visit www.spark-sme-services.co.za then call me for a meaningful, focused and valuable discussion. Let's work effectively. Learn how I took a business (and many others) from PBT of 480 million to 1.3 Billion in the middle of the 2008 crisis? Boring stuff: I have a B.Sc in Electronic Engineering and an MBA from INSEAD France, with additional studies at Wharton and Caltech (no use in business? wanna bet?) Anyway, at the age of 47, I am old enough to have made most of the mistakes (and more) one might expect within life and business, yet I am young enough to have plenty of energy to complement my belief that every problem has a better solution and usually more then just one. I have held various senior positions around the world, for example at Barclays (COO) and Mutual & Federal (Exec of Strategic Change), and worked cross Europe & Africa, as well as parts of the US, and Asia, and in a range of industries from Defense, Banking, Insurance, Automotive, Manufacturing and online Commerce. Visit my website www.spark-sme-services.co.za for free access to a wide range of business topics and tools for you to use essential for any start-up or more established enterprise.
I just don't think you are even asking the right questions yet.
Are you comfortable with these first? What is the single very clear reason why customers will part with their hard earned cash in exchange for your service or product? What is your uniqueness that defines you within the competitive landscape?
I assume you understand your customers, and how they make decisions, what sources of information they will trust etc? this is not just demograhics but psychographic insights.
now if you have this, when you employ your marketer, you can discuss what your goals are and quantify them. do not abdicate this thinking, this is your start-up! now some forms of marketing are easy to measure in terms of impact. like a TV advert with a call centre number, placed before a certain soap-opera. you can see the increase call rate, measure the change in conversion rate, uptake etc. but lots of marketing is really hard to measure in terms of campaign outcome, (bill boards, and events and merchandizing) so I would suggest two key things.
Firstly, delegate and make him or her accountable for a well defined result over a sufficiently long period of time. Don't be lazy and say something like "$ million revenue in the first 6 months or $ 3 million of sales over 12 months. Instead, you know the your Revenue is actually driven somethig like this: total Nbr Customers x Ave Spend per Customer, but is that good enough? No of course not, instead you will think that total customers is actually broken down over time into Retained Customers - Lost Customers + New Customers and Ave Spend is a function of #of products, frequency of purchase, discounting
Marketing is key to all of these, and the way you incentivise and what you measure will make or break this key phase of your start-up. Measure only new customers, and I promise you you will see compaints being ignored and then existing customers leaving.
Now marketers will sell you a fine story, test this by getting him or her to assume some risk and put some skin in the game. that will keep them honest. reward performance, if they exceed your expectations in a valuable way (you don't want them generating 200 000 calls into your call centre which only has 10 people now do you?) then reward this with a nice variable component. a decent clever marketing person is worth their weight in gold, and will leap at the opportunity. unfortunately there are very few truly good marketers out there. think carefully of whereand how tio actually find good marketers (not your mother's best friend's daughter, not some dumb-ass recruiting agency, .....ha!!)
I have had my battles in this space, and it took me a while as an engineer to realise nowadays, many of the world’s problems are still seen as problems of reality alone, when in fact, if we understand that value has a component of intangibility, the major component of the problem is that of perception.
tell me how is it that a bottle of "spring water", intinsically no better than the water i get out of my tap at home, can sell for more than the equivalent cost of the same volume of gasoline? marketing brilliance!
check out my website where I have lots of free stuff on this. all free for you to use. call me if you need.
In 2008, when the world was going crazy, understanding our market and asking the right questions first, helped me take a business from PBT of 480 million to 1.3 billion (one of Barclay's acquisitions).
The thing to do first I find is not to focus on the answers, but on some very simpile questions, which will drive complexity soon enough. This is true of B2C or B2B, and we will build on this with the traditonal strategic methodologies.
1) what is your business great at? without even thinking of your competition yet, what can your business do exceptionally well?
2) now, what can you do better, cheaper, quicker, newer, sexier (whatever it is) ...so that you stand out from the competition, uniquely? as a mental aid, if I was to google your business, what combination of words would get you top of the ranking, consistently? think of this Volvo is a car, but it owns the word safety. what words must you own or do you own?
3) what defines the different types of customers in the market you want to serve and dominate? what are the characteristics that define the segments of the market?
4) what is the reason that customers will want to use your product or service? what problem are you solving? how are you making their lives easier, better, whatever (avoid competing on price, niche markets obviously exclude this!)
5) next you have to understand your position in the competitve landscape, what external forces will you have to deal with? New tech, New Regulations, New Entrants, Powerful Encumbants, Easy substitutes etc?
6) now you need to go back and check, and really understand. How will you make money? this is an easy question with a non trivial answer. ask your colleagues these two simple questions. 1) if you invest a single dollar into the business, what will it be turned into when it goes through the economic engine, and finally reconverted into cash in the hand? and VERY IMPORTANTLY, how long will that single dollar be tied up within the business before it is converted into cash again?
Now you may think this is stupid, but it always gets ignored. Would you prefer to have a dollar turned into $1.50 over the course of a year, or would you rather have a business where a dollar, gets turned into a mere $1.10, however it only takes a month? Do you see how the same $ can be reused 12 times? This is a compound effect.
I have all of this explained on my website, with everything you need to answer your questions. It's free, and once you have some concrete thoughts, I can help you if you wish. This is the site: http://www.spark-sme-services.co.za/ navigate to the toolset, and chose the relevant sections. I would suggest Strategy, and Value Management first. In here you will find tutorials, worked exmaples and key questions?
There's a lot more to it, but this will get you started off, the site will help and I willm help you fill in the gaps if you need.