When you move from strategy to customer acquisition, the first thing to do is define the profitability of a business idea. Indeed, to be profitable, a business idea must face a sequence of questions that stimulate the rational and the emotional approach.
Before undertaking a marketing campaign with brand awareness and customer acquisition objectives, it is necessary to establish the business idea’s feasibility rationally and emotionally. Only then, once the feasibility of a concrete realization of the idea has been outlined, it will be necessary to prepare the Go-to-Market. Once the Go-to-Market has been defined, it is possible to undertake the established brand awareness actions and actively look for new customers.
Below is a brief post illustrating our approach to this topic in Vehnta.
Feasibility of a profitable business idea
Economic literature, specifically regarding strategy or marketing, includes countless examples and theoretical explanations that define the approach to the feasibility of a business idea. In Vehnta, we prefer to deal with this discipline starting from the customer’s perspective. We, therefore, seek to perceive information as if we were the recipients of the messages in their most various shapes.
Below are the key issues, according to Vehnta, that can change the fortunes of the negotiation on the potential customer’s side.
As initially mentioned, these game-changing issues are precisely the same that constitute the sequence of questions used to define the business idea. We divide them into emotional and rational ones.
Emotional aspects in the definition of a profitable business idea
Simon Sinek, in his book ‘Start With Why: How Great Leaders Inspire Everyone to Take Action,’ suggests that companies should start with “Why” they exist, “Why” they are on the market, and “Why” they produce their products. According to his hypothesis, companies should learn to communicate, starting with “Why” they do their business, continuing with “How” they do it, and ending with “What” they do. Sinek has called this axiom the Golden Circle.
In most cases, however, companies communicate with the inverse process. They focus on “What” they do, sometimes on “How” they do it, and only occasionally on “Why” they do it.
Sinek believes this approach to be wrong and potentially harmful for the business. To support his claim, he refers to a principle of biology, which states that a specific section of the brain is composed of three main components that perfectly coincide with the three areas of the Golden Circle. The outermost area corresponds to “What” and coincides with the Neocortex area. This section is the language skill area responsible for analytical and rational thoughts. “How” and “Why” instead coincide with two deeper regions of the limbic system that are the home of our feelings, such as trust and loyalty, impulsive decisions, and behavior, but do not have language skills.
That means that when we communicate from the outside to the inside of the Golden Circle, so with the series “What” – “How” – “Why,” our targets could rationally understand all the characteristics of the offered product, even the most complex ones. However, despite all this, we would not guide their behavior and, therefore, not even their purchase. We indeed would have acted on the brain section that does not govern decisions.
On the contrary, by communicating from inside to the outside of the Golden Circle, so with the series “Why” – “How” – “What,” we would directly talk to the brain that controls behavior. In this way, we will allow our targets to rationalize only later during the process all the rational information that we can provide. Communicating in this way will directly connect with the decision-making, and all the rational information will be subject to or support the initial theory.
Rational aspects in the definition of a profitable business idea
Always keeping the compass oriented towards the profitability of a business idea, it is necessary to determine, beyond the emotional aspects, the rational ones that will help the potential customer rationalize the offer. Below is a list of the most important aspects and a brief description of all of them:
First, the offered product will have to be valuable to the customer. This concept, however trivial and obvious, sometimes tends to be forgotten. In the prospecting phase of the opportunities, which is the phase of the sales funnel necessary to verify if the lead generated is really a potential customer. Some sellers, in fact, forget to evaluate this aspect in detail.
Among the game-changing factors, which can confirm the profitability of a business idea and turn on negotiation with a potential customer, price is undoubtedly an element of great importance after usefulness. Of course, price takes a prominent place among the rational variables that impact purchase decisions.
Strictly linked to the concept of price, we find the idea of profit. However, profit is to be understood not only as the earnings of the seller company but also as the possibility of profit margins for a purchaser company involved in a supply or subcontracting process. We, therefore, propose an approach to profit that, linked to price, could indeed be a win-win for both sides: with a resulting advantage for the relationship between them.
Once briefly described usefulness, price, and profit, the last aspect to consider is the adoption. With adoption, we mean the process of introducing the purchased product into the purchaser company. Indeed, the product shall not have particular difficulties in introduction and implementation. It will not have to create issues for the purchaser company, other than the critical problems structurally linked to every new product, which will be repaid over time thanks to the improvement made.
Choosing the right target
As previously defined, the usefulness of a product and the profound reasons for the company’s existence that produces it are the two key elements that determine a profitable business idea for the potential purchaser. Once the feasibility of this idea has been defined, it will be necessary to identify a target and, later, try to contact it.
As the book Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne suggests, we should reflect on the fact that the creation of commercial value is based not only on competition and, therefore, conflict, but it can also be conceived as exploration.
