Getting into business (Have you a Beach Head Strategy?)
Recently I have either met with or reviewed start up plans for over 40 new enterprises, I was surprised that many, when presenting their plans to enter or develop their initial customer base had very broad criteria for targeting sales. Initial review suggest most of the organisations had a valid proposition, however we know that despite this many still fail (for many different reasons). The primary reason is a lack of focus and precision. Start-up & early stage organisations are generally resource constrained, so every decision to invest time is an opportunity cost decision, i.e. when they make a decision to invest in one thing; it is at the expense of some alternative. This is particularly true when it comes to securing initial customer sales. The key to success is to have a beach-head plan.
In this piece we consider the following:-
· What is a Beach-Head strategy/plan
· Symptoms of the absence of a Beach-Head
· Goals for a Beach-Head
· How to establish a Beach-Head
· Concluding the Beach-Head
· Beyond the Beach Head
· International and virtual Beach-Heads
What is a Beach-Head strategy/plan?
The Beach-Head strategy is a strategy whereby the promoters have identified a clear, defined customer profile/segment that will most likely be the first to purchase the new product or service. It provides a framework for Sales & Marketing focus, customer engagement and the use of scarce resources. It is a term derived from military engagement, when planning an attack where and how will the forces penetrate and expand their capture of territory.
Some Symptoms indicating a lack of focus on a Beach-Head!
· “This technology has applications in sector A, B, C and D”
· “This product solves problems in Financial, Engineering, Life Science etc. “
· “We are marketing the product in Europe, Asia, America & Greenland”
· “We are talking to a client in Boston and in Bangalore”
· “I was in Belfast yesterday talking to a bank and this morning in Cork talking to local Govt.”
I am not saying that some of the above are not applicable in some circumstances, but these statements suggest Market & Customer research and analysis are being done on the fly during the sales process.
Goals for a Beach-Head Strategy
The beach-head strategy is to allow focus so that the organisation and its resources can accelerate market, client & Revenue acquisition progress. There needs to be clear measurable goals and timeframes for the beach head, these may include some or all of the following:-
1. To commercially prove the product or service
2. To refine the product and/or service
3. To prove/refine the business model
4. To secure X reference clients
5. To secure and demonstrate the commercial viability of the venture (Customers are willing to buy the product and/or service-and its profitable)
An approach to establishing a Beach-Head Strategy!
Ideally in the very early stages of a business, a feasibility study has been completed, during this feasibility study quantitative & qualitative information should be acquired, which provide the enterprise promoters with some clues of where and how to sell to their first customers.
Having a clear understanding of the problem your product or service solves for the client, or the opportunity in the form of value for the customer, is the essential starting point.
Define a sweet-spot early customer profile (Most likely to purchase)
To do this some or all of the following questions will need to be answered
· Is it a known and accepted problem/opportunity in their industry/business?
· How easy would it be for us to sell and service to this sector/group?
· Are they located either physically or on line in proximity for us to establish and maintain a relationship?
· Would they do business with an organisation such as ours? (Size, Location, Reputation, Language, Culture, Technology)
· Are there barriers to entry Regulatory, Financial, Political etc.?
· Are they known for being early adopters or laggards?
· Have we previous relationships directly or through a friend/partner?
· Does their buying process, match how we will be selling initially (EG do you have to be on an approved vendor list)?
· Does our product or service have any dependencies from the client’s perspective? (perhaps they must have a specific technology platform, or business model/process, perhaps there are additional purchases required to enable our product or services)
Before we define a sweet-spot customer, we will need to take feasibility information and the answers to some of the questions above and look at it in terms of a market (initial)
It’s useful to have some focused segmentation for the beach head, this will allow focus and refining propositions:-
1. Geography As a general rule for many organisations the Beach Head geography should be the home market (Depending on the country size this may be more refined around a state, region, county or city). Launching a new product or service usually requires face to face confidence and relationship building. It’s likely the promoters may have stronger networks and knowledge of the local home market. The cost of access and travel will be minimised so sales productivity can be optimised. The buyer will perceive less risk of dealing with a local supplier. You will not have to deal with different business cultures.
2. Industry Vertical As a general rule the buyers will value a focus and knowledge of their business, processes and markets and place more value of products or services designed for them specifically. Sizing, targeting and positioning can be specifically refined to draw out your product or service differentiation.
3. Buyer/Customer profiles The characteristics of likely early adopters of a new supplier/product or service can be defined and there can be a focus. For example Tier 2 organisations in chosen sector(s), e.g. Financial Services or Telco’s as examples may be smaller more flexible, more entrepreneurial challengers in their business sector and therefore seeking more innovative products and services to capture market share in their business.
4. Technology/Process The product or service you are promoting may have multiple applications for different business, business processes, and/or different technology environments. Initial minimisation of the variety in a beach head again will reduce overhead and allow for focus on the low hanging fruit.
Concluding a Beach-Head strategy and plan
Having completed the analysis then it is essential to document and communicate the Beach Head strategy; this will allow focus across the business and enhanced productivity and decision making.
· State clearly the target market segments
· State clearly the target client profile
· State clearly the value proposition for the Beach Head
· Start building the CRM database within the Beach Head
· Get talking to these clients
· Identify a small number, you are willing to invest in as Beta clients on the basis they will become a reference site and case study (Generally don’t give anything for free, and have a clear upgrade plan so that these clients are commercially viable in the long term)
Beyond the Beach-Head
Firstly there is usually a lot of learning when executing a beach-head strategy, do not be afraid to adapt as you learn in order that the beach-head can achieve its objectives. It’s also important that everyone understands it could fail, if it shows signs of failing , carry out an objective review , because perhaps it’s not failing but actually confirming a result, e.g. there is not a market for the product or service, or there may be a market but not at a viable price..etc.
Finally and most importantly, you must have a plan to scale as you secure success in the beach head, tactics may differ such as launch another beach-head, form a pincher movement, flood the market, think military how will we conquer our chosen market. (Perhaps the subject of a follow on opinion piece)
International & Virtual Beach-Heads
Though I have largely covered the area I intended, I want to acknowledge here that some products and services may have their potential either on line or Internationally. The key is still to create a focused Beach Head in order that initial goals can be secured. For example in a cloud based market, the service such as a SaaS service can be independent of customer location or vertical etc. However in order to secure initial objectives and focus the organisation, a beach-head strategy is still of very high value. Perhaps for example the on line integrated e-marketing plan will require SEO, partner web sites, social media forums, trade portals etc. , so having a clear plan and focus will enable higher chances of success.