When you create your Revenue Roadmap you’ll need to look at your cost structure underneath the running of your business, or marketing campaigns. Takes some time to innovate in this area if possible.
Business plans they say other things that investors ask you to write and then never read themselves. Who knows if you yourself have actually looked at it, and that’s if you even have one! When you have created your Revenue Roadmap however, you’ll need to look at your cost structure underneath the running of your business, or marketing campaigns. Takes some time to innovate in this area if possible.
One of the best things that we ever did at Growth Coaches was to create a ‘Marketing Spend Calculator‘ that helps people who find the smorgasbord of digital marketing tactics overwhelming. We wanted to help them figure out how much they should spend, and where, and in what priority.
We built it on a platform that was costing us money to run. So it was sitting in our Cost Structure. But the tool was so popular and was so well used, that we decided to move it into our Revenue Streams part of our Revenue Roadmap, and make it a paid service.
Now that had two effects. The first is that our leads of course, as you can imagine, cut completely down because now people had to pay for it and there was a barrier. But on the plus side, it actually self-qualified leads because it was providing us a stream of leads that were willing to pay for a solution, even if it was only really the start of a solution. Every now and then we switch it back to ‘FREE MODE’ as a value add, but the point is here that it is no longer locked into our Cost Structure.
So take a look at your cost structure part of your business. Is there anything there that could actually be moved to a different section, could be co-marketed with a partner and affiliate program, or perhaps just moved into your Revenue Stream?
Map out your expenses
Try to consider all your costs of doing business (ie. customer acquisition, distribution, etc.), and make sure your customer lifetime value exceeds your acquisition cost.
90% of new businesses fail because they do not properly consider the cost of launching and running their businesses.
Tip! To ensure you don’t accidentally overlook a cost, consider how each section of your Revenue Roadmap might drive business expenses. For example, what is the cost to create, develop and launch services promised in your value proposition? What is the cost to identify target consumers, connect with users, and keep them informed of your brand? When filling in this section, take time to reflect on all possible cost scenarios.
A key part of creating value for your customers, which drives revenue growth, is knowing what the alternatives are to what you’re offering.
Your biggest competitor: “Doing nothing”
So you’re running a business and you know that your customers have a particular problem, or that you can solve a particular list of problems. The next thing you want to do is to find out what the existing alternatives are for your solution. It may not necessarily even be a competitive product. It may actually be that your prospects do nothing at all. It may be that an existing alternative is to not do anything because they are too scared of making the mistake of getting the wrong product, or getting the wrong service. So your would-be customer delays the decision-making process even longer.
An existing alternative might be a competitive product, in which case you need to figure out, “Well what is it that I solve that my competitor doesn’t solve?” If you’re a Business-to-Business (B2B) company selling tasks that are outsourced to you, an existing alternative could actually be your customers hiring an internal team to do it instead. So you might actually be competing against an internal team. In this case you’ll want to frame your solution in a way that explains the benefits of using an external team versus an internal team.
The point is, don’t just think about competitive products. Also think about some of the excuses and the things that people do, sometimes even just out of human nature, that would replace your solution in their problem context – even if it means they’re doing nothing.
So what are the existing alternatives?
How else can your customers address their problems? What products or services already exist as alternatives to yours? This section is where you identify competition. Who are you up against?
Research your competition using multiple methods. Ask target customers about other products or services they’ve explored or used. Utilise search engines, social media and trade publications to become an authority on your industry.