Sales, Revenues and Profits are ultimate outcomes. The key for any Business Success hinges on knowing little important details about the means to achieve these outcomes for their Businesses. Means and Possibilities are constantly changing. The question is whether we are keeping pace with that change.
I just finished reading this fabulous piece of advice for venture capitalists from Steve Blank.
Absolutely bang on and a must read for every leader responsible for building a business!
The most sustainable, scalable and profitable businesses in history have been created by those founders and ceos who have endured and succeeded in ruthless scenarios. They had to consistently sell and deliver value for their customers through persistent innovation fully knowing that when the salary cycle comes every month, they can only look to a mirror for supporting and retaining people who keep their business going. A literally non bailable scenario week after week, months after months, years after years:). It would be great for the economy when more of these genres decide to become Venture Capitalists, Mentors and Angels. Thankfully, this trend has been progressively catching up in India recently.
It is important for people at the leadership level to equip themselves to know intricacies of operating a businesses in times when Digital is a key influencer.
This is applicable for Business Leaders in any sector whether we are funding companies or building a business or hiring talents or evaluating and using services, tools or solutions being offered to us. A Business in Digital Era is not (just) about sales, leads, enquiries, traffic, app downloads, online transactions or revenues. Its actually about knowing the hows, whats, whys, whos and whens of achieving these key performance drivers.
Picture how important these business impacting scenarios are for Business Leaders.
How much of your organic traffic comes from ‘non branded’ searches (where your brand name is not used in search)? This is perhaps the most important sign of sustainable and scalable growth for your business or your portfolio business.
Are you paying for Ads using your own brand name as a keyword when people will anyway find your website organically on search engines? How long should you be doing this?
What are your domain name and brand usage policies for agents, partners and aggregators who need your brand name to create demand for you? Third Party use of a brand name nowadays means traffic to some other website or digital property. For whom should you be giving these privileges to?
With growing competition and drying investments, some online businesses resort to winning customers with ‘Lead’ based packages and are burning to achieve their cost per lead commitments by running advertisements for their customers on social networks, search engines and other publisher networks. Reality is that Businesses are anyway doing these themselves or with their agency to create traffic and leads for their own Digital assets. If some customers are still paying for these gimmicks, its just going to be a temporary ignorance of these paying customers who are yet to understand that their brand’s marketing budget is being wasted and diverted for building qualified opt-ins and traffic to some other portal/app in pretext of generating leads for them.
What this actually means is that many online businesses who are in the business of creating an ecosystem in India still do not have ‘active/enaged optins’ even after having access to huge rounds of funding to prove business traction. Thinking that customers are fools and showing ‘scale’ with such tactics are neither viable nor sustainable. If you are an ecosystem, you should be focussing your energies on creating a responsible and vibrant ecosystem with the plentiful access to funds your business has (had?).
Linking part of the value you provide, to the leads generated or conversions facilitated is a good thing , but if your business model has succumbed to mainly hinge on leads or enquiries generated as the only percieved value, you are actually in very big trouble.
Smart Businesses put their marketing monies to achieve three consistent business drivers:
A) When someone gets a sale for a Business. They include agents, partners, re-sellers and marketplaces.
B) When someone helps Businesses build relevant Brand visibility (generating traffic to their own digital property like their own website or app, traction to their inbound number or walkins to their Business Location) from advertisement on a vibrant consumer information source, ecosystem, medium or hub).
C) When someone empowers a Business to build better relationships with their customers and prospects when a Business is capable of doing so.
It might make some sense to reflect back on where an online business features in this value chain and what is going wrong with an Online Business if a), b) or c) does not hold good for them.
Some Online Publications and Content Portals resort to generating traffic and revenues by publishing articles on “best”, “top”, “promising” thingies which are actually advertisements (without saying so). While some others ask customers to pay for a recognition or an award in some form or the other. These are irresponsible and shows intellectually bankruptcy. Consumers are informed audiences and people who take their reputation seriously will not pay for recognition. Stop, Rewind and Get back to Basics. Immediately please.
Did you know that you can create another tool overnight by putting a few dollars on buying a inspired product codes or with a search on the term “clone”? But still Angels are largely enamored by wannabe entrepreneurs with a so called MVP instead of nurturing entrepreneurs who have traits of perseverance for their vision and journey. Think about this before someone in their nappies comes to you with a cool cutting edge ‘platform’ or ‘app’. Is this valuable? Are there other options? Look up for something similar done in a different geography. Most app/tool businesses are anyway geography agnostic, they will grow their sales or partner network on a new geography sooner than later. Put your monies on somebody, not some thing.
Did you know you can get aimless traffic and fans by paying 5 dollars on a gig marketplaces? There are now bots to chat with you…follow you…like what you do…make you feel good. When was the last time you accessed an analytics tool deployed at your company or your portfolio company?
Sales is an outcome. Unless you are aware and knowledgeable about the changing means to achieve it, you are chasing a wild goose. The devil is in the detail and when you are aware of how to take it head on, you create possibilities which others cannot. Stay invested on the means to achieve your business priorities and not just the outcomes.