path to realizing revenue acceleration | stratapult advisors | mark dresdner

1 © Stratapult Advisors 2013

A Path to Realizing Revenue Accelera3on Strategy through Implementa;on

Mark Dresdner Stratapult Advisors [email protected] StratapultAdvisors.com


© Stratapult Advisors 2013

All Rights Reserved

Reproduc;on of any por;on of this document is not permiCed without wriCen consent of Stratapult Advisors, LLC. You or your company cannot copy this Intellectual Property informa;on or republish it in any other form, in print or electronically, without wriCen approval.

For ques;ons, contact Mark Dresdner at [email protected]

LEGAL NOTICE


A clear strategic plan and implementa3on approach facilitates drama3c business growth, because it provides strategic clarity and helps leaders bust out of the shackles of run-‐the-‐business ac3vi3es.

•  Do you truly want to realize drama;c business growth—improving both revenue and your company’s value? What’s holding you back?

•  There are two frequent factors killing a CEO’s ability to realize business growth well above the market: –  Lack of strategic clarity: Defining what the company should achieve and by when and then ploZng a path to realize the vision

–  Inability to breaking out of day-‐to-‐day run-‐the-‐business ac3vi3es: Channeling energy toward transforma;onal changes, not incremental tweaks, daily “emergencies,” and rituals

•  Strategic clarity coupled with a pragma;c implementa;on plan helps repriori;ze ac;vi;es so that business leaders can be real drivers of their company's future, not passengers

INTRODUCTION


A roadmap built on strategic and implementa3on considera3ons provides the most effec3ve path toward revenue accelera3on.

ROADMAP TO REVENUE ACCELERATION

Implementa;on: Path to Desired Des;na;on

Vision and Strategy: Where We Want To Go

Current Situa;on: Where We Are Today

Customer Segments

Compe;;ve Landscape

Industry Dynamics

Company’s Current State—SWOT

Vision and Goals

Target Customer Segment

Market Differen;a;on

Brand Posi;on

Implementa;on Plan

Con;nuous Customer Feedback

Customer and Market Intelligence

Virtuous Cycle of Tes;ng and Improving

“Tac3cs without strategy is the noise before defeat.” Sun Tzu, Author of The Art of War

Making the Brand Real – All Customer Touch Points

Marke;ng Plan: Promo;on, Product, Price, People, Place

Investment Alloca;on: Direc;onal Policy Matrix


Segment the market into customer segments, this will help you iden3fy your target customers.

Before choosing your target customers, ask the following: • What are the different customer segments?

•  How large are the customer segments?

CUSTOMER SEGMENTS

Psychographics

Demographics

Behavioral

Needs

Geographic

Industry, company size, stage in lifecycle (e.g. re;red, recently married), gender, age, and occupa;on

Values, personality type, and lifestyle

Brand loyalty, shopping and buying habits, usage by ;me (e.g. day of week, length of usage), affilia;on to loyalty programs, and who pays (e.g. customer or employer)

Region, city, climate, and popula;on density

Service levels, financing terms, product aCributes, and delivery ;me.

ATTRIBUTES TO CONSIDER WHEN CREATING CUSTOMER SEGMENTS


Understanding a company’s compe33ve advantages and disadvantages is core to determining how to best compete.

COMPETITIVE LANDSCAPE

Low High

ATTRIBUTE YOUR FIRM COMPETITOR A COMPETITOR B COMPETITOR C

High Price

Product Quality

Product Func;onality

Brand Strength

Customer Service

Distribu;on Network

Focus on aCributes most important to the industry

and customers.


An understanding of industry dynamics highlights opportuni3es for compe33ve advantage and pricing power as well as challenges that need to be managed.

INDUSTRY DYNAMICS

Supplier Power •  Brand reputa;on •  Pricing strength •  Alterna;ve customers •  Product/service quality •  Customer rela;onship

Industry Rivalry •  # of firms •  Market share •  Level of differen;a;on •  Variable vs. fixed costs •  Industry size and growth

Buyer Power •  # of buyers in market •  Volume, other terms •  Choice of op;ons •  Cost of switching vendor

Threat of Entrants •  Barriers to entry •  Capabili;es required •  Compe;;ve resistance

Use framework for a general discussion on

important industry factors.

