Why might your competitor be attracting more customers than you? Three words hold the answer: online business strategy.
To prove that point… why are most people today working on a Dell® computer rather than a Compaq? Because Compaq had a “Make to Stock” strategy for economy of scale in production; essentially, they made the same computer over and over again. Meanwhile, Dell went with an “Assemble to Order” strategy for their computers so customers could personalize their computer.
Dell’s decision changed the course of the personal computer industry by pushing Compaq out of the market.
Pop quiz: How can you be the Dell to your competitor’s Compaq??
Answer: Position yourself WITH your customers but against your competitors.
Thinking strategically helps you identify opportunities for differentiation. It helps you identify your core competencies, as well as those needs you are uniquely positioned to solve with those strengths. (If you have not yet read Blue Ocean Strategy, it could be really helpful in jumpstarting your competitive positioning strategy.)
Online business strategy plays other vital roles in your marketing, too. It helps define your business via goals and the optimal action steps to achieve them, as well as balancing short-term outcomes with long-range capabilities.
Every online business needs to use strategy as a tool to differentiate and compete in today’s noisy digital environment. However, entrepreneurs are often caught in the trap of what’s urgently needed today versus taking the time to think and then execute strategically.
This post is designed to help you change that.
What Strategy Looks Like
It can be easy to confuse online business strategy with a plan, marketing or even with project management.
While each of those things can result from strategy, strategy is the total of several factors. Those factors include analyzing your market, knowing your core competencies, identifying opportunities, having a solid business model and visioning the future.
There are many examples of strategy gone wrong to learn from… countless entrepreneurial ventures have simply faded into obscurity.
Even household names have made strategic mistakes. Take Kodak, for example, the company that invented digital photography, which decided filmless photography was “cute – but don’t tell anyone about it”.
Liz Claiborne lost more than $2 billion as a result of the decision to make and sell their branded clothing line through J.C. Penney (See more examples of bad business strategies here: Source).
Ironically, while strategy takes effort, it looks effortless in the end because the results seem so obvious.
Here are a couple of examples to demonstrate how strategy can shift your business to create success.
This first story is about an intelligent professional whose business was failing so miserably that only when he was homeless did his entrepreneurial brain get strategic.
Case Study #1: Hidden Value
Around 1998, a CPA named Thomas Leonard was living out of his car, despite having loyal clients. He decided to interview his clients to understand why they liked working with him so he could revamp his 1:1 services business and become more successful.
Through those interviews, he learned that his clients thought of him as a marriage counselor and a therapist, which he found quite shocking because he was focused solely on reviewing and asking questions about their numbers (their budgets, taxes, etc.).
Based on what he learned, Thomas created a strategy to leverage his abilities to a greater audience by becoming one of the pioneers of the coaching industry. In 2000, Thomas Leonard started Coachville.com, which is still in business today with 34,000+ members in 175+ countries around the world.
Case Study #2: Lateral Thinking
This next story, from Ray Kroc and the McDonald brothers, is even more famous, but not for the reason you might think. The golden arches were not so golden in the beginning…
Ray Kroc was a salesman of multi-spindle milkshake machines. He met the McDonald brothers on one of his sales stops.
The brothers had come up with a highly efficient assembly-line method for cooking and serving up burgers and fries. Their customers enjoyed consistently tasty food, served fast.
Ray saw this as a better business opportunity than milkshake machines and convinced the brothers to let him join the company and try to sell franchises for them. Eventually, Ray bought out the McDonald brothers and continued trying to sell franchises.
It was slow-going financially and Kroc was just about out of cash when Harry Sonneborn – another fast food executive – shared the strategy that would lead to Kroc’s future success. He said:
“You’re not in the hamburger business, you’re in the real estate business.”
Kroc started buying real estate nationwide, which he then leased back to the company for restaurant locations, and the rest is history.
Can you see how, in the absence of strategy OR by not having the right strategy, business success can be elusive? The reality is that, without strategy, business stalls or even dies, putting you out of business.
You Have An Incredible Opportunity, Right Now, To Get Strategic
It’s especially important to think strategically before investing in software and creating funnels and auto-responders and more.
Great online business strategy is about finding ways to add more value to your customers’ experience in meeting their needs or solving their problems – and that may mean pivoting what or how your company operates. There are some fundamental strategies your business needs to have in place.
First, begin by considering what your customers are confronting on a consistent basis. THEIR problems are YOUR opportunities.
Think about new customer needs, research their conversations, see what your solutions create as next-level opportunities, monitor emerging trends… then make a list of the problems, challenges and issues your customers need solved (even if they don’t know it yet).
Next, regardless of your industry or business lifecycle, your business needs to apply what you know (or have learned) toward several fundamental strategies. Following are five key strategies your business should have in place.
- Core Competencies
Your company can likely do a lot of things – but that doesn’t mean it is the best use of your resources to do them. Decide which capabilities are core competencies to enable your focus on strategic solution development, competitive advantage and future expansion (or deepening) of your capabilities.
- Business Model
Your business model is the engine that drives revenue. If your business has the wrong business model (as Leonard did in the example above), you are missing opportunities and revenues.
Strategy amplifies what is already in place so, if your business model is solid, you can compete more effectively. Conversely, if your business model isn’t right, the contrast (and lack of results) will be even more apparent.
- Competitive Positioning
Your business must be able to successfully compete for customers as its lifeblood. This means knowing the value of your solutions and what makes them unique. Even if you sell a similar solution to a competitor, there is something about yours that makes it stand out. You must know what it is to use it in your marketing.
- Go-To-Market Strategy
When your business is ready to launch a new product or service, or step into a new market, or work with a new type of customer, you will need a go-to-market strategy. One way to develop this strategy is to begin with the end goal (e.g., to sell X by X date), then reverse-engineer what it will take to create that outcome.
- Growth Strategy
Business growth can be about customer base, revenues, or even innovation in products and services. Determine in advance the ways you intend your business to grow and how you will position to take advantage of dynamic marketplace trends and emerging opportunities.
This can also help you future-proof your business by always staying relevant with your customers.
By this point, you’re likely thinking, “I see the value of strategy. What do I do once I have the right strategies sorted out for my business?”
Well, here’s some GOOD NEWS…
How To Make Your Strategy Come To Life
Once you have the strategy for your online business in place, you’ll need an operations strategy.
An operations strategy defines the kind of infrastructure — the supporting marketing and eCommerce software tools — you’ll need to make your strategy a reality.
These tools include everything from how your company handles emails and file storage, to the software that powers your sales and marketing funnels, including your CRM, you landing page builders, membership site builders, automated email campaign software, eCommerce systems (product carts, payment systems), content hosting (videos, eBooks, podcasts, etc.), help-desk and live chat for customer service, and affiliate management for expanding your sales reach. (Whew!)
Naturally, we happen to have an all-in-one platform that handles all of that – and more – that you may want to consider. (Just sayin’…)
By combining the power of strategy with Kartra’s ability to execute, you have unparalleled potential for cultivating relationships, generating revenue and, ultimately, growing your business.