When you want to move from strategy to customer acquisition the first thing to do is defining the profitability of a business idea. Indeed, in order to be profitable a business idea has to 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 therefore necessary to establish the feasibility of the business idea in rational and emotional terms. Only then, once the possibility of having 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 then possible to undertake the established brand awareness actions and to start with activities for actively looking for new customers.
Below a brief post that illustrates our approach to this topic here in Vehnta.
Feasibility of a profitable business idea
Economic literature, more specifically as regards 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 the key issues, according to us in Vehnta, that can change the fortunes of the negotiation on the potential customer’s side.
As initially mentioned, these game-changing issues are exactly 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 axiom, 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 area of the language skill responsible for analytical and rational thoughts. “How” and “Why” instead coincide with two deeper areas of the limbic system that are the home of our feelings, such as trust and loyalty, of impulsive decisions and of our behavior, but that do not have language skills.
This means that when we communicate from outside to 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 section of the brain that does not govern decisions.
On the contrary, by communicating from inside to 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 at a later time during the process all the rational information that we can provide. By communicating in this way we will have a direct connection with the decision-making and all the rational information will be subject of or support to 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 emotional aspects, also the rational ones, that will help the potential customer to rationalize the offer. Below a list of the most important aspects and a brief description of all of them:
First of all the offered product will have to be useful to the customer. This concept, however trivial and obvious, sometimes tends to be forgotten. During prospecting phase, so the phase of the sales funnel that is essential for verifying if the generated lead is actually a potential customer, some salesmen indeed forget to evaluate this aspect in detail.
Among the game-changing factors, which can confirm the profitability of a business idea and turn on a negotiation with a potential customer, after usefulness, price is certainly an element of great importance. Of course, price indeed takes a prominent place among the rational variables that have an impact on purchase decision.
Strictly linked to the concept of price we find the concept 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 truly be 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 be taken into account is adoption. With adoption we mean the process of introduction of the purchased product into the purchaser company. Indeed, the product shall not have particular difficulties as regards its introduction and implementation. It will not have to create issues to the purchaser company, other than the critical problems structurally linked to every new product, which will be then repaid overtime thanks to the improvement that has been made.
Choosing the right target
As previously defined the usefulness of a product and the profound reasons of the existence of the company 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, to try to contact it.
As the book Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne suggests, we should learn to 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.
To generate commercial value, in terms of new customers and business opportunities, it is therefore 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 common reference sector for that specific business, which is characterized by a 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, its external limits, in order to look for borderline potential customers among the sectors or even across borders.
To look for new customers in a Red Ocean it is necessary to start from our own customers or from the clients of our competitors. On the contrary, to look for new customers in a Blue Ocean and to start new activities of lead generation, a clear paradigm shift is needed. It will be indeed necessary to expand the offer instead of verticalizing it. In this way we will optimize the common needs and not the differences.
Following this idea the next step that we in Vehnta suggest to take 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 own market, or not suitable 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 on the basis of three variables:
As previously stated it will be necessary to start from our own Red Ocean or from the customers of our competitors for a customer acquisition that can start on a well-known basis. However, in order to create more profit, it can also be useful to explore new fields of a Blue Ocean. At this point a product could be offered to a company that is completely 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 with reference to the cluster of already qualified targets.
However, a customer acquisition activity has to take into account also the boundaries of the sectors of its customers. These operations can be extremely rewarding 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 that are to be contacted. It is a fundamental step because, sometimes, the offered product could be perceived as useless because it has been proposed to the wrong person of a right company. In an ideal world this person, with a view to creating value for his or her company, should inform the colleagues about the received offer, but this is unlikely to happen. That’s why here in Vehnta we greatly focus on the analysis of purchasing system of the potential customer. We indeed want to guarantee that the message reaches the most qualified recipient in order to make something valuable happen.
As you can see, we have talked about purchasing system or interlocutors and not about a single interlocutor. This happens because the process of 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 the purchasing system of a target company could consider useless the right product for his or her business. This 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 make changes to status quo.
From this perspective, it is fundamental to understand the position of the customer, both the hidden and the evident one. Indeed, the purchaser could be in a state of tranquility, of improvement or of 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.
These two states however differ in the profound motivations of the choice and therefore in the 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 for 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 that are 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.
This is a very complex and hard step. Here in Vehnta we offer a dedicated service that manages to map the possible interlocutors of target companies in order to put a face to companies and take the conversation to a personal level.
To offer this service we have designed and realized a platform named VISIONSPHERE. It is conceived for speeding up the prospecting process and to quickly engage the right targets inside the potential customers. Starting from target companies the platform is indeed able to select the right interlocutors and to 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 defines 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 then it is just a matter of looking for the right interlocutors and 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. In case you want to learn more, please fill in the form below and we will get back to you as soon as possible.