Xavier Lederer identifies a key component that must be considered when building a strategy for growth.
You are not competing directly against your competitors, you are competing to be unique in the marketplace.”
What does your most valuable prospect look like? “Probably a lot like your existing valuable customers. The easiest and most profitable growth will be achieved by adding additional customers very much like your current most valuable customers,” explains Robert Bloom in his book “The Inside Advantage.” Clients you resonate with will bring clients in the same vein. The key question is: Who is your ideal customer – how do you identify and describe them – and how will you solve their problem?
Shifting ideal customers
This wisdom is more relevant now than ever: because of Covid customers have changed. Some have disappeared, others have shifted from in-store to online, and others have increased their purchases. As a result the assumptions you had about your ideal customers may no longer be relevant. And yet: you really need to know your ideal customer if you want to grow your business.
All customers are not created equal. Your ideal customer is an existing customer (not a hypothetical one), buys from you for optimal profit and refers you to other prospects – new customers who are likely to be remarkably similar to your current, ideal customers. Once you have identified your ideal customer you can find out whether there are enough of them to reach your goals – and define whether you need to expand into an additional segment.
Your ideal customer is a breathing, living human being
The thing is: It is not enough to define your customers as a market statistic – you can’t get to know a statistic. You have a much better chance of selling to someone you really know and understand. If you can’t answer the following questions, chances are that you don’t really know your ideal customer:
How many customers generate 80% of my gross margin, and who are they?
Key points include:
- Shifting ideal customers
- Going beyond market statistics
- Brand promise as a solution
Read the full post, Want To Grow Your Company? Start With Who, on AmbroseGrowth.com.
James Black provides an update on how COVID-19 forced museums and cultural institutions to reshape how they interact with the public and still provide an engaging experience.
As the WSJ noted, “With galleries and museums closed due to Covid-19, online offerings blossomed—giving viewers the chance to experience outstanding exhibitions and masterpieces in a new, digital way.” (12/13/20).
From an analysis of the activities of 20+ institutions around the world, completed via desk research and interviews with various CEOs, board members, curators, and heads of advancement and marketing, among others, several themes emerged.
WHAT did museums and cultural institutions do during the shutdowns?
Covid made more institutions realize that live and digital programming are complementary, not competing. Many institutions built out online offerings; those with pre-existing platforms and capabilities had a distinct advantage in building engagement. Unsurprisingly, musical institutions may have had a head start in cultivating alternative channels (e.g., radio, digital, etc.) But museums quickly adapted to the new situation, expanding and intensifying their existing online activities. A number of smaller players, like the Frick in NY, were scrappy, driving creative executions, perhaps driven by their need to sustain visibility and raise funds.
Audience interest in programming was strong. As the Director of the National Gallery of Art in Washington DC noted, “Audiences are clearly hungry for diversion, learning, enjoyment, and connection during this crisis.”
SO WHAT did they learn from this experience and reapply as they reopened?
Key points include:
- Audience rewards
- Improvement of production value
- How to best reach and engage audiences in the “new normal.”
Amanda Setili asks us to think about how interaction with clients has changed and what expectations will be in the years ahead.
Imagine that it’s three years in the future, in 2024. Largely gone are the days of flying somewhere to meet with a customer for an hour or two. Customer expectations have changed dramatically; they want substance more than just a few hours together.
Instead of a social call, customers in 2024 want substantive gatherings of talent. For example, they value it when you can set up a virtual gathering between your customer, an engineer in California, a SME in New York, and an entrepreneur in Germany.
The way things are done in 2024 are a direct result of everyone going virtual in 2020, plus three years of effort to make virtual gatherings substantively better, rather than just socially distant. It’s become far easier to share data, see and interact with other people, swap ideas, break out into small groups, and even to look the other person in the eye.
No one—myself included—can accurately predict all the innovations likely to take place over the next three years, but I’m pretty certain that many will combine to make virtual gatherings far more effective.
Key points include:
- New skills and perspectives
- Changing expectations
- Changing operations
Read the full article, How Will You Interact with Customers in 2024?, on LinkedIn.
Robbie Baxter shares a video and transcript of this interview on subscription-based business with insights on how to quantify the value of customer relationships.
Revenue from loyal customers is more valuable than anonymous transactional revenue–it’s more predictable and more profitable. But until recently corporate valuations haven’t had a way to distinguish the quality of the revenue based on customer relationships.
Dan McCarthy, Assistant Professor of Marketing at Emory University’s Goizueta School of Business, is advocating for a new approach, known as “Customer Based Corporate Valuation.
I recently talked with Dan about why customer lifetime value is such an important and misunderstood metric, how to rethink the way companies are valued by the public markets, and what all of this means for subscription businesses.
Robbie Baxter: Can you explain customer based corporate valuation for the lay person.
Dan McCarthy: Customer base, corporate valuation at its most basic level is an enlightened way of forecasting a company’s future revenues, but driving that revenue forecasts off of what the customers will do. So hopefully it’s pretty intuitive that pretty much every major valuation method starts with some sort of a revenue forecast. And the main thing that we would say is every dollar of revenue has to come from a customer who’s making a purchase.
Key points include:
- Customer base corporate valuation
- Customer lifetime value
- The changing landscape of customer data
Read the full interview, How to Quantify the Value of Your Customer Relationships–An Interview with Professor Dan McCarthy, on LinkedIn.
Robbie Kellman Baxter shares her latest post on key subscription-based business strategies. This week she covers the new metrics of subscription models.
Selling is hard.
You have to find the prospects, attract their attention, build their trust, understand their needs and goals, and then get them to sign the agreement.
It’s much easier to keep the customers you have, and focus on extending and expanding that relationship.
That’s why there’s been an explosion in the “Anything-as-a-service” models (XaaS)–in the business world.
