While the economic landscape is changing with this ever evolving COVID-19 situation, some SMB business owners are either conceding too early by putting a dead stop to marketing or are jumping to their answers for a possible pivot, not knowing the full range of questions that need to be answered. Being a digital marketing/business executive for the past 10 years, as an ex university teacher in the agile entrepreneurship space and as a student of business for 6 years of academic specialisation prior to that, I felt an urge to share a framework of questions that business owners can go through to reach a more comprehensive solution, a well considered pivot. Not just that, how to actually do that so it is still fluid and can be modified on periodic basis. I\’d suggest you order some different coloured sticky notes if you aren\’t stocked up or if you\’d like to do it online, paper free, sign up for a free Lucid Chart account for a BMC canvas.
“The difference between market takers and market makers isn\’t product innovation, it is business model innovation.” Vala Ashfar – Salesforce
This model, might be familiar to many, is a 1-page view of the entire business; a Business Model Canvas.
QUESTION# 1: WHAT ARE YOUR KEY CUSTOMER SEGMENTS?
Definition: Customers comprise the heart of any business model. Without profitable customers, no company can survive for long. In order to better satisfy customers, a company may group them into distinct segments with common needs, common behaviors, or other attributes. A business model may define one or several large or small Customer Segments.
Considerations: When you had your cafe open, you knew what the 60+ y.o lady from a block away likes to eat with her skinny latte while reading a newspaper that you had ready for her when she walked in at 8.30. Now you are only trading online. Or in a B2B business, you were offering bespoke specialised consultancy to half a dozen clients and charging 5-figure retainers, now you are considering converting your IP to an online course and sell it to masses on a 2-figure fee. Not as bespoke but still valuable and a game of masses. Different personas, different reasons to buy from you. Consider redoing your business persona mapping using this free tool: www.hubspot.com/make-my-persona
QUESTION# 2: WHAT ARE YOUR NEW VALUE PROPOSITIONS?
Definition: The Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment. The Value Proposition is the reason why customers turn to one company over another. It solves a customer problem or satisfies a customer need. Each Value Proposition consists of a selected bundle of products and/or services that caters to the requirements of a specific Customer Segment. In this sense, the Value Proposition is an aggregation, or bundle, of benefits that a company offers customers.
Considerations: The reason they are buying from you might be different now. Maybe ’30 years in business\’ is not as strong a value proposition as ‘free instant delivery’ and ‘available to order from 48 suburbs’. Here’s how you can write a value proposition;
- Identify all the benefits your product offers.
- Describe what makes these benefits valuable.
- Identify your customer’s main problem.
- Connect this value to your buyer’s problem.
- Differentiate yourself as the preferred provider of this value.
QUESTION# 3: WHAT ARE YOUR NEW ‘CHANNELS’ TO COMMUNICATE AND DELIVER YOUR PRODUCT/ SERVICE?
Definition: The Channels Building Block describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition Communication, distribution, and sales Channels comprise a company’s interface with customers. Channels are customer touch points that play an important role in the customer experience. Channels serve several functions, including:
• Raising awareness among customers about a company’s products and services.
• Helping customers evaluate a company’s Value Proposition.
• Allowing customers to purchase specific products and services.
• Delivering a Value Proposition to customers.
• Providing post-purchase customer support.
Considerations: This is an area where I won\’t just give you the question but will be happy to give you the answers as this is what I do for my professional specialisation. If you’re unsure how to pivot on this or where to get started, I am happy to offer a free 30-minute slot to you for a quick brainstorm. You can book a meeting with me here: app.hubspot.com/meetings/sami14
QUESTION# 4: (RE) DEFINE YOUR CUSTOMER RELATIONSHIPS?
Definition: Relationships can range from personal to automated. Customer relationships may be driven by the following motivations:
Considerations: Soft-acquisitions, CRMs and nurturing methodologies in place is now more important than ever. When the situation stabilises, you would want a lever you can pull to increase the demand and enquiries. If you have the above 3 figured out, you will be able to increase the demand of your product at will. With your competitors possibly making hasty calls and dropping off these essential costs, there could be an increased opportunity available to you to silently grow your ‘latent market share\’. Again, an area of my personal specialisation, if you\’d like to chat about your specific case,
QUESTION# 5: WHAT ARE YOUR NEW ‘REVENUE STREAMS’?
Definition: The Revenue Streams Building Block represents the cash a company generates from each Customer Segment. If customers comprise the heart of a business model, Revenue Streams are its arteries. A company must ask itself, For what value is each Customer Segment truly willing to pay? Successfully answering that question allows the firm to generate one or more Revenue Streams from each Customer Segment. Each Revenue Stream may have different pricing mechanisms, such as fixed list prices, bargaining, auctioning, market dependent, volume dependent, or yield management. Revenue streams could be one off payments or could be recurring retainers for ongoing development and management of your client\’s deliverables.
