A big part of business is strategy. A business can live or die from the strategic planning it conducts. People often talk about strategy as if it’s an incredibly difficult and intricate process. Now don’t get me wrong, a good strategy should be detailed and attempt to cover multiple eventualities, but creating one is a lot easier than you might think. To help you understand just how easy it can be, read this method for how to create an entire strategy based off one simple metric.
OK, so strategy has a lot of different meanings to different people. It can be used to manage the outcome of a specific project, or govern the entire business model of an organisation. And, I’ll admit, it can be daunting when thinking about how you are going to create a strategy for your business.
There are many factors and pieces of information you need to consider to create an effective strategy. You need to have good knowledge of the area you are creating a strategy for. If you are creating one for your entire business, then knowing the market you operate in, your target audience, your competitors, any relevant regulations, will all be required.
You’ve been learning about these areas ever since you decided to set up your business. So, with a little strategic thinking, you can use the information you already know to create the basis of your business strategy. Maybe you need to fill in a gap or two, but that’s not a big deal. To understand more, here is an article outlining 7 principles of creating a great strategy for your business.
The key metric
What’s the aim of most businesses? To make some money! Perhaps we didn’t get into business for the money, but let’s be honest, this is the bottom line of most business models.
However, knowing the amount of money you want to make, although a good start, is not the metric you are looking for. You need to take a couple steps back and figure out how you are going to get to a stage where you are making the profit you are looking for.
You probably have a figure in mind that you would be satisfied with – anything above this a bonus. It will provide you with a comfortable living, allowing you to achieve both your personal and business goals.
You should also know how many sales you need to reach that number. If you don’t, then you need to start with some basic profit projections, factoring in all of your overheads. Here is a good article to help you understand how to predict your profit.
You then need to consider how to find those customers to help you turn that profit. Consider more than just how to maximise your business’s exposure and obtain leads, but how to convert them into paying customers.
Once you identify the number of paying customers you need, and the value they must provide, consider how you are going to get the sales leads in the first place. There are many ways to generate leads, from a contact form on your website to holding physical events that prospects can attend. Here is an extensive list of different lead generation methods that you can adopt. Whatever methods you choose, you will need to generate a certain amount of engagement before you generate the leads.
No matter what type of promotions you create, you will always have a drop off rate when converting an interested party into a lead. Say you have 1000 people visit your website, realistically, only a small percentage of these are going to take some form of further action. Perhaps you send out an email to a 3rd party’s database, only some of the people will act on your email. This is where the difference lies between an engaged or interested party and an actual lead.
From working backwards from your end goal, you can identify the number of people you need to get in front of to reach your business goal. This is what is referred to as the ‘top of the funnel’. By figuring out this metric, you can base the rest of your strategy around how you are going to hit that number.
Once you figure out the one key metric that will make or break your strategy then you can work on how to deliver on that metric. Then, step by step, how you can hit the next metric down the funnel to ensure you are delivering on your bottom line – the sales. By working backwards from the bottom line, we have already started to create the outline of the strategy.
By figuring out this top of the funnel metric, you can then start filling in the blanks for the rest of your strategy. It may take some time and research but you have an idea on the goals you need to achieve to deliver on your ultimate bottom line, your profit!
This simple method for creating a strategy will help you to easily understand the results you need to achieve at the different stages of marketing and sales, and to ensure success for your business. Now you can put on your problem solving hat, and figure out how you are going to get those results.
marketpreneurs can help you to figure out and implement a great strategy to ensure you are hitting that bottom line. Our innovative business support model gives you access to the knowledge and skills necessary to succeed. Book a free no obligation consultation with us today.