Applying the Blue Ocean Strategy to the Business Model Canvas

To apply the Blue Ocean Strategy, you start with a Business Model Canvas that describes your industry and then look at your the business model canvas from three different perspectives: the cost prospective, value proposition, and the customer segment.

From the cost prospective, identify the highest cost infrastructure elements and see what would happen to the model if you eliminated or reduced them. Then consider the infrastructure investments you could make or improve upon and see what would happen to the model. When Blue Ocean Strategyit comes to looking at your model from the cost prospective, ask yourself the following questions:

– What activities, resources, and partnerships have the highest cost?
– What happens if you reduce or eliminate some of these cost factors?
– How could you replace useless or costly elements by reducing expensive resources, activities, or partnerships?
– What value would be created by planning new investments?
– How will changes made from a cost prospective affect your value proposition and customer side of the model?

Next, look at your business model from the value proposition prospective and see what new value you can create or increase. Then see what value you can eliminate or reduce. When it comes to looking at your model from a value proposition prospective, ask yourself the following questions:

– What less valuable features or services could be eliminated or reduced?
– What features or services could be enhanced or created to produce a valuable new customer experience?
– What are the cost implications of your changes to your value proposition?
– How will changes to the value proposition affect the customer side of the model?

Finally, look at your business model from the customer prospective and see what new customer segments you could focus on. Then see what customer segments you can eliminate or reduce. When it comes to looking at your model from the customer prospective, ask yourself the following questions:

– Which new customer segments could you focus on and which segments could you possibly reduce or eliminate?
– What jobs do new customer segments really want to have done?
– How do the customers prefer to be reached and what kind of relationship do they expect?
– What are the cost implications of serving new customer segments?
– What effects does adding or eliminating customer segments have on your value proposition?

How would you start to apply the blue ocean strategy to your business?

Note: this article was originally posted November 11, 2015 at


Process Optimization

The Importance of Processes in Effective Lead-to-Revenue

Process OptimizationComponent 3 in our recent eBook The Essential Guide to Building Your Lead-to-Revenue Machine is optimized marketing and sales processes. You can read lots of articles and white papers about the various technology options – CRM, marketing automation, sales enablement etc., but in my experience, unless you get the processes right,  even the best people and technology will just help you fail faster and more expensively.

This is why we always recommend that our clients start with processes as the first component of a well-oiled, end-to-end marketing and sales infrastructure – and only then make sure they have the appropriate technology and people to run the lead-to-revenue (L2R) machine.

Here are some important keys to creating and optimizing your marketing and sales processes:

  1. Concentrate your efforts on finding the companies and individuals that have a genuine need for what you offer. This a much easier and less stressful way of doing things—for both you and your prospects? Response rates will be higher, close rates will be higher, and you will not have to manipulate anyone.
  2. Keep things simple and focused on as few priorities as possible. A good way to kill the productivity of a sales force is to throw too much at them. Too many products, too many offers, and too many messages equate to too many chances for the sales team to lose sales.
  3. Treat sales leads with care and respect. It really offends me when sales departments mishandle the leads/inquiries given to them by the marketing department. I have seen sales reps ignore leads, denigrate leads, and follow them up in a half-hearted manner. Often this occurs because the VP of Sales speaks poorly about what marketing is doing, creating a culture where reps feel it is okay not to work the leads they are given. Leads cost money, and few of us have extra money to waste. If the lead quality is not where it needs to be, please review my post about creating a service level agreement (SLA) between marketing and sales.
  4. Build effective sales lead management into the process. One of the best ways to follow the advice from the previous point is to carefully qualify the inbound inquiries and then create an ongoing drip-marketing program to nurture these leads until they are ready to engage in the buying process. Quality sales lead management can boost sales performance by 100 percent or more.
  5. Allow for a highly flexible sales process. While “flexible process” may sound like an oxymoron, sales is both an art and a science. If you over-engineer the process, you can end up with a group of sales reps that will do anything you tell them, except the most important thing — close business. Sales is a game of technique, but also one of instinct and intuition. Thinking and acting outside the box is okay as long as it falls within reasonable limits.
  6. Create a culture of accountability and support. Many sales managers are good at telling their people what to do, but not so good at supporting them. However, the more you try to direct someone’s actions, the more the ownership is retained by you, instead of by the rep, where it belongs. The sales rep’s job is to produce his or her revenue targets. Your job is not to tell your staff how to make their numbers; it is to support them in every way in achieving their goals.
  7. Remain consistent. One of my clients had great technology, but also had a very bad habit of changing their product offerings and value proposition every six months or so. The sales team was encouraged to spend their time on the newest offerings instead of what had worked for them in the past. This required extensive retraining of the team, and they never found their rhythm. In a tough selling world, consistency can be the attribute that keeps your team on top.

Get your processes right to boost your lead-to-revenue success.

Key SaaS Metrics for Accelerating Growth

Busiess MetricsExecutives love metrics, especially in the technology/Internet space. Metrics equal transparency and proactive improvement across key business metrics. Companies that set the bar operationally grow more effectively, and that means better shareholder value.