If you’re in sales, and moving to a subscription model, or even if you’re already selling something as a service and need a refresher, here are some tips to help you attract, engage, retain and expand relationships with the most profitable customers.
From Big Game Hunting to Farming
In a traditional business, the goal of selling is to get the customer to buy. That moment of transaction is when you’re done—hooray! And you go out to sell the next account. It’s like big game hunting, and you’ve brought in the woolly mammoth and left the carcass on the floor of the cave while you go out to win the next big deal.
But today, with SaaS and the emphasis on recurring revenue, the goal is to get the customer to come and stay. In this Membership Economy, it’s all about building a long-term relationship, with an emphasis not just on the initial transaction but on extending and expanding that transaction over time. If you need to optimize for lifetime value, you need to bring in the right customer (a customer who is going to get value out of what they’re buying) and then you need to optimize the customer experience for engagement and retention.This means that it’s not enough to close the deal–you also want to make sure that they are onboarded for success, and that your colleagues are tracking engagement.
Key points include:
- The importance of underlying metrics
- The focus on recurring revenue
- Developing the customer relationship
Read the full article, B2B Subscription Secrets for Sales: How to Build a Forever Transaction with Your Customer, on LinkedIn.
David A. Fields shares a blog post on the omnipotent power of gratitude and how it can serve your consulting practice. Extra bonus tips included in the comments.
At this time of year, one word is bandied about with unusual frequency. It turns out that word can help you win more consulting business.
Each Friday I pause to consider everything I have to be grateful for. Family, friends, a thriving business, homemade banana-chocolate cream pie. Some wise folks do this exercise every day. Others limit their gratitude to a day here or there such as Thanksgiving (in the U.S.) or when they exchange gifts.
Gratitude is terrific. Warm and snuggly as a cashmere afghan. But how does that one word help your consulting firm?
Key areas covered include:
Read the full post, Five Supremely Practical Ways Gratitude Benefits Your Consulting Firm, on David’s website.
Azim Nagree explains which methods of communication work best during a pandemic and why.
When companies ask me how to accelerate sales or improve retention, I tell them a story. I needed to purchase a sign for my wife’s French pastry shop. I spoke with the front desk clerk who said that it would be around $90. A few days later, I got the final quote from the sales person – $265. And with that, I was out. The sales person lost the deal. But to their credit, they called me (instead of emailing me again). Within 5 minutes, the misunderstanding was resolved and the deal was closed.
Pre-Corona, reps gravitated towards email and/or Slack and/or text. Post-Corona, video conferencing is all the rage. But the reality is that savvy sales people will use a combination of different channels to move a prospect through the funnel to close.
So when do you use the phone vs email?
The main points of this article are:
- Clarifying communication needs
- Identifying customer needs
- Confirming details
Read the full article, Use the phone to accelerate sales, on LinkedIn.
Carlos Castelan’s company blog provides five questions to help you think about and prepare for the future post COVID-19.
To say that 2020 has been a challenging year for everyone is an understatement. The last six months have brought an enormity of difficulties and change to both the world of retail and the global population. While we don’t have the fabled Sports Almanac to identify future results, we wanted to share five questions that we have used with our clients to help plan for the second half of the year:
1: How are you supporting your current employees and remaining agile to meet new opportunities?
COVID-19 has disrupted our lives and added challenges from homeschooling young children to caring for family members. This is no ordinary time and it is also an extraordinary opportunity for leaders to demonstrate empathy for what is happening in their team’s lives.
It’s imperative to demonstrate to all employees that people come first and that their whole lives are welcome at work regardless of whether the impacts are visible. This can take the form of extending certain benefits to help manage through those challenges such as flexible work schedules, childcare reimbursements, and family care leave. It means providing adequate sick leave and income stability to those battling the virus to ensure their recovery and the safety of their colleagues. Target, for example, temporarily raised wages, provided free backup childcare for loved ones, and up to 30 days of paid leave for team members 65 or older, pregnant, or with underlying medical conditions.
This is also a critical moment to be agile to meet new opportunities. Essential businesses are having to flex up to meet a surge in demand. How can they quickly and safely identify and onboard talent? As retailers accelerate digital transformation initiatives like online ordering and curbside fulfillment, how can they shift resources to accelerate and deliver on those initiatives? Nowhere was this more critical than Walmart, the nation’s largest grocer, which has aggressively leaned into curbside pickup. To rapidly hire over 150,000 team members, they launched an expedited recruitment process and partnered with companies across restaurants, hospitality, and retail that had furloughed workers, in some cases going from application to offer within 24 hours.
The remaining four questions explore:
- Customer retention and relationships
- Impact on your industry and and competitors
- Impact on suppliers and supply chain
- Lower revenue
Read the full article, Back to the future: five questions to help you jump ahead in 2020, on the Navio Group website.
Kaihan Krippendorff provides three signposts that can direct your organization towards a successful pivot.
If people try to tell you that pivoting is the new thing, that it’s the fresh Silicon Valley approach to business designed for today’s fast-paced digital world, don’t believe them. Consider Fairfield University, a private school founded just outside of New York in Fairfield, Connecticut, by the Catholic Church – a 2,000-year-old organization.
In 1941, the society that runs the Jesuit school system had acquired two properties and were finishing renovations on them. One would become a university for college students and the other a preparatory school for younger boys, both on the site of what would become Fairfield University. The plan was to open the university first while renovations on the prep school were still underway.
But then, on Dec. 7, just before the university was scheduled to open, Pearl Harbor was bombed, pulling the United States and nearly all of its college-age men into war. Concerned that they would have a school with no students to fill it, the priests engineered a classic, Silicon Valley-style pivot. They moved the prep school (for younger boys) into the finished building and opened it first.
The signposts are:
-Have a purpose