Internal naval gazing for growth
I am sure as business leaders we have all looked at Excel spreadsheets and wished for delivery of a forecast. Especially when the business revenues have plateaued, the reality is that each quarter we continue a step forward and then a step back with regards to growth.
I often fell into the easy trap of the internal dialogue with:
- Sales teams on the sales funnel. How could be sell more in our current customer base as that was quicker than finding and onboarding new customers?
- Delivery teams on what we could do more of based on the skills and resource at our disposal.
- Finance to maintain control on costs. Ensure we continue to stay profitable on the current revenues.
The common theme here is all this energy is internal focussed and was not focused on the external market and how we make money in that market.
Competitors in the market
When I was challenged on who were our competitors, an easy response was to say we had none. However, this response was based on a very simplistic measure, does anybody deliver the same product portfolio as us? Whilst the technical answer is no. The reality was that when we actually mapped the market we came back with a very different answer.
As we looked at our competitors in the market, not one offered the same portfolio of products. But that measurement of competitors is very different to what the market is buying. Typically, the phrase ‘follow the money’ is used when investigating criminality, it is a useful phase to apply to a Market Map. The Core Customer has problems that need solving. Our competitors were servicing that customer need with different products to us.
Follow the money
Using a Market Map allowed us to see that from our current position, there were some real strengths in the amount of money our core customers spent with us each quarter. I could see which customer type loved us based on the spend levels and whether that spend was growing. Unfortunately, I could see those types who were not in love with us and the spend diminishing. Which competitors were we competing with and what type of products were now beneficiaries of this spend?
Spending Money
It is obvious that from a finance perspective there is a cost to deliver a service. However, until the Market Map exercise I had never tried at a strategic level to align the aggregated pass through revenues to suppliers with a correlation to the incomes from our customer types.
This exercise showed the level of spend with certain suppliers when aggregated was very high. In fact, the dependency on them became a significant discussion for the leadership team on how we scale. Do the products we have identified to scale:
- Create even higher dependencies on these suppliers?
- Give us greater buying power?
- Open the possibility to invest and deliver the service ourselves?
Market Map
Drawing out the marketplace in the market map allowed us to see all the players on the field. We clearly had many competitors. The Market Map gave us a good view of all these players. Players that are chasing the same customer budgets, but with different product propositions. The Market Map also for the first time showed us the spend with our suppliers who support our delivery of services, directly correlated to our income.
A strategy to scale
A strategy to address scaling requires effort. It requires a business to be market focussed.
A Market Map is a methodology that enables you to see who loves you, who are your biggest competitors, and who is holding the most power in the marketplace. It focusses on the 6 market characteristics:
- Customers
- Channel
- Competitors
- Suppliers
- Partners
- Money Flows
A market map is a pragmatic methodology that is key in the decision making as to which products you choose to scale from a Marketing Attribution Framework methodology. Why, because the Market Map shows you at a strategic level the possibilities for scaling and making money from this product.
If you recognise the internal naval gazing in your business, there is a methodology that can be applied. It can identify the right products to scale in the market with a path to achieve scalable growth.