Considerations: If you and another related (non-competing) business know a 100 customers each, you can run collab campaigns where both of you promote each other, theoretically speaking it will get an exposure to 100+100= 200 prospects. Especially suitable for a services business, consider changing your delivery to online classes for a small fee for quick gains or even free for lead-gen or super inexpensive ‘foot in the door sales campaigns\’ so when we recover from COVID-19 situation, you have a scalable source of warm ‘clients\’ you can scale up.
QUESTION# 6: WHAT ARE YOUR KEY RESOURCES?
Definition: The Key Resources Building Block describes the most important assets required to make a business model work. Every business model requires Key Resources. These resources allow an enterprise to create and offer a Value Proposition, reach markets, maintain relationships with Customer Segments, and earn revenues. Different Key Resources are needed depending on the type of business model. A microchip manufacturer requires capital-intensive production facilities, whereas a microchip designer focuses more on human resources. Key resources can be physical, financial, intellectual, or human.
Considerations: You probably need less of interior cleanup and decoration maintenance, less of utilities for your brick and mortar. Maybe more resources on your logistics front to get your products to your customers and most importantly, more communication and marketing to deliver a message of stability, compassion and service to your current and new customers.
QUESTION#7: WHAT ARE YOUR KEY ACTIVITIES THINGS YOU MUST DO FOR THE BUSINESS TO SURVIVE? Definition: The Key Activities Building Block describes the most important things a company must do to make its business model work. Every business model calls for a number of Key Activities. These are the most important actions a company must take to operate successfully. Like Key Resources, they are required to create and offer a Value Proposition, reach markets, maintain Customer Relationships, and earn revenues. And like Key Resources, Key Activities differ depending on business model type. For software maker Microsoft, Key Activities include software development. For consultancy McKinsey, Key Activities include problem-solving. And for any business in any industry, online voice, customer acquisition (both soft-acquisition and hard-acquisition) and retention planning should be a key activity right now.
Considerations: Those who fail to plan, plan to fail. While stopping all cash outflows immediately might seem like an easy way out, taking cash out of the bloodlines of your business can result in irrecoverable losses or a lost opportunity to outrank and outsmart your competitors who might be committing this mistake at the moment.
QUESTION#8: WHAT ARE YOUR KEY PARTNERSHIPS THE NETWORK OF SUPPLIERS AND PARTNERS YOU NEED TO BE ABLE TO DO BUSINESS EFFECTIVELY?
Definition: The Key Partnerships Building Block describes the network of suppliers and partners that make the business model work. Companies forge partnerships for many reasons, and partnerships are becoming a cornerstone of many business models. An example of this is when companies engage our agency to support them with their Digital Marketing. These businesses are great at delivering the services and products they offer to their customers but need us to get their customers to find them and do business with them.
Considerations: Distinguish between four different types of partnerships and see which players in each type have the strongest impact on the business?
- Strategic alliances between non-competitors Value Chain analysis. Do you need more on logistics and less on shop interior designs?
- Joint ventures to develop new businesses Collaboration Campaigns. Can you tap into your value chain to run collab campaigns online and share audiences to grow it for both of you?
- Buyer-supplier relationships to assure reliable supplies Agency to sustain/amplify. Consider getting in touch with me to discuss if we can help in any way to help you develop your message and get it out there so your customers can find you.
The cost of advertising drops during recessions. The lower rates create a “buyer’s market” for brands. e-g With less advertisers on Google Ads bidding for the terms you want, you can stay there rather inexpensively, have some soft conversions in and have a head start on your competition when things come back to normal.
QUESTION#9: WHAT IS YOUR COST-STRUCTURE? ALL COSTS INCURRED TO OPERATE THE ABOVE BUSINESS MODEL?
Definition: The Cost Structure describes all costs incurred to operate a business model. This building block describes the most important costs incurred while operating under a particular business model. Creating and delivering value, maintaining Customer Relationships, and generating revenue all incur costs. Such costs can be calculated relatively easily after defining Key Resources, Key Activities, and Key Partnerships. Some business models, though, are more cost-driven than others. So-called “no-frills” airlines, for instance, have built business models entirely around low-Cost Structures.
Considerations: You know your costs and cost structures better. Now you know what you need less of and what you need more of to support the other 8 blocks.I can answer on the area that I have specialised in over the past decade i-e Digital Advertising. There are several reasons to continue to advertise during a slowdown.
- The “noise level” in a brand’s product category can drop when competitors cut back on their ad spend. It also allows for advertisers to re-position a brand or introduce a new product.
- Brands can project to consumers the image of corporate stability during challenging times.
- When marketers cut back on their ad spending, the brand loses its “share of mind” with consumers, with the potential of losing current and possibly future sales. An increase in “share of voice” typically leads to an increase in “share of the market.” An increase in market share results, with an increase in profits. (source: Brad Adgate at Forbes)