How To Repeatedly Make Sound Decisions

Posted on December 28, 2021 by harborcapitalgroupinc

Make Sound Decisions Repeatedly

A survey of top executives showed that executives only make “sound decisions” 52% of the time.

That’s only 2% better than flipping a coin. So if you could improve just a few percent, you could be

in an elite class of decision-makers who make sound decisions repeatedly.

Why is it only 2% better than flipping a coin? There are three reasons:

1. Their extensive industry knowledge and expertise.

2. Their reliance on analysis and critical thinking

3. Their self-limiting perspective.

Industry expertise can hurt your ability to make sound decisions.

In becoming a decision-maker, you have accumulated extensive knowledge and experience in your industry, market, products, and services.

You have talked to many customers. You know how what works and what doesn’t work.

You have established patterns, processes, and a culture of how “we do it here.”

While all of this is necessary, it has also established automatic thought patterns, which you can refer to quickly.

And at the same time, it limits your ability to think outside of your industry and market

to understand how other markets and industries might think about and handle the problem or opportunity.

So they decide based on the past rather than exploring new ways to think about the problem or opportunity.

Hearing about how a different market does something often gives them ideas on

how they might use this idea or process to solve a problem or improve their strategy, product, or service.

All this built-in knowledge and experience keeps them from repeatedly making sound decisions.

Over-reliance on analysis prevents making sound decisions.

We learned that gathering enough information and analyzing the data thoroughly

was the “the way” to solve problems and create a better way forward.

Unfortunately, making data-driven decisions often does not work because analyzing the data is all about the past, not the future.

So, if you need to move forward into the future, all those old solutions and ideas will not work.

Here’s an article from Forbes if you want another view.

Critical thinking is a good process and should be used,

but the object of critical thinking is to judge whether the information you have is correct or not, true or not.

That is undoubtedly important to understand the problem or opportunity,

but it will not help you look into the future to solve this new problem or exploit this unique opportunity.

The goal, of course, is to make sound decisions repeatedly.

Here is a traditional view of critical thinking from the Critical Thinking Organization.

Limited perception inhibits making sound decisions.

The first and maybe the most important thing you need is to see the problem or opportunity.

In other words, your perception. It is your perception that will design a solution.

One of the best ways to explain this is with an example. Here is one from Edward de Bono.

A group of 12-year-old boys was always picking on Bobby, one of the boys.

Because that is what they do at that age, one day, they showed Bobby two coins,

a larger one worth one dollar and a smaller one worth two dollars, and they told Bobby

he could pick one of the coins and keep it.

Bobby picked the larger coin, and the other boys laughed and talked about how dumb Bobby was.

They made this offer whenever they wanted a good laugh at Bobby’s expense.

One day an older man saw what they were doing and told Bobby that the smaller coin was worth twice as much as, the larger coin.

Bobby said he knew that. But if he took the two-dollar coin, they wouldn’t keep returning and giving him additional coins.

Conclusion

Expertise and analysis are essential, but you must look forward rather than just backward

and broaden your perception if you want to move forward.

So, your perception of the situation is often not considered and is critical to your decision.

That is how you will make sound decisions repeatedly.

You will want to check out our blog post, “How To Get Significantly Better Results In Less Time.”

Also, check out our website, How To Create Strategies That Turn Goals Into Results.

How To Make Better Decisions, More Often

Posted on December 28, 2021July 24, 2024 by harborcapitalgroupinc

Make Better Decisions, More Often

In a survey of top executives, the results showed that executives made “sound decisions” only 52% of the time.

That’s only 2% better than flipping a coin. So if you could improve just a few percent, you could be in an elite class of decision-makers.

Why only 2% better than flipping a coin? There are three reasons:

1. Their extensive industry knowledge and expertise.

2. Their reliance on analysis and critical thinking

3. Their limited perspective.

Industry knowledge and expertise

By the time you become the decision-maker, you have accumulated extensive knowledge and experience in your industry, market, products, and services.

