Three Ways to Disrupt Your Business Model

Technology is no longer the key disruptor:
Your Business Model is—So it “better be good”

David Skok is one of my favorite business writers because he tends to change the way I think about my business. He helps bring new ideas to entrepreneurs like me, who barely have time to do our jobs — let alone keep up with the latest in business model innovation. I know when I visit a Skok blog or SlideShare, I’m not wasting my time.

Take this recent statement from David in a SlideShare titled, “Business Model Innovation: The New Trigger for Great Start Ups”: “Unlike in the past where technology innovation was the primary driver of startup innovation,  in the last ten years it has frequently been innovation in new business models that has caused the disruption to create the opening for new companies.”

The 79+ page Slide Share brought me to some great conclusions about where my company might be headed. David uses awesome examples to show how the “business model as innovator” concept works in practice. Here are some of the most valuable insights:

1. Watch your CAC (cost to acquire a customer) – According to Skok, start-ups using the new model—spending money to get customers to your website and then monetizing the site with offers, etc—doesn’t take into account how much money it will cost to acquire not only a visitor– but a real customer. By monetizing a portion of the customer base and using free software to acquire customers cheaply, startups can keep their CAC more manageable—and make more money.

I learned this lesson the hard way. I loved attending the big, fancy conferences when I first started my company. I thought I would network with the big money clients—then, once they met me, of course they would hire me—voila! That $2,500 conference fee paid for itself.

When I finally broke down the average number of clients I obtained from attending twice a year, every year for three years, I came up with five clients that yielded about the same amount of money as I spent on the conferences. I deicided to cut down attendance to once every two years and spend my new business money on people who were already in my network.

I still go because I love to learn about my discipline. I just don’t spend as much in acquiring customers there. And even though $5,000 a year doesn’t seem like a lot to you, it was a lot of money to me back then. Today, I’d rather spend it on something that yields client contracts on a regular basis.

 2. Keep Track of Buying Behavior – Skok says that outbound marketing annoys your customers and is increasingly not working. Today, buyers use Google search, reviews, free trials, blogs and other content sources to learn about the offerings they need. The key point Skok makes resonates with start-ups in particular—you need “inbound marketing thought processes.”

 I see so much content “thrown at the wall until something sticks” by start-up companies. They “know” they need to be certain places online but they don’t pay thoughtful attention to what they want out there; who needs to be saying it (I love customer testimonials as a buyer and as a business); and where they need to be (to build a social following) basically, how to “educate and entertain.”  Spend a lot of time on this part. It’s worth it.

 3. Be a “New World” Business – The older business model had us charging for everything, even demos. Demos and trials are still widely used. But to move into the “new world” of innovative business models, you have to figure out how to simply give it away. For free. And only monetize a fraction of your customer base to make money.

Granted, your customer base has to be pretty big for most of us to afford the mortgage, the car, and our kids’ tuition with this model. But if you are watching your CAC carefully; writing and posting targeted content in accordance with how your buyers really behave (and not how you wish they would); and figuring out how to give it away while monetizing enough to feed your family and please your investors—Skok says you can get there.

Use the Center for Business Modeling SWOT tool to figure out your strengths, weaknesses, opportunities and threats in these three areas. And then get to work disrupting your market.

SWOT-to-unlock-your-brand

Use SWOT to Unlock Your Why Before Your Customer Will Buy

Run a SWOT to unlock your brand promise and build better customer relationships

When you are planning how to reach out to the marketplace, there are some newer marketing theories that can be the key to building meaningful relationships with your customers. Yes, I said marketing theories. These are the rare theories that can be tested and put into practice immediately. For me, the most impactful of these was shared by Simon Sinek during a Ted Talk. He said: “Your consumers don’t buy what you do –they buy why you do it.”

This amazing quote came to my attention through a really cool blog by Michael Brenner. In it, he offers several insights about how to plan to reach your customers—to deliver your company’s core belief to them rather than just your product or service. He tells us brands are three times more successful when they promote their raison d’etre – and how to personalize your marketing efforts to potentials using your “brand purpose.”

