Whether you are planning on selling or transitioning your business or are simply evaluating how you can grow or expand your business now, a focus on customers will help your business determine how to drive value.
There are many value drivers that can be considered and evaluated before you think about selling or transitioning. A potential buyer will analyze all aspects of your business: financial, sales, leadership, marketing, operations, technology and customers among other factors when determining transferable value.
How your business is engaged in marketing, branding and building customer relationships are important value drivers that can increase the attractiveness to a potential buyer.
Understanding that your business value is dependent on customers, their willingness to pay for your product or service and keep paying, is the first step. You may have already built great customer loyalty and brand awareness, but you may not have it documented or measured it in a valuable way.
Working with an exit planner or strategic value builder in advance of a sale (three to five years ideally) will provide a process to evaluate your existing marketing plan and put actions in place to build out the plan and increase your value proposition.
A well-developed, written marketing plan can help you build on what you have and implement strategies to maximize growth opportunities and increase sales. Boosting sales from existing customers, bringing in new customers and standing out with a strong marketing presence will build a stronger more attractive business.
Focus on your customer, find out what they value in your product or service and document it. Customer relationship management (CRM) tools and processes can help capture and analyze client data. Implementing techniques like customer surveys, client follow-up processes and customer reviews provide quantitative and qualitative data on what you do well and what can be improved.
Also, an in-depth view of your client segments, geographical segments, buying trends and client behaviour will help determine where there are opportunities for growth or possible risks. For example, there may be a risk if your customer base is highly reliant on a few customers or if they are all located in a single market. Another potential risk to consider is your sales process and who holds the key relationships with key clients. Is there a process to train and transition the client relationships on an exit of an owner or loss of a key employee? A potential opportunity may be that most of your referrals come for a specific client segment that can be further developed.
Take time to research your competition. When it comes to products, services, marketing, pricing and distribution, ask yourself:
- What do you do better?
- What do they do better?
- What can you improve upon?
- What do you want to be known for?
- What makes you stand out?
Understanding your market and developing your ideal client profile with a clearly defined value proposition will provide the foundation for your marketing strategies. Sales and marketing strategies can be developed to ensure you allocate your efforts in the right places.
When you create more value in your business than your competition, you have a more sustainable future.
If you have any questions or want professional advice on how to build value in your business, connect with us.