”
Thinking in these terms, you quickly realize that your company’s entire operation is a marketing process. It starts with the promise or value proposition made to a select group of customers to attract them. It continues with the sale you make once they are engaged, and it ends with the delivery of the promise.
Following this logic, your company does three things: Lead Generation, finding those customers most likely to be attracted to your promise; Lead Conversion, providing an easy way for customers to get involved; and Fulfillment, servicing the customer as promised. Together, these three activities create a marketing result: exchanging goods and services for money.
Customer Fulfillment is where your company makes money. The other two steps require investment. Repeat Customer Fulfillment from a single Lead Generation and Conversion is the essence of profitability or, put another way, repeat sales or contract renewals.
Systemizing Lead Generation and Conversion based on researched and tested criteria enables your company to efficiently generate continuously predictable results that are not incumbent on the skill or aptitude of people. Establishing successful marketing and sales on effective programs targeting the most suitable customers or markets will create long-run competitive value and long-run profitability. Then you hire the people to operate the programs.
In reality, lead Generation, Lead Conversion, and Customer Fulfillment define marketing, sales, and operations. If this process is well integrated and wholly connected, your business will successfully attract customers and get them to come back for more.
In future blog posts, I will explain how to approach a business development that can create real competitive customer value and choice and long-run profitability while disconnecting your business from everything else.