You have talked to many customers.

You know how what works and what doesn’t work.

You have established patterns and processes and probably have established a culture of how we do it here.

Don’t limit yourself to your expertise and your built-in biases

While all of this is necessary, it has also established automatic patterns of thought, which you can refer to quickly.

And at the same time, it limits your ability to think outside of your industry and market to understand how other markets and industries think about the problem or opportunity.

So they decide based on past thinking rather than exploring new ways to think about the problem or opportunity.

Hearing about how different markets do something can often give you additional ideas on how

you might also use this idea or process to solve a problem or improve their strategy, product, or service.

Overreliance on analysis and critical thinking

Most people were taught that if you gather enough information and analyze the data thoroughly,

you will develop “the way” to solve the problem or create a better way forward.

Ufortuanlly, this does not often work because the data you are analyzing is all about the past, not the future.

So, if you need to move forward into the future, all those old solutions and ideas will not work.

The Critical Thinking Process

Critical thinking is a good process and should be used, but the object of critical thinking is to judge whether the information you have is correct or not.

It is undoubtedly important to understand the problem or opportunity,

but it will not help you look into the future to solve this new problem or exploit this unique opportunity.

Another view

Here’s an article from Forbes if you want another view.

Here is the caution when dealing with averages and human behavior data.

As you know, there are many variations in personal values within that average.

So, if you are thinking about behavior, be sure to take into account all the possibilities that data includes.

Market segmentation and psychographies will help get your thinking started.

Here is a traditional view of critical thinking from the Critical Thinking Organization.

Limited perception

The first and maybe most important thing you need is to see the problem or opportunity. In other words, your perception.

It is your perception that will help you design a solution. One of the best ways to explain this is with an example.

Here’s an example from Edward de Bono.

A group of 12-year-old boys was always picking on Bobby, one of the boys. Because that is what they do at that age.

One day, they showed Bobby two coins, a larger one worth one dollar and a smaller one worth two dollars, and they told Bobby he could pick one of the coins and keep it.

Bobby picked the larger coin, and of course, the other boys laughed and talked about how dumb Bobby was.

They made this offer every time they wanted a good laugh at Bobby’s expense.

One day an older man saw what they were doing and told Bobby that the smaller coin was worth twice as much as, the larger coin.

Bobby said he knew that. But if he took the two-dollar coin, they wouldn’t keep coming back and giving him additional coins.

There is a distinction between a perception and a concept.

Perception is a grouping of things realized when we look out at the world—for example, a mountain.

A concept is a grouping of things discovered when we look inwardly at our experience.

A concept has a purpose or benefit—for example, a takeout restaurant.

Also, a concept always consists of both the concept and its implementation.

Conclusion

I want everyone to make better decisions more often, me included.

Expertise and analysis are essential, but you have to look forward rather than just backward.

You may also have to broaden your perception if you want to move forward.

So, your perception of the situation, which is often not considered, is critical to what kinds of decisions you will make.

PS. If this information helped you with your decision-making, let me know how it helped (or did not help) so we can help others.

How Your Value Proposition Defines Your Website’s Success

Posted on December 14, 2021 by harborcapitalgroupinc

How Your Value Proposition Defines Your Website’s Success

Visitors come to your website because they have a specific problem that needs to be solved.

But, visitors will only give you about 8 seconds before deciding if they will stay and read more.

If they stay, you have about 125 words to convince them that your company has the best solution to their problem.

They will probably not read on or even scan the page if they are not confident. They will move on and probably never come back again.

Tell your value proposition story quickly.

Years ago, we were taught to start with the problem and then offer the solution.

But think about it. Your visitors already know the problem, so they are at your website.

They are searching for the answer to their problem.

You need to convince them immediately that your value proposition solves their problem.

Tell them why you can solve their problem.

Tell prospects what you do and how you solve their problem

Why your solution is superior to your competition.

