Tag Archives: Maker

What’s Your Exit Strategy – Both Timing and Price? Four Considerations

Situation: A CEO is considering an exit strategy for the company that she founded. The company has been very successful, and the CEO wants to optimize the value of the company on sale. She seeks advice on how to both maximize the company’s value and how to best prepare for a sale. What’s your exit strategy – both timing and price?

Advice from the CEOs:

  • Value is tied to revenue and profit growth. Revenue growth is based on expansion of the customer base and reshaping the product offering to optimize its market appeal.
    • Consider a usage-based price for the offering. Accompany this with a range of usage offerings based on current customer use patterns.
    • Consider tiered pricing or pricing/use to access lower tiers of the market.
    • Consider bundled products, for example along with complementary products of another company with whom marketing partnerships could be formed.
  • As part of the valuation exercise, determine the best exit strategy and timing:
    • Identify the companies that could be buyers.
    • In each case, identify why they would buy the company.
    • The most compelling reason to purchase the company will be strategic, not financial.
    • Identify the key decision maker in each of the potential buyers.
    • Also identify any factors that would make the company less desirable to any potential acquirers and develop remedies for these.
    • This exercise may help to plan the timing and to understand more about the price that could be fetched.
  • To appeal to a buyer, optimize the organizational chart.
    • If the CEO occupies too many seats on the chart this presents a substantial risk to an acquirer if the founder leaves.
  • Evolve the organizational structure to support growth.
    • If there is no compelling reason to sell in the near term, then staff the company with professional marketing, financial talent, and so on.
    • A lack of talent in key positions limits both the company’s growth and its appeal to potential buyers.
    • In the case of this company, the most important hire will be in marketing. Note that marketing does not equal sales. The company is creating a market and convincing people to change their habits. This is a marketing task, not a sales task.
    • If the analysis of the factors mentioned above determines that now is time to sell, then stay slim.

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How Do You Rapidly Ramp Sales? Three Tactics

Situation: A company’s key marketing partner has excelled at analyzing key potential customers, the right decision makers within those customers, and completing sales to them at a premium price. The CEO wants advice on what more they can do with this partner to leverage and boost sales. How do you rapidly ramp sales?

Advice from the CEOs:

  • The company’s current strategy is to start a customer on the company’s product to add additional functionality. Once the customer learns to use the product, they work to extend the customer to other products from the company.
  • It is difficult to win with a “push” sales strategy. The situation described is like that of Linux competing with Microsoft. Everyone knows how to use MSFT, and for most of what they do MSFT is good enough. It takes a particular level of pain or need to justify the pain of transitioning to something different.
    • The only alternative is to show a significant pay-back for the pain that the customer must endure in order to convert, large scale, to another solution.
  • The company’s target customer will be the key manager who will shut down the line because they don’t have the company’s solution. This forces the purchase decision above the manager’s boss to the executive suite. The company’s solution then becomes the alternative that saves the day.
    • Seek a forum or trade show that will put the company’s solution in front of these key managers. Through this venue, create buzz that will make the company’s the booth to visit.
    • It is critical to have a compelling story for potential users when they respond to this gambit and visit the company’s booth.
  • The solution to this dilemma is the same as the solution to the company’s overall strategy.
    • The company’s offering, at this point, is just another alternative available to the customer. While the company has a compelling product, it is not world changing and the company lacks the market presence to make its solutions first to adoption.
    • The solution is to focus. Stop what the company is currently doing and take the time to develop a technology strategy.
    • Once this strategy has been defined, focus efforts on developing the killer application that becomes the reason that people must come to the company to satisfy their need.
    • Once this killer application has been developed, positioning and gaining traction with the customer will become easier.

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How Do You Boost Awareness of Your Products and Services? Seven Suggestions

Situation: A CEO wants to increase awareness of company products and services. They have a strong customer list and a long history of successful projects. How to they increase awareness among potential customer decision-makers? How do you boost awareness of your products and services?

Advice from the CEOs:

  • There are three stages to a good awareness strategy:
    • Visibility
    • Credibility
    • Profitability
  • The company already has great products and services. Hire a quality PR Firm and have them highlight this for company trade shows, blogs, YouTube, etc.
  • The objective is not broad awareness but getting to specific decision-makers – what will get to them?
    • Generate broad awareness of company capabilities through entertaining videos to excite the team members of prospect companies who report to the decision makers.
    • This is a complex strategic sell. If recommenders think that the company’s stuff is cool they will pass the word – create a campaign to encourage this.
  • The priority is to close more business. Why not brand or co-brand and promote the company’s products? This may ease reaching the target decision makers.
  • The PR advice is good – but how will this play to the crowd that’s writing the check?
    • What makes current customers comfortable working with the company? Is it repeatability?  Credibility? Creativity? Referenceability? Decide which it is and highlight it.
    • Everything that the company is doing on the “cool” side falls under the marketing strategy. Efforts in PR and sales must support this marketing strategy.
  • Consider a campaign on YouTube – How do the parts of “Sally” work? How did we design it?  This attracts a smaller audience, but it may be the right audience.
  • Within company capabilities, there are two distinctions to clarify – both are important but require different emphasis:
    • Innovating the product
    • Innovating the process – making it happen

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