Clarifying Your Products And Services, And Your Customers

In today’s coaching session I would like to talk about Your Products and Services, and your Customers,  the first two items in Step 3 of your business plan –

Step 3 is what we call the “building blocks” of your business plan. In order to plan ahead, it’s important to be clear where you are now, so let’s make sure we have a clear understanding of what we are selling and who is our ideal customer.

This can get a little confusing and there are a few differences if you are in the Business to Business market or the Business to Consumer market. I will address this topic today using the Business to Business context.

The ideas are equally applicable to the Business to Consumer world, the main difference is that Business to Consumer companies tend to have higher numbers – more products and services and more customers. So keeping track of these details can be a bit more challenging, but the principal is the same

It’s helpful to talk about these two topics together- what you are selling and who you are selling to, are obviously interrelated.  However, to simplify the task, we separate the two ideas, then think about the changes you want to make to either or both, going forward.

As with all the other parts of your plan, it’s important to continuously clarify What you are selling and Who you are selling to

The intent here is to ensure you are offering  products or services that  are truly NEEDED by your customers,  and also  to keep you focused on the most important clients, the ones  most likely to buy, and the most profitable to your business

In the B2B world it is common for companies to sell through agents or distributors as well as directly to the end user. If that is true in your case we recommend that in  this section of your business plan you think of your customer as the end user. The next section on Partners and Alliances is set up to capture information about your relationships with agents, distributors, and suppliers (if, for example,  you are selling products manufactured by others)

I’ll use Plan Genie as an example of what this section of your plan could look like.

Let’s start with PG Products and Services:

Here at PG, we have only 2 products we sell, the basic PG web based work book and our White Label version of PG, which we sell to organizations.

Our current fee schedule includes a an annual  license fee and a renewal fee.

Our business is fairly simple to describe –  we have two products and a simple fee schedule. Yours may be more complex than that.

Now that we have a clear picture of our products and services, let’s turn our mind to who we are selling to, a description of our customers

Again, I will use PG as an example of how to approach this

Our ideal client looks something like this:

A company or an individual that

  1. Has recognized the need for an ongoing, working business plan
  2. Is ready to invest the time and money in this work, if they can find the right product
  3. Wants to learn more about running a successful business
  4. May want to do it themselves, or open to invest in a coach/consultant to help
  5. May have tried to write a BP in the past, but were not happy with the result
  6. Understand the need to work “on” their business as well as “in” their business to enjoy long term success and satisfaction
  7. Sincerely want to improve the communication with their employees and other stakeholders
  8. English speakers only
  9. Unlimited by geographic location since the product is web based

Few new prospects will tick all these boxes but if they meet even 2 or three of these criteria they are viable future customers and worth spending time on.

So, that is a quick look at describing a target customer for your busines. Getting clear about your target customers impacts so many things about your business, from your marketing plan to future growth opportunities.

I’d like to make a comment  about secondary markets:

In our business we are also looking for prospects that meet criteria for our Secondary Market

We define our Secondary market as:

  • Companies, organizations that are required to prepare and update a business plan as part of a contractual agreement with a parent company or business partner
  • And may have some of the attributes mentioned above

An example of a prospect in this secondary category is someone who has a loan condition or lease agreement that requires a written business plan be submitted at least annually

And we have yet another set of criteria to describe our target customer for our white label product.

(For our White Label product, we have defined 6 broad market sectors that are.

  1. Industry Associations
  2. Business consultants/Coaches
  3. Franchisors/Independent Professional Sales Organizations
  4. Accounting/legal Firms
  5. Lending organizations
  6. Business Trainers, educators

Then, within these sectors we are looking for those organizations that:

  • Believe their client base will benefit from working form a written plan
  • Offer educational support and other business tools to their clients)

As you can see, this work can get fairly detailed as you drill down and think through these questions. You may want to do some of this work off line using a spread sheet or other formats and bring the summary information back to your business plan.

As you work on your business plan over time, you will get clearer about these two concepts and it will cause you to be more proactive in making changes to your product lines, in tune with your customers’ changing needs. This baseline information is the starting point for innovation, your key to long term success.

By the way, this is a great place to involve your employees, once you have a draft document started.

Good luck and let us know if you need any help along the way

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