Rcl mc kaskill 4 2011

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Rcl mc kaskill 4 2011

  1. 1. Breakthrough Strategies Engineering High Growth Potential Dr. Tom McKaskill
  2. 2. Personal Experience • Twenty years experience as a practicing entrepreneur. • Founded three software ventures – one in the UK and two in the USA. • Management buy-out of a further software business. • Two acquisitions. • Raised venture capital twice. • Sold all four businesses at a premium. • The leading authority on how to sell a business to a strategic buyer. Author of 22 books for entrepreneurs. • Former Professor of Entrepreneurship, AGSE, Swinburne.Breakthrough Strategies
  3. 3. Objective Identify the strategies of HIGH GROWTH VENTURES which result in increased growth, resilience and profitability.Breakthrough Strategies
  4. 4. Short and Long Term Focus • In the short term we focus on existing products in existing markets. • In the long term we look at changes we can make in the product/market interface and organizational changes to improve growth capability and capacity.Breakthrough Strategies
  5. 5. SHORT TERM IMPROVEMENTSBreakthrough Strategies
  6. 6. High Growth Ventures Are Different • High referral rates. • High repeat sales. • Higher profitability. • More resilient. • Very customer focused. • Lower cost of marketing per sale transaction.Breakthrough Strategies
  7. 7. Referral Rates Drive Growth How likely is it that you would recommend [Company X] to a friend or colleague? “In most industries, this one simple statistic (the Net Promoter Score) explained much of the variation in relative growth rates; that is, companies with a better ratio of Promoters to Detractors tend to grow more rapidly than competitors.” Source: www.netpromoter.comBreakthrough Strategies
  8. 8. The Net Promoter Score Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth. Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings. Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.Breakthrough Strategies
  9. 9. Observations • Customer satisfaction drives repeat sales. • Customer satisfaction drives referral rates. • Unsatisfied customers will shop around. • Very unsatisfied customers will damage your brand and reputation. What creates a satisfied customer?Breakthrough Strategies
  10. 10. Buyer Behaviour ModelBreakthrough Strategies
  11. 11. High Growth Marketing Model STIMULATE NEED SEARCH Satisfaction relates to the entire process EVALULATE BUY DELIVERY USE HELP DISPOSE ENGAGE RE-BUYBreakthrough REFER Strategies
  12. 12. What Problem Do You Solve? The most important role of marketing is to clearly define the problem you solve.Breakthrough Strategies
  13. 13. What Is The Problem Or Need? • Few firms define the problems they solve or needs they satisfy. • Too much focus on products, features and functions. • Their messages are too vague or too technical to help the customer decide. • They fail to use the words or descriptions which their customers use.Breakthrough Strategies
  14. 14. Ask Your Customers • How did they define their problem? • What outcomes were they seeking? • Where did they look? • What search words did they use? • Who did they talk to for advice? • What prior experience did they have? • What would have happened if they had failed to find a solution?Breakthrough Strategies
  15. 15. Who Is My Customer? Target a clearly identified and reachable customer who has the problem you solve or need you satisfy.Breakthrough Strategies
  16. 16. Who Are The Best Customers? • Who buys quickly? • Who refers the most? • Who buys with the least price pressure? • Where do you have the highest competitive advantage? • Where do you have the best fit?Breakthrough Strategies
  17. 17. Describe Your Ideal Customer • Who are they? • Where are they? • What is their demographic and socio economic situation? • Where and how do they shop? • What else do they buy? • What do they read? • Who do they associate with or define themselves as? • Who advises them? • What level of prior knowledge do they have?Breakthrough Strategies
  18. 18. Evaluation Make it easy for the customer to ascertain that your product or service is the right choice for them.Breakthrough Strategies
  19. 19. What Matters Do you understand my situation? Have you solved a similar problem before? Do you have the skills to do the job? This is the threshold issue. If you can’t convince prospective clients that you can solve their problem, nothing else matters. Source: Spiraling UpBreakthrough Strategies
  20. 20. Evaluating Benefits • How does the customer assess the value proposition? • What is the payback period? • What are the problems, costs, delays, risks in the solution? • What information or tools are your competitors providing? • Do you offer a consulting service to map out benefits?Breakthrough Strategies
  21. 21. Expectations Customer satisfaction is directly related to the customer’s expectations. You have to ensure that the correct expectations are set.Breakthrough Strategies
  22. 22. Customer’s Expectation • Prior experience of similar products. • Discussion with friends and family. • Public information (newspapers, articles, internet blogs). • Vendor content (brochures, webpages). • Vendor contact.Breakthrough Strategies
