Who Are Your Buyers and Who Feeds Them
Who Are Your Buyers and Who Feeds Them
Describe your buyer
Whoever it is, describe the buyer's recognition of the problem you solve, the criteria that will be used to determine the purchase, the likely availability of resources to support the purchase, and the decision process that you will be confronted with. Take time to understand the real economics that the buyer is facing, which will determine how they evaluate a purchase decision. This will later become the foundation of your value proposition. Describe how the buyer is reached. Who do they buy from: for example, direct sales people, distributors, value added resellers, stores, product integrators, OEM suppliers? Add these distribution channels to your landscape picture and describe who they are and how they operate. Depict their business drivers and who feeds them as well. This will give you a complete food chain view from the manufacturer to the user of the product or service. Understanding how this food chain works gives you background necessary to establish your channel strategy.
Who are you up against?
Don't be fooled, there is always a competitor to worry about. A competitor could be simply another company offering a similar product or service. A competitor is also a company that offers a different approach to solving the problem or solves the problem in the context of others. Either way, you have to know who the major competitors are and how you compare. Add to your industry landscape picture, each relevant competitor, categorized by their approaches to the market. As in Sun-tzu's book, The Art of War, you have to know your enemy. For each major competitor, describe their product line and how you compare, feature by feature. Add to the description an analysis that includes their distribution strategy, value proposition, financial condition, recent successes, distinctive executives, partnerships, and funding sources. All this adds to your landscape picture the information needed to determine what you are up against, so you can then define a winning strategy.
Where's the money?
Special attention should be paid to the sources of money in your landscape picture. Insert into your picture the major investors who are in your market segment. They fund your competitors, but it's important to also understand the mindset of the firms that are investing, and how they are performing. Describe the key stakeholders in your market, their investment strategy, expectations and performance. This understanding gives evidence that there is interest in solving the problem you are solving. It also helps you identify potential investors in your company.
How do you win?
With the landscape fully depicted, you now have to explain how you are going to win. That is, how are you going to convince the buyers that you have the best solution, get them to use your product or service, get money for it, and do this repetitively so that your company quickly becomes cash flow positive and profitable? At this point, you simply have to describe your strategy, and not all the nuances of your product or service. Explain what is better about your solution. Your secret sauce has to be clear and convincing. It could be a new innovation, a technology with differentiating features, a lower cost structure, a price advantage, a new distribution approach, a new form of integration, or expert service and support. Keep this description in the context of the problem you are solving and address all the relevant aspects of the landscape that affect the purchase decision for your product or service. You will be showing how you will overcome all the barriers to success and how you will be differentiated from all the other competitors. This explanation cannot be obtuse. It has to be clear, direct, convincing, compelling, sensible and realistic. If you cannot convince yourself, and later others, that you can win, you should not embark on the business. If you are convinced, go for it with incredible energy and excellence.
With a complete understanding of your business, you can confidently approach any customer, potential partner or investor knowing that you have a well thought out business proposition. Your chances of getting help are improved and your likelihood of success is much greater.
Who Are Your Buyers and Who Feeds Them - To learn more about this author, visit Bill Warner's Website.
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Once you have the overall industry landscape figured out, the next step is to go deeper and describe who the buyers, suppliers and distributors are, and what drives them. This is the food chain that some researchers refer to. Start with the buyer; your customer. Within a company, who is the buyer? Is it a CIO? Is it a VP of service? Is it the purchasing manager? Is it the buyer for a retail store? Is it the VP of development?
Describe your buyer
Whoever it is, describe the buyer's recognition of the problem you solve, the criteria that will be used to determine the purchase, the likely availability of resources to support the purchase, and the decision process that you will be confronted with. Take time to understand the real economics that the buyer is facing, which will determine how they evaluate a purchase decision. This will later become the foundation of your value proposition. Describe how the buyer is reached. Who do they buy from: for example, direct sales people, distributors, value added resellers, stores, product integrators, OEM suppliers? Add these distribution channels to your landscape picture and describe who they are and how they operate. Depict their business drivers and who feeds them as well. This will give you a complete food chain view from the manufacturer to the user of the product or service. Understanding how this food chain works gives you background necessary to establish your channel strategy.
Who are you up against?
Don't be fooled, there is always a competitor to worry about. A competitor could be simply another company offering a similar product or service. A competitor is also a company that offers a different approach to solving the problem or solves the problem in the context of others. Either way, you have to know who the major competitors are and how you compare. Add to your industry landscape picture, each relevant competitor, categorized by their approaches to the market. As in Sun-tzu's book, The Art of War, you have to know your enemy. For each major competitor, describe their product line and how you compare, feature by feature. Add to the description an analysis that includes their distribution strategy, value proposition, financial condition, recent successes, distinctive executives, partnerships, and funding sources. All this adds to your landscape picture the information needed to determine what you are up against, so you can then define a winning strategy.
Where's the money?
Special attention should be paid to the sources of money in your landscape picture. Insert into your picture the major investors who are in your market segment. They fund your competitors, but it's important to also understand the mindset of the firms that are investing, and how they are performing. Describe the key stakeholders in your market, their investment strategy, expectations and performance. This understanding gives evidence that there is interest in solving the problem you are solving. It also helps you identify potential investors in your company.
How do you win?
With the landscape fully depicted, you now have to explain how you are going to win. That is, how are you going to convince the buyers that you have the best solution, get them to use your product or service, get money for it, and do this repetitively so that your company quickly becomes cash flow positive and profitable? At this point, you simply have to describe your strategy, and not all the nuances of your product or service. Explain what is better about your solution. Your secret sauce has to be clear and convincing. It could be a new innovation, a technology with differentiating features, a lower cost structure, a price advantage, a new distribution approach, a new form of integration, or expert service and support. Keep this description in the context of the problem you are solving and address all the relevant aspects of the landscape that affect the purchase decision for your product or service. You will be showing how you will overcome all the barriers to success and how you will be differentiated from all the other competitors. This explanation cannot be obtuse. It has to be clear, direct, convincing, compelling, sensible and realistic. If you cannot convince yourself, and later others, that you can win, you should not embark on the business. If you are convinced, go for it with incredible energy and excellence.
With a complete understanding of your business, you can confidently approach any customer, potential partner or investor knowing that you have a well thought out business proposition. Your chances of getting help are improved and your likelihood of success is much greater.
Who Are Your Buyers and Who Feeds Them - To learn more about this author, visit Bill Warner's Website.
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