Your value proposition needs to compel them to read your entire story.

They will most likely move on without a clear, targeted value proposition.

Most people look at multiple companies before deciding to move forward.

To show you how few companies have a compelling value proposition,

marketingexperiments.com states that only 2.2% of businesses have a compelling value proposition.

You must also tell your value proposition story quickly at the top of your website.

Very few websites have a value proposition, and even fewer have it at the top of their website.

Check out your competitor’s websites and see how many have a value proposition and what you see as your competition.

Remember, your website is about what they want to hear, not what you want to tell them.

Here are the basics you will want to include:

Headline. The headline tells the reader your value proposition in one sentence, no more than two sentences.
Yes, it’s only one sentence, but you will have to write it many times to get it perfect and make it attention-getting.
Next, write a short explanation of the critical elements of your value proposition in two or three sentences. Remember, you have to be able to deliver what you promise.
Then, add up to three features, benefits, or unique differences you offer. Individual bullet points are an excellent way to highlight these benefits.
A positive image, if possible. You know, of course, it’s worth a thousand words :).

Here are the basics you will want to include:

Headline. The headline tells the reader your value proposition in one sentence, no more than two sentences.
Yes, it’s only one sentence, but you must write it many times to get it perfect and make it attention-getting.
Next, write a short explanation of the critical elements of your value proposition in two or three sentences. Remember, you have to be able to deliver what you promise.
Then, add up to three features, benefits, or unique differences you offer. Individual bullet points are an excellent way to highlight these benefits.
A positive image, if possible. You know, of course, it’s worth a thousand words :).

I am sure you will consider many more questions to examine as you define your value proposition. To NeilPatel.com, Google cares about how long people spend reading your webpage. If visitors spend time on your page, you got it right.

Conclusion

Your value proposition is critical. You will be in a class all your own if you have a compelling value proposition.

You will want to get it “perfect,” which will take some time.

It may only take a few minutes to write, but it will take many tries to perfect it.

To get started, ask yourself these questions.

Why does the potential client want to solve this problem? I
Is there no workaround?
How is the problem affecting their business?
Why haven’t they been able to solve it already? How can you solve the problem?
What outcome and benefits result from your solution? Here are the basics you will want to include:

P.S. I would love to hear how the development of your value proposition went and how successful you have been since you implemented it. Go to our website and let us know. Your story may inspire and help others (and us) try to improve their value proposition.

PPS. You might want to check out this blog post as well. Transform Your Competitive Market Into an Uncontested Market. Click Here

Innovative Strategies: Leverage Potential Change

Posted on November 15, 2021 by harborcapitalgroupinc

Exploit Market Changes

Industries and markets are constantly changing for many reasons, including technology, a new business model, or a pandemic.

When this occurs, companies have two choices: adapt to current changes or, longer-term, be disrupted.

But, if you pay attention to these changes, you can develop innovative strategies for revenue growth and exploit these market changes.

That is what we are going to talk about in this blog, how companies react to these changes, how you can adapt your strategy to these changes

to gain product value, revenues, and even a long-term monopoly in your market.

Companies that do not adapt generally resort to inertia or entropy.

What is inertia?

Inertia is the unwillingness of the affected company to adapt.

Not adapting could be caused by routines (the way we have always done things) or an unwillingness to change strategies because it will hurt current profit streams.

They assume that these current profit streams will continue.

However, this also opens up opportunities for others. For example, Netflix replaced Blockbuster. Walmart replaced K-Mart.

What is entropy?

Inertia generally leads to entropy. Entropy is not keeping your product line up to date and, therefore, losing clients, sales, and market share.

The primary reason entropy becomes the problem is that the company becomes less focused on its products,

often reduces prices and generally becomes less responsive to its customers. You might agree with Elon Musk, “I think you should always bear in mind that entropy is not on your side.