Threat of Subs3tutes •  Capability and cost •  Switching costs •  Brand strength •  Trends

Environmental •  Poli;cal •  Economic •  Social •  Demographics •  Technological


SWOT analysis provides a concise summary of items to consider during strategic planning.

COMPANY’S CURRENT STATE—SWOT ANALYSIS

STRENGTHS •  Strong brand recogni;on

•  Large customer base

•  Personal rela;onships with many key customers

•  Broad global network of partners

•  Low cost material via volume discount from suppliers

WEAKNESSES •  An;quated systems causing billing errors and inefficient labor

•  High dependence on leads from one strategic partner who’s own volumes are declining

•  Online presence is limited and less than some compe;tors

•  30% of revenue is from four customers – if they ler it would provide a cash flow strain

OPPORTUNITIES •  Develop online tools to help enhance customer communica;ons and sales

•  Expand distribu;on channels—including online

•  Deploy an efficient and effec;ve opera;ons system—lower costs and improve customer experience

•  Upgrade inbound marke;ng technology to provide addi;onal and beCer quality leads for Sales

THREATS •  New local compe;tors compe;ng on price

•  Some important sales channels are not available due to compe;tors seZng up barriers

•  Historical value proposi;on is losing its relevance as the needs of the market change

•  Transparency for customers is increasing and sparking a price war


Harvest/Divest • Prune • Prepare for exit • Maximize cash genera;on

Maximize Cash Flow • Limit investment to clear returns • Choose profit over market posi;on • Seek opportunis;c sale

Opportunis3c Expansion • Search for ways to strengthen posi;on, e.g. acquisi;on

• Seek niches; specialize • Monitor; be prepared to retreat • Joint venture, license, or divest, if unable to strengthen posi;on

Maximize Profitability • No non-‐essen;al investment • Don’t accept loss orders • Profit is top priority • Opportunis;c sale

Limit Expansion • Emphasize segmenta;on • Invest for earnings growth/cost reduc;ons

• Focus on vulnerability and con;ngency planning

Aggressive Growth • Assess risk of challenging for market leadership

• Sacrifice current profit for strengthened posi;on

• Product development to fill out weaknesses

Maintain Profitability • Strictly contain risk • Sacrifice share for profitability • Maintain posi;ve cash flow • Reduce fixed costs • Monitor for opportunity to divest

Maintain Leadership • Invest for preserva;on of posi;on in most aCrac;ve segments

• Start containing risk by choosing profit over high cost expansion

• Expand if growth is possible with low risk

Defend Leadership Posi3on • Hold leadership market share • Diversify • Accept moderate near-‐term profits with nega;ve cash flow

• Intensive product and market development

Busine

ss Stren

gth / Co

mpe

33vene

ss

Market Aarac3veness High Low

High

Low

Manage for Profit Opportunis;c Invest

INVESTMENT ALLOCATION: DIRECTIONAL POLICY MATRIX

Plocng each product and service on the Direc3onal Policy Matrix (Compe33veness vs. Market Aarac3veness) provides a recommenda3on on the investment level in each.







Vision and Goals



Brand Posi;on

Implementa;on Plan


Customer and Market Intelligence

Virtuous Cycle of Tes;ng and Improving




Customer Segments

Compe;;ve Landscape

Industry Dynamics

Company’s Current State—SWAT



A company’s vision provides the founda3on for all decision making.

TODAY IN 3 YEARS

Revenue $42m $80m

Profit (%) 6% 12%

Market Posi;on / Share

4 / 7% 2 / 13%

Geography US US, Ireland, Singapore, China

Products Full service xyz Full service + self service xyz

Staff 49 54

Other

Opera;onal technology comprises 7 loosely connected programs

Opera;onal technology has 4 or less integrated programs

VISION & BUSINESS PLAN GOALS

Focus on aCributes core to the vision.


Customer segmenta3on and iden3fying who is a target is a core driver of company profitability.

CUSTOMER SEGMENTATION & TARGETS: BACKGROUND

WHY SEGMENT CUSTOMERS

•  Trying to market and sa;sfy everyone in the market will result inefficiencies: –  Marke;ng messages that fail to deeply resonate with anyone

–  Confusion within opera;ons and strategic planning, e.g., what’s more important, low cost manufacturing or product innova;on and quality?