A few critical KPIs are key to measuring the health of the business, setting goals and identifying reprioritization efforts that can address potential issues before they surface. At the C-level, every executive, especially the CEO, continually evaluates how the business is doing on key fronts like sales, customer success, product, etc. With the rise of a more complex buyer’s journey, marketing has a huge impact on growth. Understanding the variables that indicate marketing success is what we will dive into below.

This overview and the examples are meant to give you a baseline understanding of creating a predictable marketing-centric model that helps justify further investment and testing of program-mix spend.

First, evaluate your strategy and your go-to-market model. There are three main variables to consider as inputs for optimizing productive growth:

  1. Average deal size: Annual Recurring Revenue (ARR): Are you living in a fast-moving, low-price, world? $2k ARR deals closing in weeks, not months? Or are you selling $250k ARR deals that take 18 months to close? Maybe you have businesses across multiple types of models. Are your new customers coming from freemium products? Trials? Demos?
  2. Sales cycle (number of days from lead to opportunity to close): Once the sales team accepts a qualified opportunity, they have the hot potato! What’s the Service Level Agreement (SLA) that comes with that company asset? Should the sales person use three or four calls and 30 days to close the deal? How are those efforts tracked, reported and planned for in your metrics and their compensation plans?
  3. Velocity (number of deals/rep/month): How simple or complex is it to sell your products? How many deals can your sales reps manage and close, in parallel?

Having a common understanding of what these mean is critical for your organization. Then you need to summarize and adjust your investment mix each quarter by leveraging solid data that you and your CEO trust.

What generates a fast-moving new pipeline?

In most cases, inbound marketing is the fastest way to generate a new pipeline. Inbound marketing is comprised of two channels:

  1. Organic search: Keyword phrases plus a highly optimized, dedicated landing page (under your URL) with content tuned to that exact search phrase. Every organic search campaign should have a dedicated landing page with a call to action (CTA) that converts the anonymous visitor to a known lead via the form-fill associated with getting the CTA offer.
  2. Paid channels (paid search/PPC, advertising and social): Google AdWords, Bing, Yahoo, LinkedIn, retargeting, Twitter, Facebook, etc.

Use common definitions, attribution (I recommend multi-touch) and math to report results across your channels. Here is a useful top-of-funnel (demand generation) reporting template that will clarify which investments are the most valuable.

Captora image 1

Here’s an example of a quarterly marketing report outlining pipeline growth and productivity results to track results and to share with your executive peers.

Captora image 2

This will show the team how you are doing at a high level and will enable you to adjust the marketing plan.

Accelerate revenue growth with content

You don’t need a ton of content to accelerate revenue growth. But, over time, the company with the best content wins because content cuts through all the digital channels’ clutter and noise. Be a thought leader and see where your content stands versus your marketing campaigns and those of your competitors. Why does this matter?

  • Great content engages new (previously anonymous) buyers early in their search to buy the right products.
  • Great content used correctly (marketed to the right personas at the right stage of interest) increases your conversion rates (which improves your cost of acquiring new customers – customer acquisition cost (CAC).
  • Acquisition inefficiency starts at the top of your funnel. Knowing what keywords engage new buyers and what promotions work best means you beat your competition and engage new buyers so they prefer your solution versus your competition. That means faster/higher conversion rates, and you get more value from your nurturing tracks and CRM systems.

The key is your numerator. We all need to convert more previously anonymous people into new, high-quality leads. How does that happen? From engaging new buyers early in their process of looking for your products (non-branded search, advertising and social campaigns coupled with your outbound marketing programs).

Captora image 3

I prefer using the “Magic Number.” Magic Number = (Increase in quarterly recurring revenue4 )/ (prior quarter′ s sales and marketing expenses)

Your magic number should be >1.25 to pour fuel on the fire. If it’s below one, you have a problem to fix; either your average deal size and sales cycle are too inefficient for your sales and marketing model, or your marketing spend mix is way off. Either way, understand the root cause of the issue and fix it before trying to accelerate your revenue growth.

Monthly opportunity reporting

I saved the best for last. Below is my favorite report (simple but brutal) – a monthly opportunity report that is critical for your ability to predict the revenue impact from marketing’s pipeline contribution. The best forecast of future revenue is tracking opportunities that will turn into closed business.

If your opportunity-to-close percentage is 50 percent and your opportunity-to-close time averages 30 days, you can predict September revenue by adding up your total opportunities at the end of August, dividing by two and multiplying them by your average deal size.

Captora image 4

Since you know how many opportunities need to be created from marketing-generated leads, you can also improve your ability to forecast future opportunities based on math and past conversion rates. Over time, your marketing model will be so seamless that your ability to forecast future quarters’ revenues will be better than that of sales leaders … and that will create a trust to invest more in your business.

From the CFO and CEO view, operating expense increases are limitless as long as they trust it turns into faster revenue growth in a predictable way. Review your existing marketing model, generate and utilize reporting tools that track the value of your content and succeed in effectively tracking your marketing efforts and generating new business. You can do it!

Originally posted on