Again, entropy opens opportunities for competitors to innovative strategies for revenue growth. Product-market fit is not a permanent status.

For example, the Encyclopedia Britannica was replaced by Wikipedia. Photographic film was replaced by digital cameras.

Innovative Strategies: Examples of Potential Opportunities

Your strategic opportunity is to pay attention to these changes and be willing to innovate your products or services and experiment.

In that case, you can leverage your current strategy.

You can capitalize on these changes with new concepts, ideas, products, or services that should generate new revenues and profits for years to come.

A few examples of potential innovative strategies for revenue growth in market changes are happening today.

Innovative strategies for potential changes in auto Insurance

Every car insurance company says -one way or another- you only pay for what you need.

And there are companies with apps comparing prices. How long can profitability last?

I also realize that much of their money is made on premiums and reinvesting premiums into other interest-paying assets.

But what happens when interest rates change, and the spread collapses?

What happens when car buyers switch from buying cars to subscribing to vehicles?

This concept is just getting started, but the idea is increasing globally.

Just pay a monthly fee and drive off the lot. You have a three-year subscription and can change car models every 12 months.

You subscribe at the dealership, and your monthly subscription includes insurance (they want to protect their asset.)

This concept is new, and I assume changes will be made along the way.

Other opportunities include electric cars, charging stations, gasoline prices, parts costs, and many more.

Is there an opportunity for an innovative strategy for growth, or are insurance companies the next Blockbuster video rental company?

How could you take advantage of these opportunities if you are in this industry?

Innovative strategies for opportunities in the phone market

One telephone service company sells its service for $75 per month,

and another sells the same service with the same coverage for $25 per month.

Are costs plummeting, or are more and more competitors entering the market?

Or are the phone companies still making money on phone sales?

But we see ads claiming you can save about 50 percent on some phones.

Are these companies simply discounting to get updates or new customers

— or calling it the marketing cost of acquiring a new customer who will eventually be profitable over the long term.

Plus, what technological advancements are going to happen? Will SMS messages all become MMS multimedia messages?

Will there be anyone left on laptops? What will happen with 5 G?

How will this evolving industry affect your market, product, or service? And how quickly?

Innovative strategies for opportunities in the real estate market.

Real estate companies continue to reduce their commissions and have gone from 6% commission down to about half that amount.

Companies and agents use marketing companies to get listings and independent agents to sell homes.

This new sales model has dramatically reduced costs.

There have also been new sales models like “ibuyers,” who buy a home in cash with no fees,

spend a few dollars updating the home, and resell the house for a profit. Can this last with higher interest rates and slowing house prices?

Also, many real estate companies own title companies because that is another way to “cross-sell” and increase their sales and profits.

But what if title companies begin using blockchain technology to make title registration faster, easier, and safer –maybe reducing title insurance?

Or what if the real estate agent took the average discount the buyer wanted and gave the buyer a portion of that discount as a “bonus” at closing for buying the house?

That money would be much more valuable to the buyer than the small amount that would reduce the monthly payment.

Considering all the variables that go into the real estate market, how will this market change in the next 3-5 years?

How will the real estate companies deal with all the brick-and-mortar offices across the country?

More changes and opportunities to come

Those few common examples are only the beginning of the changes we will see in the coming years.

For example, what will RoKo streaming television do to cable companies?

Or is Artificial Intelligence taking over more and more tasks?

Or are 3D printers building homes in a couple of days?

The list could be extensive, but you get the idea: everyone is or will be affected by continuous changes in our world.

One way you can deal with these changes is to monitor the changes knowing that some companies

will adapt quickly while others will respond with inertia and/or entropy.

Those companies are easier to identify and give you time

to create and modify your strategy to be the value leader in your industry and market

-and maybe own the monopoly position in a new market niche.

Conclusion

Gain Strategic Leverage From Market Changes

-Market fit continues to evolve and change with the economy and the customer’s needs and wants.

