Channel Management

Tools to Explore Demand Quizzing: cursory feature mapping for market- differentiation Visualization: to explore architecture of component assembly Mind mapping: clusters and prioritizes the features that influence potential customers Consumption chain analysis: identification of the potential marketing channel activity and target customers Detailed feature map for each activity to identify what should be managed

Tension On the one-side are arguments about what the customer wants (demand-side) Remember that the customer doesn’t care about us or our products We have to make them care On the other-side are arguments about what we can do (supply-side) These are determined by our core capabilities

Costs and Revenues The demand feature map identifies revenue generating opportunities through the differentiators and exciters, or revenue destroying risks through the dissatisfiers and enragers The supply feature map identifies Costs that must be controlled And matched to revenue generation opportunities

Feature or Attribute Map

Channel Activities Each bubble on the consumption chain represents a channel activity that must be managed Either the customer proceeds to the next activity Or you have lost that customer Feature or Attribute Maps identify the features that need to be closely managed

Toolsets Consumption Chain Analysis Determine the main steps in consumption You should only list the 3 or 4 most important steps These will determine whether the potential customer proceeds to the next step (good) Or leaves the consumption process (not good)

Toolsets Feature-Attribute Map the 3-4 Key Steps in the Consumption and Manage those 3-4 Steps Identify Discriminators and Energizers Describe how you will manage each of these features of the consumption process Basic Discriminator Energizer Positive Nonnegotiable Differentiator Exciter Negative Tolerable Dissatisfier Enrager Neutral So What? Parallel

E-Marketing Three Approaches Keywords (Google’s Adwords) Social (Facebook Ads) Banner (Demand Side Platforms, e.g. Distlry) Video (Hulu, Youtube) You need to define many things about your product and services before building a campaign

Platforms

Platforms

Channels + Venture Capital Challenge Determine the main steps in consumption chain – conversion cone One of these should be your AdWords campaign Venture Capital Challenge What is your business worth, and why? Costs of each of the consumption chain activities How will these expenditures keep the customer from leaving the chain-cone Conversion value, rate and risk

Your Capabilities Automatically differentiate your Innovations

The Purpose of a Business is to Create a Customer -- Peter Drucker Even if you create marvelous inventions Your customers won’t care Unless that is exactly what they need Business customers are especially impatient With any product that doesn’t help them gain competitive advantage

The Business Plan & Final Project And a supporting ‘Canvas’

What Investors Expect (The Business Plan) Elevator Pitch (25 seconds-25 words) How Much Money do you Need? (est. ROI) and When Customer (demographics, characteristics, motivation) Size of market and major competitors Your product + substitutes, competitors and complements Business model (Map Revenues vs. Costs over time) and benchmark businesses Vision, Milestones, Benchmarks Financial Projections: Timeline, ROI, Risk (be specific) Ice Breaker / Hook Narrative / Story Numbers / ‘The Beef’

Activity 1: Select a Product or Service Design a Product or Service Innovation that you are convinced can “Be Successful“ (however you define success) in the next 5 years Clearly articulate the necessary Core Capabilities (Capabilities =Assets + Competences) required by this business Describe its significant features-attributes Briefly articulate its main customer channels (markets)

Activity 2: Define your Product Attributes and Value Proposition

Activity 2: Customer Centered Product Innovation Detailed look at target customer usage and decision making regarding your product Looks at the customers “stream of consciousness” Who? … is with customers while hey use the product How much influence do they have If we could arrange it, who would we want the customer to be with … What? … Do our customers experience when the use the product … needs provoked our offering What else? … might customers have on their minds When? … do our customers use this .. Where? … are our customers when they use this How? … do customers learn to use the product .. Looks for ideas to Change the Customer’s Experience (i.e., redifferentiate your product) Experience is dynamic

Toolsets Organize Answers with a Mind Map

Summarize Product and Customer Value Proposition in the Attribute Map The Attribute Map compares your product to those of others Do not fill in all of the 3*3 cells let this be a map where you locate the characteristics of your 3 to 4 key features or attributes of your product or service Basic Discriminator Energizer Positive Nonnegotiable Differentiator Exciter Negative Tolerable Dissatisfier Enrager Neutral So What? Parallel

Activity 3: CRM = Channels+Customer Segments + Customer Relationships Determine the main steps in consumption Each step on the consumption chain has an attribute map You should only list the 3 or 4 most important steps These will determine whether the potential customer proceeds to the next step (good) Or leaves the consumption process (not good)

Activity 4: Complementary Assets Capabilities held by others that you need for your business What else is needed to complete your Commercialization? Complementary products create value Petroleum has little use without internal combustion engines Or Cars without Roads (US Road costs are around $5-10 per gallon of gasoline) Or Electricity without Electric Motors Or iPods without MP3s … you get the idea What are your ‘Killer Apps’? The complements that sell your product

Activity 5: Financial Forecast

Business Models Matter Telling a good story Part of selling your strategy / investment Tying Narrative to Numbers Strategy becomes less philosophy More performance and outcome When business models don’t work It’s because the fail either The ‘Narrative’ test Or the ‘Story’ test (1) must produces revenue by satisfying customer demand i.e., that meets the ‘Framing’ challenge; and (2) controls costs and generates a high return on investment, where expected revenues significantly exceed expected costs, and thus can be argued to meet the ‘Venture Capital’ challenge.

Forecast your Revenues From CRM and Value Proposition

Forecast your Costs From Capabilities and Market Entry

Estimate the profitability of your venture Put together your Value Proposition, Revenue forecast and Cost forecasts to estimate a time-series of expected profits Draw a value map describing your companies proposed business model, and provide some indication of the costs and revenues that will flow into and out of the parts of the business. Define your product’s top competitor in each of these attributes or features.

Activity 6: Vision, Milestones, Benchmarks ‘Vision’: Trajectory of your Markets and Capabilities Each new business model will demand shifts in your firm’s capabilities to allow you to compete in new markets with unfamiliar competitors You will need to decide how ‘best’ to: Choose your competitive terrain To enter your chosen market(s) And to marshal your assets, investments and competencies Where you think your firm, product and market will be at some point in the future Is how you summarize your view of the competitive trajectory you will take