In order to generate commercial value in terms of new customers and business opportunities, it is necessary to set an action strategy oriented to customer acquisition activities activated on two parallel lines. The first line is inside the waters of a Red Ocean, the standard reference sector for that specific business, which is characterized by higher competition. The second line is instead more typical of the waters of a Blue Ocean, so of an unexplored sea with little or lacking competition. In the Blue Ocean, it is possible to cover the peripheries of the sectors and their external limits to look for borderline potential customers among the sectors or even across borders.
In order to look for new customers in a Red Ocean, it is necessary to start with our customers or the clients of our competitors. On the contrary, a clear paradigm shift is needed to look for new customers in a Blue Ocean and start new lead generation activities. It will be indeed necessary to expand the offer instead of verticalizing it. This way, we will optimize the everyday needs and not the differences.
Following this idea, the next step that we in Vehnta suggest taking is the remodulation of the offer by highlighting the similarities among the needs of potential customers. On the contrary, if we take the specific characteristics of each potential target to the extreme, we will run the risk of creating an offer suitable only for the single potential customer and not to our market, or not ideal for the near markets or for the markets that go beyond the boundaries of the reference sector.
When the strategic phase, during which we have defined the profitability of the business idea and the addressee targets, is over, we can start the operational phase of the first approach to customer acquisition. Here in Vehnta, we define our approach based on three variables:
As previously stated, it will be necessary to start from our own Red Ocean or our competitors’ customers for a customer acquisition that can begin on a well-known basis. However, to create more profit, it can also be helpful to explore new fields of the Blue Ocean. At this point, a product could be offered to a company that is entirely wrong and far from the reference target. This can happen considering the complexity of the offered service, so because of a miscalculation, or in case of attempts on borderline targets regarding the cluster of already qualified targets.
However, a customer acquisition activity also has to consider the boundaries of the sectors of its customers. These operations can be advantageous in terms of new customers, but they can also not lead to the expected results: but we know that audentes fortuna iuvat.
Once the companies to be contacted have been identified, it is necessary to determine the people to be reached. It is fundamental because the offered product could sometimes be perceived as useless. After all, it has been proposed to the wrong person of the right company. In an ideal world, this person, to create value for their company, should inform the colleagues about the received offer, but this is unlikely to happen. That’s why here in Vehnta, we intensely focus on analyzing the purchasing system of the potential customer. We indeed want to guarantee that the message reaches the most qualified recipient to make something valuable happen.
As you can see, we have talked about purchasing systems or interlocutors and not about a single interlocutor. That is because selecting a supplier involves multiple figures with different roles within the process. Sometimes these figures can be represented by the same person, but this does not change the theoretical and operational approach to the system. However, this system is usually composed of more interlocutors.
According to the strategic selling mainstays, even the right interlocutor belonging to a target company’s purchasing system could consider the right product for their business. That can happen simply because that was not the right moment for the offer. The identified purchasing system indeed clashes with the variable of being open to changing the status quo.
From this perspective, it is fundamental to understand the customer’s position, both the hidden and the evident one. Indeed, the purchaser could be in a state of tranquility, improvement, or problem-solving. Both the improvement and the problem-solving phase are ideal moments for addressing the customer because, in both cases, the company is change-oriented.
However, these two states differ in the profound motivations of choice and, therefore, relative response time. In order to increase the probability of conversion, it is essential to understand whether the buyers are looking for an improvement or a solution to a problematic issue. In the first case, timing will be slower, whereas in the second case, timing will be quicker. On the contrary, buyers in a state of tranquility are to be avoided. Considering the state and the reasons for change, they will hardly want to close a deal, and therefore the negotiation will become static and exhausting.
Definition of the target
Once the profitability of the business idea has been defined, with its rational and emotional aspects, and the target companies have been chosen, it is time to identify the target people.
That is a very complex and challenging step. Here in Vehnta, we offer a dedicated service that maps the possible interlocutors of target companies to put a face to companies and take the conversation personally.
To offer this service, we have designed and realized a platform named VISIONSPHERE. It is conceived to speed up the prospecting process and quickly engage the right targets inside the potential customers. By starting from target companies, the platform can select the right interlocutors and generate an output of names and emails.
Contacting the target
Once targets and interlocutors belonging to the previously defined lines have been identified, it is necessary to adopt a contact strategy. The first contact with the potential customer establishes the feasibility of a negotiation and the tone of the conversation. According to us, after the proper prospecting analyses, a phase of massive exploration is needed.
Indeed, as previously mentioned, if the business idea is profitable, it is just a matter of looking for the right interlocutors. Therefore, in terms of business, time plays a crucial role.
Our approach in Vehnta will thus be to speed up operations with marketing automation techniques.
We hope that this post, with all the limits that brevity imposes, has been helpful for you. If you want to learn more, please fill in the form below, and we will get back to you as soon as possible.