How would I do it? I would use CBM’s SWOT analysis tool to identify my company’s Strengths Weaknesses Opportunities and Threats. After delineating these, I’d look for ways to deliver them to my audiences. Start a conversation. Build a relationship. Let me break it down:

  • Worth it to My Reader My core belief for my communications company is—everyone needs to hear my story (content) because I don’t waste their time with stuff they don’t want to hear. Whether it’s a technological white paper on manufacturing IT or a media pitch for a pair of cool headphones, I have done my research. I know who I am talking to. My strength, then, is making sure my content is targeted and meaty enough for the people I get it in front of- so that it won’t waste their time. That’s the S in my SWOT.
  • Too Cute By Far My weakness is my ability to write fun, fearless copy. Yup—I often refuse to make it dull or clog it up with business speak to please a review board at a client company. In all fairness and in their defense, they are in the serious business of selling their products or services through the content I write. The problem with that is this: Sometimes, their audience expects the material to be cut-and-dry, with dry being the operative word. I learned that not everyone has to be amused while swallowing good, important information. I got myself a good editor at an hourly rate and told her about this issue of mine—we even have a code-edit for when she spots me being too “cute” for certain clients. That tells me to tone down a phrase and make it more business-like for my serious clients. I can usually edit myself with these kinds of clients because I am an excellent writer—and I still don’t bore people because I use juicy verbs and shun the passive voice. Weakness transformed!
  • Opportunity, Don’t Knock It The opportunities in the way I present my core belief—you need this, you should read this, you’ll be happy you did — have given me an edge in certain kinds of content—blogging is one and social media is another. My colorful use of language shows my clients that I can excel in these arenas—even business-to-business blogs and social networks are people-to-people, aren’t they? If I continue to sell my blogging and network posts and broaden my reach to new prospects, I can realize a great jump in profits—people need lots of blogs and tweets/shares these days — they’re among the most in-demand content I write.
  • Why Am I Not Scared? The Threat to my r’aison d’etre? The economic realities that my clients face as small businesses serving medium-to-large companies. Their marketing officers are suffering from “next big thing” fatigue—they are expected to jump on every social media or newest flavor of content bandwagon and then show an ROI on these untested tactics. The threat to my core belief—you need this, you should read this—is that it doesn’t get to the person who’s ready to hear it—or they can’t find it—or the company that hired me to write it doesn’t know where to put it. Or worse—we can’t prove that it worked. This threat is met square on by me—by being up-to-date on cost-effective content strategies and educating my clients on these. By becoming an ROI-KPI detective about these approaches to ensure that they can explain them to their bosses. And by really, truly knowing their customer wants and needs before I put one finger on the keyboard. See, that wasn’t so scary.

You can probably see yourself in some of my strengths, weaknesses, opportunities and threats. Run a SWOT on the why of what you do before you sell your what. It’s key to building a lasting relationship with your customers.

swot analysis

How to do a SWOT Analysis [Infographic]

When to use SWOT analysis?
Why Use SWOT?
How to do a SWOT Analysis?

Introduction to SWOT

What is a SWOT analysis? It is a simple method of planning that compartmentalizes important internal factors (strengths and weaknesses) and external factors (opportunities and threats) that an organization faces. Simply stated, it is a highly effective planning technique to identify actions that will have a positive impact on business strategy and outcome.

The items revealed in your assessment should be looked at as more than just a list of things you hope to accomplish or may eventually find the time to develop. They are actionable results to drive specific business change. Organizations that ignore or fail to understand, evaluate and leverage their strengths, weaknesses, opportunities and threats will find themselves blindsided by trends in the marketplace and their competitors.

See the SWOT Analysis infographic below.

SWOT

Why Use SWOT?

  • To evaluate a new product or business idea.
  • As a tool to help plan marketing, sales or general business strategy.
  • As a method to improve, re-evaluate, revise or correct an existing offering.
  • To identify a new solution to an existing problem.
  • To uncover potential business challenges.
  • To proactively respond to changes and trends.
  • To better understand how you and your competitors are perceived in the marketplace.

When to Use SWOT?

