Part 4 of 4: Do You Have The Right Business Model To Grow?
Part 4: Do You Have The Right Business Model To Grow?
By Kelly Lawrence
In the current market, 85% of companies are in decline.[1] Four of the common reasons companies - and their new products - fail can be attributed to a lack of marketing science.[2] In this four part series, we examine each and provide indicators to help you identify areas that your organization needs to improve in order to accelerate growth.
4 Root Causes of Business & New Product Failures[3]
Part 1: Not in touch with customers through deep dialogue
Part 2: Lack of unique value proposition / differentiation
Part 3: Failure to communicate value proposition
Part 4: Inability to nail a profitable business model with proven revenue streams
5 Indicators It’s Time To Update Your Business Model
Simply put, a business model is how you are going to make money.[4] It should answer the questions:
Who will we sell to?
What will we sell them?
Why will they buy it?
Where will they buy it?
How will we make money?
If you’ve been reading the other parts to this series, these questions should look very familiar. All three elements are critical to achieve a sustainable business model. Here are 5 indicators your business model may be due for an update.
Your organization is not crystal clear on the answers to the 5 questions above. If your team is not aligned in the answers to the questions above, how can they be working together toward a common end goal?
Not engaged with customers through deep dialogue. People and customers have problems. They naturally go to those who can help them solve those problems. If you are not engaged with your customers through deep dialogue, you can bet that someone else is engaged with your customers and solving their problems. Not corrected, this cycle threatens the long term sustainability of your business. Learn more.
A lack of value proposition. Just like the products you sell have to be differentiated, so does your overall business. There must be a reason customers want to do business with you versus the next best alternative. Learn more.
Not communicating value proposition. If you don’t tell customers how you can help them, why should they buy from you? Learn more.
Top line revenues, volume and profits are declining. Businesses grow by selling more stuff, finding more customers or changing their product mix to sell higher value stuff. If you are seeing declines in your gross sales, volume and profit, you’re not growing and need to figure out why.
If your business is struggling with the challenges above, contact us to learn how to pivot and get the right business model in place for your business to grow.
About Kelly Lawrence
Kelly Lawrence is the Founder and CEO of Lawrence Innovation. Kelly helps B2B innovators accelerate growth by converting market insights into practical action plans that deliver results. Kelly brings the strategy, tactics and passion to deliver significant results. Kelly also offers affiliate services through Smithers and The AIM Institute.
About Lawrence Innovation
At Lawrence Innovation, our clients learn new business development strategies and tactics: how to stay in touch with customers through deep dialogue, develop the right offers, develop and communicate unique value propositions, establish an effective front-end-of-innovation process and nail a profitable business model with proven revenue streams. Typical client outcomes include increased revenue, improved profitability and higher project hit rates.
Sources
[1]2020. The Board of Innovation. https://www.boardofinnovation.com/low-touch-economy/. “The Low Touch Economy Is Here To Stay.”
[2] 2020. Lawrence Innovation. https://www.lawrenceinnovation.com/blog/7ximwm62xwcxyd87jv7xsour7lmkzv. “85% of Companies Are In Decline & Need To Find New Growth. Are You One of Them?”
[3] Eric T. Wagner. “Five Reasons 8 Out of 10 Businesses Fail.” Forbes, 2013.
[4] https://hbr.org/2015/01/what-is-a-business-model