Therefore, stay alert and be ready to take advantage

of the many new opportunities to modify your strategy as required.

Who can argue with Elon Musk’s perception of the future?

He says, “you have to get into a new market several years ahead of the apparent trend to be a player in that market.”

Cheers,

Jim Zitek

PS. If you would like to learn more about business growth strategies,

check out this blog post: Why your business growth story is your story

PPS If you want to get the right information at the right time, check out our website,

How To Define And Solve The “Real” Problem

Posted on November 4, 2021July 26, 2024 by harborcapitalgroupinc

Define and solve the real problem

We’ve all been there—several people discussing the problem that needs to be solved to meet the goal. But the challenge is that different people have different definitions of the “real” problem. This short blog post, taken from Michael MIchalko’s book, Thinkertoys, will help you end that uncertainty. It will help you identify and prioritize problems and convert them into specific challenges using creative thinking. I have condensed this to keep it as short as possible for this blog post.

Start by making a list of the problems that need to be solved. Following are a few examples. How can I increase revenues by 20% this year? How can I cut costs and increase production? How can we better differentiate our product from our competitors? How can we improve the role of the service department?

Just the act of writing your challenges down may result in some immediate ideas.

Carefully craft your challenge statement.

The more time you devote to perfecting the wording of your challenge, the closer you will be to a solution. When you have a problem, write a challenge statement out, study it for a while, then leave it, change it, stretch and squeeze it, and restate it. Questions help you look at a challenge from different perspectives. Following is the blueprint for executing this statement challenge.

Blueprint

Broaden your view.

Write your statement as a definitive question, beginning with “In what ways might I (statement)…?”
Vary the wording of your challenge by substituting different synonyms for keywords to broaden your perspective of the problem (e.g., increase to multiply to enlarge)

Then, squeeze your view down to a very narrow, specific perspective.

Divide your challenge into subproblems
Solve the subproblems
Then, Keep asking how else? And why else?

Again, positively phrase these problems and as a question: “In what ways might I…?” This form helps keep you from concluding what the problem is too quickly. You want many different perceptions of the situation to see other possibilities.

Stretching the challenge

To keep your mind open to all possibilities, stretch your challenge by asking “why?“ several times. Also, asking why will help you identify your general objective and challenge your assumptions. This process will also help you redefine and reshape your challenges.

For example, suppose your challenge is “in what ways might I sell more computers?“

Why do you want to sell more computers? Because we need more funds to pay bills.
Why do you want to increase revenues? Because costs are growing.
Why do you want to sell more computers? Because sales are beginning to slow down.
Why do you want to sell more computers? To make investments in new products.
Why do you want to increase your sales volume? To take advantage of discounts.

Expanding your challenge gives you a broader concept of the challenge so that you can view many more approaches.

Squeeze the challenge

When you have a broad idea of what you are trying to find, narrow the objective from the general to the specific by squeezing it. This process makes your challenge easier to solve. To squeeze a challenge, you want to discover its strengths, weaknesses, and boundaries. To do that, ask who, what, where, when, why, and how.

Who might have unique strengths and resources or access to helpful information
What helps identify all the things, objects, and items involved in the situation, the requirements, difficulties, rewards, and advantages and disadvantages of formulating a resolution.
Where considers the place. Locations or focal points of the problem.
When probes schedules, dates, and timeliness of the situation.
Why helps you reach an understanding of your primary objective.
How helps you recognize how the situation developed, actions that may have been tempted or now occurring, and steps that one could take.

You’re going to do that for the larger problem and the subproblem.

Conclusion

Going through this exercise will enable you to see all of the things you need to do to solve the real problem. Now, you can prioritize them and accomplish them one by one until you can reach your goal. You may also have to redo your analysis as you go because things will change.

PS. If you want to get the right information at the right time, go to our website, sign up for the ClickVisorTM program, and learn about innovative strategies for continued revenue growth.

