Business Strategy

If you manage a Strategic Business Unit within a large corporate, then everything we cover in the marketing matrix website must be aligned with the wider corporate strategy.

And this page will make sure you understand exactly what that is…

Or, if you are a SME (small / medium enterprise) business owner, then being in touch with the considerations that large corporates make about strategy can help you evolve your marketing plan and business growth.

So let’s review these top-level ideas of corporate strategy now.

Leading businesses concentrate on three areas:

  1. Customers – who shall we target and how shall we build relationsips to maximise life time value with best possible profit margins in a market category with rabid buyers
  2. Competitors – what are we up against, and how can we rise above?
  3. Company – organizational strengths and weaknesses

Do you want short-term profits or long-term growth?

  • Operationally strong businesses focus on efficiency – doing what they have always done, and trying to do it better
  • Strategically strong businesses focus on effectiveness. What should they be doing well to survive and prosper for long-term growth

In Eli Goldratt’s book The Goal, he identifies quite simply that MONEY is the goal of business, from which all other pursuits are measured by.

Money in business comes from profitability, or ‘return’.

Return reflects the relationship between profit generated from the money invested in the business, which leads to three linked financial criteria that provide the framework for results management:

Return (profit/assets) = Margin (profit/sales) x Utilisation (sales/assets)

Return is created through 2 sub-goals.

  1. Growth
  2. Market share

Whatever form your companies Balanced Scorecard takes, it should be used to define the elements that contribute to Growth, Market Share, and Return.

Performance improvements can be grouped into 3 areas:

  • Customer experience management (beyond CRM)
  • Organizational development
  • Financial control

And there are several layers of strategic analysis (like peeling an onion)

  • Environmental analysis – SWOT
  • Industry analysis – 5 Forces
  • Corporate analysis – SERF
  • SBU

What we are looking for are the underlying constraints of optimal performance management.

Ms. Scheinkopf identified three types of constraints: physical, policy, and paradigm constraints. Physical constraints include materials, capacity (which includes time, space, or capability), and the market. Policy constraints might be rules, training, and measurements. These, in turn, are driven by paradigm constraints ? mental models and assumptions that help formulate the policies.

?Look at the company as if it were a chain,? Ms. Scheinkopf suggested. ?Identify the weakest link. What is the link that will inhibit us from making the most money?”

Elevating the constraint should be a strategic decision at the highest levels.

Business strategy can divide into 2 core areas:

  1. Corporate strategy – Regarding the organization as a whole, and defines the industries/markets in which the corporate will oeprate and sets the direction in terms fo development of the overall portfolio. Provides the basis for the allocation of resources. Uses analytics techniques such as environmental mapping, industry mapping, and SWOT analysis.
  2. Business Unit Strategy – Concerned with the component parts of the organization (SBUs) and defines how the business will compete in the market and how it will be positionined in relation to competitors.

In corporate strategy, objectives should be developed before considering how limited your budget is right now. First outline the big vision. Only then create milestones based on budgeting. Do not limit your vision just because you have a limited budget for the short-term.

Too often market strategies are evaluated and set at too high a level (corporate) which leads to a poor fit. From considerations of corporate strategy, we can now focus on the elements of Strategic Business Units and marketing strategy.

The Career Troika (business, marketing, and productivity) involves many strategies, as outlined here:

  • Corporate Strategy
  • Business Strategy (Balanced Scorecard)
  • Marketing Strategy
  • Sales Strategy
  • Customer Strategy
  • Product Development Strategy
  • Organizational Strategy (resource management, process management, knolwedge management)
  • Personal Strategy (efficiency, planning skills, interpersonal skills, etc.)

Business Strategy

In what Markets will your business unit operate? What risk-levels, and cost of capital is it constrained by? What returns must it look to achieve?

Marketing Strategy

By what Positioning in the market place can you achieve the business objectives? The Marketing Strategy involves balancing capabilities with target customer insight, and competitive analysis. See theĀ Marketing Strategy page.

Sales Strategy

How will direct sales teams complement the marketing engine?

Customer Strategy

What processes will maximise and optimise the customer experience for the full customer life cycle?

Product Development Strategy

What NPD (new product development) must occur, what is happening in the marketplace, and what is the current product road-map?

Organizational Strategy

What internal culture and set of operational processes and procedures will best serve the marketing plan, business objectives, and corporate strategy?

Continue at the Preparation page.

6. TRACKING

“If you can’t measure it, you can’t manage it”

The measurement and evaluation of performance requires answering 4 basic questions:

  • What has happened?
  • Why has it happened?
  • Is it going to continue?
  • What are we going to do about it?

Financial & Non-Financial Indicators

The above 4 questions are taken from a very interesting article well worth browsing at www.fpm.com/journal/mattison.htm which explains that financial indicators (such as KPIs – key performance indicators) are not indicative of effective business management or business progress.