  • As a way to identify and improve on weaknesses, turning them into strengths.
  • To determine areas where opportunities exist and how best to exploit them.
  • As a tool to help expose and neutralize risks and threats.
  • To better understand your business environment and competitive landscape.

Types of SWOT

SWOT is valuable in gaining perspective on one’s position within an environment. It’s a high level examination often performed early in a project, not as a detailed analysis. It’s best used to understand conceptual or strategic needs instead of tactical execution. Here are some typical types of SWOT analysis:

  • Business Team SWOT – A SWOT analysis performed by an executive team, product team or other business group.
  • Product Launch / Re-launch SWOT – SWOT analysis is commonly used in planning and positioning a product or service offering in the marketplace.
  • Business Launch – SWOT analysis helps Entrepreneurs identify opportunities and position their offering in the marketplace. It’s a key step in building a business plan.
  • 3rd Party (external) SWOT Analysis – An outside inspection can often uncover gaps or deficiencies in strategy. SWOT is an effective tool to gain that external perspective.
  • Marketing or Sales SWOT – From branding to differentiation, SWOT helps define messaging and the unique selling proposition (USP).
  • Personal SWOT – This frequent use of SWOT analysis is to perform a self-assessment of one’s skills and career
    SWOT can be applied to products and services, or departments such as sales, marketing, operations, and financial management.

SWOT as a Business Tool: Strengths and Weaknesses

While SWOT is a highly effective, simple means to gain strategic insight and develop business strategy, it’s important to understand the strengths and weaknesses of this approach. This business tool is most easily described as both simple and flexible. However those two strengths can also be liability.

First, the simple, four quadrant layout of SWOT implies that each quadrant has equal importance. Yet this is rarely true in a given SWOT analysis. For example, when looking at business strategy, opportunities and strengths often far outweigh the importance of weaknesses. Reversing this logic, the opposite may be true when looking at a product relaunch.

Second, it’s not always a straightforward task to transform the results of a SWOT analysis into measurable actions. One challenge is narrowing the list of items in each quadrant to a reasonable number of items where the resulting actions can realistically be addressed.

Getting Started with SWOT

How does one do a SWOT analysis? For each of the four quadrants, identify and rank the points that best describe your situation. It’s often best to prioritize and limit the number of items in each quadrant to keep the SWOT analysis manageable.

Strengths – These represent internal factors (tangible or intangible) that are within your control which impact your organization. Following are examples of questions you could ask to determine your strengths.

  • What are one’s internal strengths or areas of excellence?
  • What areas are most profitable to your business?
  • What types of resources are available to you? (i.e., people, technology, reputation, skills, education, etc.)
  • Where does one have a unique advantage or significant head start?
  • What things are exclusive to your organization that add value or give you a competitive edge?

Weaknesses – Are also within your control, but these factors prevent you from successfully maintaining a competitive edge. Look for things you can do that will aid in achieving your business objective. Following are examples of questions that will help determine your weaknesses.

  • What areas leave you most vulnerable?
  • Which areas of your business cost you the most time and money?
  • What things within your control can you improve on?
  • What factors create a competitive disadvantage for you?

Opportunities – Are factors external to your business that when identified will help you understand the market and environment and position you to profit from areas exposed. Following are sample questions to help you determine areas of opportunity.

  • Where can we take advantage of market trends?
  • Are we using our resources effectively? (i.e., technology, people, skills, etc.)
  • Where can we exploit our strengths and the competition’s weaknesses?
  • Do any products or services offer new opportunity for growth?
  • How are we perceived in the marketplace?
  • How is our competition perceived in the marketplace?

Threats – These are factors outside of your control that represent risks to your business and strategy.

  • Which competitors are coming on strong?
  • How will economic issues impact our ability to thrive and expand?
  • Where are market trends working against us?
  • What are the greatest risks presented by competitors, marketplace trends including consumer behavior?

The Right B2B Marketing Strategy for Your Business

There’s no question that the right marketing strategy for your business will depend on your brand, your business capabilities, your solutions, and most importantly, your market. But knowing the distinct trends can and should influence your marketing priorities.

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Additional SWOT Resources