Situation: A web-based software solution company wants to expand their customer base. They have several large clients, and want to expand their presence both geographically and to additional sectors. How do you position the offering to appeal to a larger audience? How do you expand your customer base?
Advice from the CEOs:
In customer presentations, talk about out-tasking versus out-sourcing. This is less threatening to the customer’s existing IT and analyst infrastructure. It allows you to focus on your strength and to build a pitch that augments the customer’s current capabilities.
Is there a trade-off between customer depth and breadth of adoption?
Test doing both on a limited scale. Go deeper in four accounts, and simultaneously focus on one application that you can rapidly sell to 20 accounts.
This exercise will help you to find the right balance.
Look at customers with whom you have had early success. Those customers are proof cases. Look for similar prospects who will respect the experience of the early adopters.
Take a current client who has had success with your applications. Go to similar state and regional companies who will respect the first company’s experience. This will help you to create a national presence in a sector or industry.
Build strategic alliance partnerships.
For example, take a potential customer that wants to be an application service provider.
Look for other companies serving that customer who could benefit from an alliance with your company. Build an alliance to offer bundled services to the potential customer.
If you do not have someone in this important business development role, you need it.
The Association of Strategic Alliance Professionals is a great place to start strategic alliances.
Work more deeply with your current clients. Offer additional applications, subscriptions and offer combinations of services.
Situation: A company works primarily with early stage/rapidly growing companies. To extend their service offering, they have alliances with corporations which are interested in these companies as sources of innovation. The alliances have helped them to gain new customers, but the CEO is curious whether he can gain additional revenue from these alliances. How can you monetize marketing alliances?
Advice from the CEOs:
Match making is a valuable resource – regardless of where your company is located or the customers that you serve. Companies are less likely to pay for something that they perceive as having received free in the past, but are more than willing to pay for options that will enhance both their top and bottom lines.
Look at ways that you can make your services more valuable to your current corporate alliance partners. How can you help them make more revenue, or enhance their bottom lines through a win-win revenue-sharing relationship?
Become a match maker and get a fee. Offer your alliance partners opportunities that are more intimate than speed dating. Make sure that you are playing both a key introductory and ongoing role.
Use speed dating to match companies and funding sources. Invite investment bankers or private equity firms. Charge a 1-2% match fee if they do a deal.
Simplify your model. Who is your real audience – who is the constituency that you can best serve?
The most valuable deals and matches are those that offer ongoing revenue opportunities to your alliance partners. This is where you can offer them the most important value – a value for which they will pay.
Interview with Dirk Boecker, President, Toto Consulting
Situation: Through the technology revolution in medical diagnostics, products in some markets have become commoditized. For example, a proliferation of low cost blood glucose monitoring products has driven down price while increasing incidence and prevalence of diabetes has driven up demand. How do you create new value in a commodity market?
Taking a broader view of the market is key. Analyze the entire customer experience, not just your segment. Assess markets and industries surrounding your primary offering and look for un-served interfaces and gaps.
Where you find opportunity, elevate your offering to the next level by integrating your product as component. Create a compelling advantage but avoid unnecessary adaptation of your existing product or service.
Blood glucose monitoring is used to support insulin and diet adjustment in diabetics, a disease which is accompanied by a number of complications and complex to manage. Can your monitoring technology become part of a broader service offering, or even part of a personalized solution? Can you move higher up in the value chain?
Begin your transformation at the first signs of commoditization. Being first brings a huge advantage.
Once you identify an unmet need, consider working with related industry groups to create new standards addressing these gaps. Implementing the resulting standards will give you a new competitive advantage against your competitors.
Find other applications for your product or service. Consider new applications for the components used in your current offering. Find new customers outside of your historic customer base. Consider alliances with other companies experienced with the new opportunities you find.
Within your own organization begin a process that routinely analyzes the customer experience and general needs beyond your current offering. Working with an outside consultant can help by adding a new perspective.