Some days, it is challenging to write on topic. For instance, today for this blog, I am on topic number 4. And frankly, number 4 is just wing it. So many things to discuss and I am not quite certain how to frame the issues or put them in context.
We had several meetings last week, not the least of which was the meeting to discuss a private placement strategic plan. That did not go quite as well as I would hope. The concern is valid – I mean, the plan calls for changing how certain software is licensed. It models out but we all know models only go so far. To change direction will cost a ton in marketing dollars and face resistance from the current marketplace who do not want a shift in power.
The shift will happen; it is whether this group wants to be the driver. Actually, that isn’t it, they want to be, but the hard reality is that it takes a lot of resources to upset the current way of doing business. With no guarantee of success.
Not that there is any guarantee of success by following the same model as the other developers in the marketplace. But that channel is well known and understood. The licensors will likely be open to incremental change which means that the cost to land a subscriber will be substantially lower than trying to go directly to the consumer.
Sorry, I know this seems somewhat vague but I am working under an NDA so have to be extremely generic. But the strategic business problem is not unique – it is one faced by every business that decides to sell.
Who is the customer? And how do you improve your odds of success within a sales and distribution channel?
If you are a handyman service one way to go about this would be to get door hangers and go to a mature neighborhood and hang them. If you do up 2,000 you will likely end up with 40 new customers. It won’t happen immediately but that 2% is pretty much cast in stone. You will spend a bit on advertising but it will likely pay off rather quickly.
But, what if you wanted 10% new customers?
One way to attract more customers would be to offer free yard debris removal, for example. People love a free deal and chances are, many more would look at your service offering after having a positive experience with you. You will spend more money than on just advertising alone but, it might pay off. Again, no guarantee that you will substantially increase above the 2% but there is lots of evidence to support the conclusion you will get above 2% new customers. Your costs will most certain go up though.
Freebies, giveaways, basic services with the opportunity to license premium services. These are ways to build trust with your product and service but they are not free to you and oftentimes are quite expensive. Are they still worth doing?
Perhaps. And that is what I am facing this week. Do we redesign the offering to make it compelling to the existing channel? It is going to be expensive either way – either by spending a ton of money on marketing and advertising to go around the existing purchasing channel or on giving away revenues while we work to entice users through free use.
Part of me, of course, loves the idea of challenging the status quo. It would be awesome to completely upset the applecart and win this my way. But, the reality is, it is probably more risky to take that approach than it is to work within the existing channel – even if the existing channel is ripe for challenge.
More on this another day. Have a great Monday. If you are ever in the market for a thinking accountant who loves marketing and sales, feel free to contact me for a free consultation. I am here to be of service to you.