How To Define And Solve The “Real” Problem

Posted on November 4, 2021July 26, 2024 by harborcapitalgroupinc

Start with a list of problems.

Just the act of writing your challenges down may result in some immediate ideas.

Carefully craft your challenge statement.

The more time you devote to perfecting the wording of your challenge, the closer you will be to a solution. So the next time you have a problem, write a challenge statement out, study it for a while, then leave it, change it, stretch and squeeze it, and restate it. Questions help you look at a challenge from different perspectives. Following is the blueprint for executing this statement challenge.

Blueprint

Broaden your view.

1. Write your statement as a definitive question, beginning with “In what ways might I (statement)…?”

2. Vary the wording of your challenge by substituting different synonyms for keywords

to broaden your perspective of the problem (e.g., increase to multiply to enlarge)

Then, squeeze your view down to a very narrow, specific perspective.

1. Divide your challenge into sub-problems

2. Solve the sub-problems

3. Then, Keep asking how else? And why else?

Again, positively phrase these problems and as a question: “In what ways might I…?”

This form helps keep you from concluding what the problem is too quickly.

You want many different perceptions of the situation to see other possibilities.

Stretch the challenge

For example, suppose your challenge is “in what ways might I sell more computers?“

1. Why do you want to sell more computers? Because we need more funds to pay bills.

2. Why do you want to increase revenues? Because costs are growing.

3. Why do you want to sell more computers? Because sales are beginning to slow down.

4. Why do you want to sell more computers? To make investments in new products.

5. Why do you want to increase your sales volume? To take advantage of discounts.

Expanding your challenge gives you a broader concept of the challenge so that you can view many more approaches.

Squeeze the challenge

Once you have a broad idea of what you are trying to find, narrow the objective from the general to the specific by squeezing it. This process makes your challenge easier to solve. To squeeze a challenge, you want to discover its strengths, weaknesses, and boundaries. To do that, ask who, what, where, when, why, and how.

1. Who might have unique strengths and resources or access to helpful information

2. What helps identify all the things, objects, and items involved in the situation,

the requirements, difficulties, rewards, and advantages and

disadvantages of formulating a resolution?

3. Where considers the place? Locations or focal points of the problem.

4. When probes schedules, dates, and timeliness of the situation.

5. Why helps you reach an understanding of your primary objective?

6. How helps you recognize how the situation developed, actions that may

have been tempted or now occurring, and steps that one could take?

You’re going to do that for the larger problem and the sub-problem.

Conclusion

Going through this exercise will enable you to see all of the things you need to do to solve the problem.

Now, you can prioritize them and accomplish them one by one until you can reach your goal.

You may also have to redo your analysis as you go because things will change.

Try to go through this discovery process. The first time makes you think. But you will be surprised at the results you get.

Table of Contents: Marketing Straregy

Posted on November 3, 2021 by harborcapitalgroupinc

This Post is the table of contents for the Revenues module. Please review the articles you want to look at and click on the article. It will take you to that article. You can then click back to this page and select another article you want to read or re-read, You also have the option to simply read all of the articles as they were posted on this module.

If you have questions, you can email us from the contact page and post your questions there. Also, if you have a suggestion for an article you or others would like information about, email us, and we will look into it. You can email us at https://https://harborcapitalgroupinc.com/wp-content/uploads/2024/07/Braintopview-1.jpg.com/contact-us.

Marketing Strategy

Marketing Mastery: Unveiling the Strategy Behind Success

Why Is Marketing Strategy Important?

Why Marketing Strategies Are So Important

Your Value Proposition Is The Key To Revenue and Profit Generation.

Why Customer Lifetime Value Is So Critically Important

Follow Up, Then Follow Up Again

Work Your Customer List First

Reverse The Customer’s Risk And Increase Sales

Website

How To Turn Your Website Into A Selling Machine

Outbound Marketing

Outbound Marketing – Its Importance and Benefits

How To Use Your Website to Build An Enormous eMail List

Inbound Marketing

Inbound Marketing – Its Importance and Benefits

Using LinkedIn, Inbound And Outbound Marketing Program

Messaging

Positioning Is The Battle For Your Mind

Positioning: A Competitive Breakthrough

What Does Customer-Centered Mean?