Financial indicators can ‘encourages management to take a number of actions which focus on the short term at the expense of investing for the long term’.

“Research in support of this approach has come up with new dictums for the workplace : “the less you understand the business, the more you rely on accounting numbers” and “the nearer you get to operations, the more non-financial performance indicators you realise could be valuable aids to better management.”

Financial indicators can ‘encourages management to take a number of actions which focus on the short term at the expense of investing for the long term’, and it goes on:

So what do non-financial indicators relate to? They relate to the following functions :-

  • manufacturing and production
  • sales and marketing
  • people
  • research and development
  • the environment

Adapting A Balanced Scorecard

business-score-card-logicThe Balanced Scorecard (BSC) provides an excellent starting point for developing a tailored methodology for tracking both financial and non-fincnail key performance indicators of company performance.

BSC identified ‘4 perspectives’ in the early 90s by which to monitor long-term strategic progress in the company:

  1. Financial
  2. Customer
  3. Internal Business Process
  4. Learning and Growth

And I have adapted it to suit my own approach to business development (as detailed within this Tracking section of the site) as follows:

  1. Compensation
  2. Contribution
  3. Operations
  4. Innovation

1. Compensation

“Money isn’t everything… but it ranks right up their with Oxygen”, said the great sales trainer Zig Zigler.

Whilst compensation comes in such forms as ‘sense of achievement’, due to the essential goal of business being to ‘make money’, it is financial metrics of the business unit that form the basis of this Compensation View on my suggested Balanced Scorecard for any company. With intangible compensation being considered as a close second.

At the highest level, you are tracking shareholder value and sustained competitive differential advantage.

> Visit the Compensation page

2. Contribution

This really covers the external output of the buiness. What societal contribution has your business created? This relates to the customer, as well as other resources throughout the supply chain and value chain, and speaks to the mission of the business strategy and values.

Ultimately, these measurements are based on the customer experience and customer performance management.

Back-End (Customer > Retention) Intelligence

Now at the level of campaign management for customer acquisitions and retention programs, including soft measurement and hard measurements. See the Marketing ROI page and Customer Performance Management page.

To identify the value of your expenditures, stick to this simple rule: If you cannot measure it, do not do it.

Front-End (Prospect > Acquisition) Intelligence

Here we are foussed on the metrics of lead generation campaigns such as traffic generation through SEO, SEM, Social Media, offline advertising, etc.

At the most basic, adding Google Analytics to your websites will deliver insightful information about your visitors and where they are coming from.

Campaign Metrics

Tracking of Marketing Campaigns ultimately lead to a handful of numeric measurements.

For a marketing manager these are known as your KPIs, or Key Performance Indicators. These few numbers provide an overall at-a-glance view of the effectiveness, growth, and ‘health’ of your marketing campaigns.

The Aggressive Marketer seeks to have under-the-thumb control of those KPIs through a series of Tracking Reports that track and measure the progress of each and every marketing campaign, source of revenue, and influence on the bottom line that exists for the business.

Your KPI’s must be measured with vigor to validate any and all marketing campaigns you run.

LTCV: Lifetime customer value… What is the long-term average dollar value of my customer?

Tracking can be time consuming, but very helpful in helping to direct marketing spend.

> Visit the Contribution page

3. Operations

Here we cover the processes and protocols of project management. The time and task management of each individual within the company. The efficiency drivers for optimal performance.

> Visit the Operations page

4. Innovation

Creating new and improved operations as well as customer experiences (which includes product development, promotional activity, and company image).

> Visit the Innovation page

Contact me for recommended resources and techniques for Tracking.

4. CONVERSION

Conversion generally means executing the process of changing the current situation to the desired situation.

In terms of marketing, Conversion is about taking an opportunity for business from one stage of involvement with your service to a higher stage of involvement.

The full customer lifecycle passes through various conversion funnels:

  • Lead generation (front-end marketing)
  • Customer acquisition (front-end marketing)
  • Customer retention (back-end marketing)
  • Customer value (back-end marketing)

As a direct response marketer, I must approach marketing from the point of view that before you can see customers as numbers and data, you must first see them as humans: people with feelings.

Those feelings are in essence:

  1. Seeking pleasures, and
  2. Avoiding pains.

The marketing numbers must evolve naturally out of dealing with those pleasures and pains. Marketing targets must be true to the dynamics inherent in the marketing funnel.

David Maister has a great way of categorising 5 main areas of marketing activity in a human sense:

  1. Broadcasting – lead generation including seminars, articles, newsletters, etc in the hope to generate enquiries
  2. Courting – engaging with a single, specific prospect on a particular targeted deal-making process
  3. Superpleasing – existing clients on existing matters to make them delighted
  4. Nurturing – bringing extended service opportunities to existing clients
  5. Listening – otherwise known as gathering market intelligence

By conducting the various aspects of Research you will have a very good idea of your prospect. And now we are at the point of communicating with our target audience about the value of our offer.

