If you want to be able to sell your company in the next five years, you may need to elevate your brand and become the go to company for something specific as we teach in our book “Fast-Track Secrets for Making Your Business Saleable.”
One of the best ways to do that is to turn your products and/or services into repeatable solutions. Think about a solution as something that resolves customer hassles or transforms mysterious processes into one-click answers or transfers the risk of doing business with you from the customer on to your sturdier shoulders.
Here are some examples:
Case Study #1
Are you a service company? Lawyers, accountants, designers, consultants and engineers all sell hours. To increase revenues you have to hire more bodies. That means you take on more costs. The game doesn’t change. So increasing revenues is a risky business. So is staying the same size. Service providers who learn how to “systemize” the services they sell are scalable businesses.
Here is an example. A store front lawyer saw how intimidating applying for a trademark was. He knew what to do, but finding clients who would go through the process with him was always a challenge. He did what most experts don’t like to do. He demystified the process and created an online solution where the customer guides much of the work. They decide what they want to file, if the name is available and how much service they want to buy. Now Trademarkia is a multi-million dollar business.
ACTION TIME: What processes do you sell over and over again? Map the process. Teach your staff how to deliver it. Price it appropriately at different levels of service. Now focus all your marketing efforts on moving that solution to the target market who will value it most. Read John Warrilow’s http://www.builttosell.com, for ideas on how to do this.
Case Study #2
Think the US Postal Service is going the way of the phone book and typewriter? Well they should be commended for finding their entrepreneurial spirit with USPS Every Door Direct program.
It used to be that Direct Mail was for the big companies. There was a lot of work to buy addresses, prepare envelopes, get it to the post office and make sure it got delivered to the right target audience. That is on top of getting the messaging and design right.
Now small business owners can use the service for about 17 cents per piece without having to know the name or address of the recipient. Just select the zip code area of the people you want to target and it gets delivered.
Now this is a superb example of what a company can do to remove customer hassle points.
ACTION TIME: However, it’s not the best example for using our environmental resources wisely. So think outside the box. But then examine how your new solution impacts the environment, your employees, your current customers, your suppliers and your bottom line. And then get responsible about managing that impact.
This is what USPS needs to do next so that the great benefits being offered don’t get overshadowed by the fall out from the waste produced.
Case Study #3
A Manufacturer actually added up the number of regular SKUs and the number of custom SKUs they offered customers. Across 8 product lines they actually produce more than 35,000 parts every week. To say that the operations VP had his hands full orchestrating this dance is an understatement. This business was unsustainable.
If your company suffers from the same complexities, it’s time to change your game plan.
ACTION TIME: Find the top 10 – 20 highest gross margin SKU’s in each product group. Add up the gross margin. Calculate the % of sales. Compare the product groups. Select the groups with the highest gross margin AND highest sales AND the greatest opportunity for market growth AND where material costs are controllable for the next few years AND where you have a competitive advantage for design, customer service, maintenance, geography or other secret sauce, not just price (very important). Now pair away all but the top three product groups.
Now add a design service. What do your customers need to help them stand out in the market, win new work, get better returns? Charge for customization on those SKUs in your three product groups. You’ll be their supplier for life instead of wondering when you’re going to be chopped from the role. And your VP of Ops will be saner.