•  Inves;ng ;me and money aCrac;ng the wrong customers will be a drain on your return on investment

SEGMENTATION CONSIDERATIONS

•  Customers can be segmented using a variety of aCributes: –  Geography –  Demographics –  Psychographics: values, lifestyle –  Behavioral: loyalty, buying habits, usage by ;me, who’s paying (company or self)

–  Needs: service levels, financing terms, product aCributes, delivery ;me

•  Effec;ve, prac;cal target customer segments: –  Are iden;fiable (one can’t market to those one cannot reach.)

–  Have needs that can be met –  Can sustain aCrac;ve profits (margin and volume)


Dis3nct customer segments help one iden3fy groups of customers and their aaributes, and hence their aarac3veness to the business.

CUSTOMER SEGMENTATION EXAMPLE

Company or Client

Pays

Flyer Pays

Personally

Usage Level Few Many

Length of Stay Short Long Short Long

Who

Pays

Trips per Year

Corporate, office bound

Corporate, office bound

Execu;ve corporate road warrior

Project / trainer / corporate road warrior

Consultant

Small business: execu;ve or consultant

Wealthy leisure traveler, could be baby boomer

Small business: execu;ve or consultant

Wealthy leisure traveler, could be baby boomer

One or twice a year leisure traveler

Small business, office bound

One or twice a year leisure traveler

Small business, office bound

CUSTOMER SEGMENTATION FOR AIR TRAVELERS


Successful companies are fana3cal about one discipline of excellence.

DISCIPLINE COMPANY TRAITS EXAMPLE BRANDS

Opera3onal Excellence

•  Efficient standard opera;ng procedures •  Simple, quick customer service •  Predictable products and services

•  Dell •  McDonalds •  Amazon

Product Leadership

•  Innova;ve products and services •  Entrepreneurial culture that rewards out-‐of-‐the-‐box

thinking

•  Bose •  Apple •  Porsche

Customer In3macy

•  Flexible products and services to meet each customer’s needs

•  Staff with customer contact have significant autonomy—keeping the customer happy is of primary concern

•  IBM •  St Regis •  Nordstrom

MARKET DIFFERENTIATION: DISCIPLINES OF EXCELLENCE

•  While all disciplines (opera;onal excellence, product leadership, and customer in;macy) need to be executed to an acceptable level, a company should focus on one disciple of excellence: – Trying to make more than one core to the brand will result in diluted, sub-‐op;mal results – Aiming to be all things to all people will create an offering that is mediocre at best


Stressing your points of differen3a3on to your customers and internal staff helps your company stand out.

BRAND DIFFERENTIATION: POINTS OF DIFFERENCE

Current Reasons •  … •  ...

•  …

Future Reasons (ones that you plan on crea3ng) •  ...

•  … •  …

Reasons your product / service stands out from your compe;tors for your target customers:


A brand posi3oning statement defines your brand.

BRAND POSITIONING STATEMENT

Target customers: types of customers the company is marke;ng to Frame of reference: where the brand fits within the market Point of differen3a3on: what makes the brand special Benefits for the target customers: why customers would prefer the product or service

INGREDIENTS FOR A BRAND POSITIONING STATEMENT

SAMPLE POSITIONING STATEMENT

To the ;me-‐starved home owner with a lawn, one applica;on of WEEDS GOODBYE kills weeds in your lawn completely and quickly, with visible results within hours without effec;ng the grass. Other weed killers destroy grass or take mul;ple applica;ons over;me to work. In the baCle with weeds, do not waste ;me or risk losing your lawn, use WEEDS GOODBYE.


Every customer touch-‐point either for3fies or contradicts the brand posi3oning.

MAKING THE BRAND REAL IN CUSTOMERS’ MINDS

EXAMPLE OPERATIONAL ACTIONS TO IMPLEMENT A BRAND POSITIONING (Focus on speed and service at a retailer)

•  A brand’s posi;oning (its value proposi;on) cannot be a secret within marke;ng, it must be a compass for the en;re company

•  Every customer touch-‐point either for;fies or contradicts the brand posi;oning

Receiving Email Response

Calling Customer Service

• Was customer’s ques;on answered quickly? (speed) • Did wording reiterate the brand, e.g. “I’ll process this order right away and have it in the mail today.”? (service, speed)

• Was the transac;on fast? (speed) • Did the cashier thank the customer? (service) • Was the cashier friendly? (service)

• Was the response quick? (speed) • Did the response address the customer’s ques;ons? (service) • Did the wording reiterate the brand? (speed, service)

• Did an associate offer assistance? (speed, service) • Was the associate friendly? (service) • Was the customer able to find what they wanted easily? (speed)

Paying Cashier in the Store

Walking Around the Store


The marke3ng plan—product, place, promo3on, price and people—provides the framework to connect target customers with the product, and hence drive sales.