  23. 23. Satisfaction • Related directly to expectation. • Small problems, mistakes and mis-communications can have a big impact. • Don’t ‘exceed the customer’s expectation’ – you make it harder for the next sale. • Be consistent, reliable and predictable.Breakthrough Strategies
  24. 24. Purchase And Delivery You have to make it easy for the customer to buy and take delivery of their purchase.Breakthrough Strategies
  25. 25. Purchase • It is readily available? • It the purchase agreement fair, reasonable, understandable and efficient? • Is it simple and straightforward to pay for? • Is credit available and easy to access? • Is there adequate help available at the point of purchase? • Is the payment process efficient for the customer?Breakthrough Strategies
  26. 26. Delivery • Is it easy to have products delivered or to arrange the service? • Is the delivery efficient, trouble free and stress free? • If you need to dispose of the old item, does the vendor assist?Breakthrough Strategies
  27. 27. Product Or Service UseYour objective must be to ensure you solve the problem or satisfy the need and provide support and help throughout the use experience.Breakthrough Strategies
  28. 28. Customer Engagement Long term engagement of the customer will increase the likelihood of a repeat sale or referral.Breakthrough Strategies
  29. 29. What is the Impact of Better Marketing? • Reduced sales cycle by 10%? • Reduced the time between sales cycles by 10%? • Handle 10% more sales cycles at the same time? • Sell more products to the same customer? • Remove a number of steps out of the sales cycle process? • Receive unsolicited sales orders? • Improve conversion rate of leads to sales by 10%? • Improve the rate of qualified leads by 10%? • Grow overall leads by 10%?Breakthrough Strategies
  30. 30. Further Information Marketing for High Growth Ventures – Forget the spin, apply proven strategiesBreakthrough Strategies
  31. 31. LONG TERM IMPROVEMENTSBreakthrough Strategies
  32. 32. ABS statistics High Growth is Rare! Only 9% will exceed 20 employees and only 6% will exceed $2 million in revenue.Breakthrough Strategies
  33. 33. Market Issues • Size and rate of growth of market. • Degree of competition. • Mature markets compete on price. • Most products compete for discretionary spend – high marketing costs and low conversion rates. • Majority of products and services are not protected and can be quickly copied. • Markets are imperfect and prospects often find it difficult to obtain information on alternative suppliers. Very difficult to establish a leadership position.Breakthrough Strategies
  34. 34. Capacity Issues • Building capacity is slow and requires access to funding. • Few private companies are suitable targets for venture/angel capital thus sources of finance are limited, (1 in 10,000). • There are long lead times involved in building capacity (recruiting and training staff, acquiring equipment, building new plant). • Resources are often lumpy and thus stepping up to new activity levels is problematic (plant, office space, etc).Breakthrough Strategies
  35. 35. Capability Issues • Few business executives have experience with high growth enterprises. • There is little published information on how to manage high growth. • Few advisors have the necessary experience to assist. • The command and control culture inhibits high growth. • Most small firms chase any business they can get and fail to develop sufficient expertise or traction to facilitate growth.Breakthrough Strategies
  36. 36. Business Growth Realisation Turning The Market Profitable Time & Place the Wheel Management Compelling LOW Need Resilience Right MEDIUM Customer Robust HIGH Distribution Margins Channels Strategy Innovation Making Realising it Vision Competitive the Work Scalability Advantage Opportunity SustainableBreakthrough Strategies The 14 Principles of High Growth Enterprises
  37. 37. Growth Potential • Importance of problem being solved. • Degree of ‘fit’ of solution. • Degree of market spread. • Time taken to recognize need, search for solutions, evaluate solutions, purchase, use and measure outcome. • Uniqueness of solution and degree of competition (and ability to sustain competitive advantage). • Ability to scale the product or service.Breakthrough INNOVATION Strategies
  38. 38. Growth Execution • Access to distribution channels. • Ability to generate funding for growth. • Ability to control costs and quality. • Capability to plan and manage organisational growth. • Ability to recruit, motivate and manage staff. • Ability to develop vision, focus and strategy. • Ability to acquire and manage capacity. CAPABILITYBreakthrough Strategies
  39. 39. Growth Rate SIZE High Growth Potential Size is determined by capability Low Growth Potential TIME Growth rate is constrained by growth potentialBreakthrough Strategies
  40. 40. Potential and Execution • Growth Potential • Growth Capability – Time and Place – Channels to market – Compelling need – Strategy – Right customer – Robust margins – Competitive – Resilience advantage – Management – Innovation – Profitability – Sustainability – Scalability – VisionBreakthrough Strategies
  41. 41. Further Information Ultimate Growth Strategies – A practical guide to engineer high growth into your businessBreakthrough Strategies
  42. 42. Breakthrough Strategies Engineering High Growth Potential Dr. Tom McKaskill

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