Transcending the Transactional Relationship with Customers

Today we explore how your business might become “Mission-Led” and transcend the day-to-day transactional nature of most businesses.

Having a wider mission or cause can help focus your business on something bigger than itself. We discuss books such as Spiritual Capital, Firms of Endearment and good examples of successful businesses such as Toms Shoes that are mission-led.

Your mission or Big Why could be to improve your village, town, city, country or the World. No mission or cause is too small or too big. Just so long as it transcends your day-to-day business.

Let me know your thoughts on how you are applying these principles to evolve your business?

 

Know Your Strategy

There are two opposing views:

“Strategy is the rare and precious skill of staying one step ahead of the need to be efficient”

– Dr Jules Goddard – Uncommon Sense, Common Nonsense

Or

“Your margin is my opportunity

Jeff Bezos -Founder,  Amazon

Neither perspective on strategy is right or wrong – today we discuss the importance of understanding which end of these extremes your business is positioned?

 

Amazon Killer? Time to look at subscription models…?

Today’s ramblings are about a new rival to Amazon – Jet.com.

Jet is already being courted by Walmart as it looks to beef up its online distribution model. With 12m lines already, Jet is looking to attack Amazon’s seeming dominance of the online market by offering household goods at cost price. Customers are rewarded with further reductions for buying in bulk.

So how does Jet make its money?

Via a yearly subscription of course – $50 per year. Not a lot in of itself but potentially huge if it gains mass take up. Whatsapp showed us the power of subscription models with its $1 dollar annual fee (pre Facebook days) – not wholly exciting until it reached 200m+ users and therefore a tidy $200m per year. Also, more recently, Dollar Shave Club?

I am a huge fan of subscription models. Think monthly Saas subscription business models; membership plans, continuity programs etc. A recurring income flow. Predictable revenues with no receivables to chase. Highly attractive to prospective purchasers if you are looking to build a company to exit.

Have a think how you can add the subscription model into your business, if you haven’t already….?

 

10 Squared Principle – Business Success Model

The 10 squared principle seeks to identify specific traits that appear to apply to successful businesses.

1) Richard Branson Factor

You should never be part of the operational team – ever! (Even if a train driver is off ill, you never see Richard B step in to take over!). The same principle applies here – you are the business owner.

Work on it, not in it.

2) A recurring income stream

Have one or more recurring revenue streams built into the business model. One-off sales should not form a core of your business. Aim for 50%+ of the income to be of a contractual recurring nature.

3) The service / product offering should be well established or known

Trying to educate the marketplace on a new product or service can be very expensive. Stick to what is already known and well established.

Just execute better.

4) The business model should be high-touch

If the business model could be outsourced to offshore centres, it should be avoided.

5) If it “puffs your chest” then it should be a “no”

Vanity projects are normally expensive and destined for failure.

6) It should not rely on government policy or specific laws

These can change in an instant. You want a business for the long-term.

7) No long sales cycles

High value B2B sales can drain your cashflow as deals can take an age to complete. Smaller, cash intensive services / products via regular transactions are better.

8) Minimal specialist expertise needed

Trainable to staff (locally) so no need to suffer from limited resource pool and specialist (spiraling) wages.

9) Doesn’t have to be your startup

It could be the acquisition of an existing business that just needs to execute better (just so long as they adhere to these principles and the price is right!)

10) Make appreciable improvements day-in-day-out

The small things count if applied and compounded day after day.

Please let me know if you think I’ve missed any hidden success factors…