Product Place

People

Price Promo3on

MARKETING’S 5 PS

MARKETING PLAN

Product types, func;onality, and service

Adver;sements for customer acquisi;on and reten;on

Distribu;on channels, customer touch-‐points

Price op;miza;on, considering segments and profitability

Culture, compensa;on, and tasks to support delivering the brand promise







Vision and Goals



Brand Posi;on

Implementa;on Plan


Con;nuous Improvement Based on Learnings




Customer Segments

Compe;;ve Landscape

Industry Dynamics

Company’s Current State—SWAT



An implementa3on plan that is simple to follow and agreed upon by the whole team will provide an efficient roadmap and help keep expecta3ons in-‐sync.

IMPLEMENTATION PLAN

KEYS TO EFFECTIVE IMPLEMENTATION PLANNING •  Use simple visual plan. GANTT charts are a prac;cal op;on •  Develop with the team to gain buy-‐in and alignment •  Review for dependencies between tasks •  Define what, when and how for each task •  Ini;ally develop the task level at a high-‐level and create more details as one nears execu;on for the task

•  Remain flexible, adjus;ng the plan as new lessons are learned (customer feedback, compe;tor moves, new ideas from the team)

EXAMPLE GANTT CHART


Gaining regular customer feedback helps keep the company in-‐touch with a constantly changing market.

CONTINUOUS CUSTOMER FEEDBACK

BEGIN NOW… …VIA AN INCREMENTAL, ITERATIVE APPROACH, LEARN ALONG THE WAY

YOU CAN’T WAIT UNTIL YOU HAVE A PLAN BASED ON PERFECT MARKET INFORMATION, BECAUSE YOU NEVER WILL •  Market is always changing •  Customer feedback is limited. Oren your idea isn’t a solu;on they have seen. (Customers didn’t know they wanted the iPhone, Walkman, or Model-‐T Ford un;l they saw the product.)

•  With a general understanding for the market as it stands today, your vision is unlikely to be so far off that lots of work will be wasted


Lessons Learned

Improvements

Ac3ng on lessons learned to make improvements regularly to the strategy will keep the company nibble and relevant in the market.

CONTINUOUS IMPROVEMENT BASED ON LEARNINGS

A series of small changes on the path to a larger change is preferable: lower risk, more manageable, opportuni;es

to quickly incorporate feedback

Con;nuous tes;ng and ac;ng on lessons learned fuels an ongoing pursuit of op;mizing value crea;on


Are you a mid-‐sized or startup company that is ready to accelerate your revenue growth?

Contact Stratapult Advisors to see if we can help!

•  From idea genera;on through implementa;on •  Results, not reports •  Typical results: 10% to 100%+ increase in profit

Learn more by visi;ng StratapultAdvisors.com or contac;ng Mark Dresdner at [email protected]

Mark Dresdner, Managing Director, Stratapult Advisors Mark collaborates with management teams to realize revenue accelera;on as an interim or part-‐;me Chief Revenue Officer. He applies a hands-‐on approach covering strategy development through implementa;on for companies with growth aspira;ons. His experience spans startups to Fortune 500 firms. He has worked as a management consultant at Accenture, led revenue strategies globally—including pricing—at Starwood Hotels, guided strategy and pricing at a $1b avia;on company, and spearheaded growth at por|olio companies held by private equity firms. He has been designated a Cer;fied Pricing Professional from the Professional Pricing Society. Mark earned a Bachelor of Engineering from the University of New South Wales, Australia (Valedictorian) and an MBA from the Kellogg School of Management, Northwestern University (Beta Gamma Sigma).

path to realizing revenue acceleration | stratapult advisors | mark dresdner

Business

product acributes

customer oremployer

ofbuyersinmarket volume

wherewewanttogo currentsituaon

daily emergencies

andlifestyle brandloyalty

shoppingandbuying habits

andoccupaon values