Beliefs, Frustrations and Desires

Your prospects beliefs, frustration and desires must be considered when creating your marketing funnel.

  • Don’t try to sell something until you know how to emotionally involve the prospect.
  • Don’t have copy written until you have identified the objective of this piece of copy in moving the prospect one step closer to being involved with your product by exchanging their time and money for the benefits of what your product offers.
  • Don’t make the mistake of trying to entertain your prospects with fancy graphic work, cute slogans, or humurous adverts.

Key Question to ask: What are the inherent emotions involved between what your product does, and what your prospect is experiencing in their life that makes them a suitable candidate for your product?

Then make the first step easy for the prospect.

If you are marketing online, your costs are cheaper, and you can create a multi-step sales process that has a higher overall conversion rate, than trying a 1-step sales process that makes your offer immediately, and loses the prospect if they don’t immediately buy.

Acquisition and Retention Model

Here is a simplified model of online traffic generation and conversion for acquisition and retention.

Your Prospects Journey
Through Your Marketing Campaign…

His final destination?

Your order form.

But not before a few stop-offs along the way…

marketing-model001First, something grabs his attention with an optimal mix of creative and copy, stirring an interest or problem simmering somewhere in his awareness.

Your advert compels him to action.

The diagram shows his journey through an online model of lead generation, acquisition, and retention.

He comes from 4 general traffic sources online, or various possibilities offline…

Your prospect visits a landing page that matches and expands on the advert which brought him here…

Further into your marketing funnel he goes, through information and links which tap his interest ever deeper, until he reaches that crucial decision point:

  • Perhaps he buys, thus you capture his details for back-end retention.
  • Or perhaps he does not buy, so you capture his data by offering an incentivised offer in exchange for his details for further front-end acquisition marketing via email or phone.

This model does not say…

  1. Advertise your product to anyone that will listen.
  2. Squeeze your marketing team to meet your targets.
  3. Drain your database as fast as possible by blatant sales pitches without bonding with and educating your prospects.

No, the model diagrammed above says:

  1. Create value for your target audience by offering openly available content.
  2. Involve them by a special offer for even more valuable and prized information that will help them with their wants and needs, in exchange for their contact information.
  3. Offer them more valuable information including segmented sales offers until they buy.

How can this simplified strategy be planned and managed? We can achieve this in various ways by evolving our Front-End Acquisition and Back-End Retention plans by answering…

…Your Prospects 3 Questions

There are 3 far-reaching questions your prospect must have answered before they will buy.

  1. Is it desireable?
  2. Is it credibile?
  3. Is it worth the risk?

Copywriting – The Heart of Marketing

Visit the Copywriting page for the full process of exactly what you need to cover to answer those 3 crucial questions in any and every marketing campaign you run.

Dig Further Into The Business Development Matrix

Database Management: Your database is the most valuable physical asset of your company. Check out pages for Lead Generation Opt-in Pages and Email Marketing for how to build and use your database.

Or continue onwards to the Traffic Generation section of the Matrix.

3. DEVELOPMENT

Based on your Preparation and Research you move into Development.

The Marketing Matrix recognises these broad areas for Development. Click on any of the main headings to visit each main page.


Summary of Development

Development varies greatly depending on the purpose of your project, the size of your available resource (Developers, Budget, Time, etc.), and the focus of your Strategic Business Unit.

By considering the above aspects of Development you will find a good balance for necessary Development in the success of your marketing project.

From Development we will consider Conversions.

marketingprojectmanagement

The Prime Directive of Business Development

Business growth through profitable servicing the needs of a market.

There are 6 practical areas of business development from a marketing orientation:

  1. Preparation – Including team selection, customer orientation focus
  2. Research – Market, customer, product, company competencies, etc.
  3. Development – Web presence, product development contribution, team development, etc.
  4. Conversion – Promotion, advertising, landing pages, sales videos, events, etc.
  5. Traffic – SEO, affiliate marketing, email marketing, social media marketing
  6. Tracking – Web analytics, ROI analysis, etc.

These 6 areas of practical marketing project management are unlocked by the trialectic of management:

  1. Outcome – Being crystal clear on what results are possible and are required for high marketing performance.
  2. Constraints – Understanding and controlling the bottlenecks that exist both within the marketing team environment as well as the external market environment.
  3. Performance – Managing daily productivity and overall ROI of marketing projects.

The 7 Meetings Protocol provides a very fast acting and supra-effective approach to marketing project management – without superfluous shelfware (software investments that are shelved on your staff’s hard drive collecting digital dust), and scaleable to whatever size marketing function you operate.

Pick up a copy of the Invisible Team Management white paper and apply it to your marketing project management.

Other Tools for Development

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