We reflect at this time and are honored to have you follow our blog. We strive to excel in our industry and are thankful for your interest in Revenue Science™. Every now and then we look back at our articles and see some that we consider CLASSICS. They were relevant then and are relevant now. This is one of them.
What is the essence of a strategy?
- Product centered?
- Based on investment leverage?
- People centered with the right people on the bus?
- Innovation centered?
- Market domination?
- An important WHY or Worthy Intention?
- Understanding your customer and building a relationship?
- Or is it something else?
Once a strategy is crafted, selected or developed, the question that will shortly come up is:
How do we monetize this strategy?
Then everyone goes to work to decide what they can take to the market that buyers will buy from us instead of from our competitors (for a massive profit). There is a focus on price, infrastructure, brand, Go-to-Market options, direct or indirect channels, the target market and how much will we sell.
Finally, after we have spent days in a conference room, we walk out into the light of the world to implement our strategy.
If we start with a great product in a hot market or buy a few profitable companies already in the market or tell a great story about our Worthy Intention or start with a great customer because of a historic relationship, we do pretty well or at least well enough to hang around for a time.
While we are hanging around, we notice some things:
- Our product is still very cool but not as cool as some newer ones – that are also cheaper.
- We bought two profitable companies that we now know don’t like each other, and they were in a bubble brought on by great demand for a scarce product. Now the demand has slowed, and new entrants have flooded the market with low cost “good enough” products.
- The cost of innovation is higher than expected. The time to take innovation to market is long, and Go-to-Market is not easy. Developing a Go-to-Market program that creates a profitable outcome in a short time is a skill we haven’t fully developed.
- Having a Worthy Intention gets a lot of attention, and we get to demonstrate our commitment to that Worthy Intention (a costly thing to demonstrate) over and over before it results in profitable business pouring in (we hope).
- We really know our prospective customers well and have great social relationships with them. Now we are waiting for them to buy something above our cost.
This approach to business is backward. Declaring that tactics, technology, and investments are strategic does not make them so. Even when they are combined, called new or different or a more strategic strategy does not make them so. They are still just tools, tactics, best practices, technology or investment and nothing more.
Only one thing will statistically assure a company survives and thrives. That one thing is to continually produce more profitable revenue (year after year). The message is clear, the winning strategy is a Revenue Strategy. The Revenue Strategy can be supported and deployed using any combination of those 8 options along with many others and changed often based on the market.
The Revenue Strategy is about solving “Buyer’s” problems. The problems must be high value and compelling from the “Buyer’s” frame of reference! There may be products or services, or an acquisition, innovation may help, and it is hard to understand the customer’s problem if you don’t have a relationship.
The strategy bottom line is about solving “Buyer’s” problems that are high value and compelling from the “Buyer’s” frame of reference! When the problem you solve for the buyer is high value, your compensation will be also. This is where your Revenue Strategy starts, and everything else is deployment and execution.
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