How Empathy Improves Marketing Results

How to find your perfect market niche

Differentiation Is The Key To Profits

SEO

What you need to know about Search Engine Optimization (SEO)

Are Search Engines Missing Your Website?

Whiteboards

In Our Video World, Whiteboard Animation Is Growing Rapidly

Why Create A Whiteboard Animated Video

Elements of A Whiteboard Animated Video

Direct Mail

Important Ways To Improve Your Direct Mail Marketing[/vc_column_text][/vc_column][/vc_row]

Contents: Strategy

Posted on November 3, 2021 by harborcapitalgroupinc

START HERE> This Post is the table of contents for the Strategy module. Please review the articles you want to look at and click on the article. It will take you to that article. You can then click back to this page and select another article you want to read or re-read; you also have the option to simply read all of the articles as they were posted on this module.

If you have questions, you can email us from the contact page. Also, if you have a suggestion for an article you or others would like information about, email us and we will look into it. You can email us at https://https://harborcapitalgroupinc.com/wp-content/uploads/2024/07/Braintopview-1.jpg.com/contact-us.

Pre Strategy

The Critical First Step Toward New Product Success

Part Two: How To Get Product Validation And Commitment

Start With Why

Competitive Market Strategy

What Is A Strategy?

How Innovative Strategies Drive Sales

Why Both Research and Diagnosis are Invaluable Tools in Your Strategy Toolkit

Getting To An Agreed Definition Of The Problem

The Foundation Of A Strategy Is The Kernel

General Policy and Cohort Action

Why Your Strategy’s General Policy Is Critical

How To Use Dynamics To Find The Strategic Highground

How To Identify And Use Your Competitive Advantage

Competition vs. Sur/petition, Part One

How To Create Value Monopolies, Part Two

How To Set Your Company Apart From Your Competition

Creating And Sustaining A Competitive Advantage

Using Leverage

Leverage Strategy Through Inertia and Entropy

How To Use Anticipation As A Powerful Strategy Tool

Innovative Strategies For Revenue Growth: Exploit Market Changes

Blue Ocean Strategy

What Is Blue Ocean Strategy?

Creating Blue Oceans

The Blue Ocean Strategy Canvas

The Characteristics Of A Good Strategy

Reconstruct Market Boundaries/Path One

Path Two: Look Across Generic Groups Within Industries

Path Three: Look Across Your Chain Of Buyers

Path Four: Look Across Complementary Products And Services

Path Five: Look Across Functional Or Emotional Appeal

Path Six: Look Across Time

Storytelling

15 Benefits Of Storytelling In Businesses

Why A Core Story Is Critical To Your Success

How do you create a core story?

A Quick And Effective Way To Tell Your Story

What Information To Put Into Your Story To Make It Successful?

Research/Diagnosis

Why Both Research and Diagnosis are Invaluable Tools in Your Strategy Toolkit

An alternative diagnosis with an emphasis on creating value vs. competitors

Diagnosis: Understanding your industry structure and its competitive forces

Six Different Ways To Diagnose Your Problem

How to use anticipation as a strategy tool

Creativity and Innovation

Why Everyone Has The Capability To Be Creative

Part Two: Turning Creativity Into Innovations

Insights, not data or information, lead to better strategic decisions.

An alternative way to get the insight you need to create your strategy

How You Approach Problem-Solving Matters

Solve Problems And Gain Insights Intuitively

Create New Concepts Before Your Competitors Do

Creative Results From Your Team

The Random Word Technique/A Creative Tool For New Ideas

Win or Fail

Why Do Some Strategies Fail?

Why Customer Lifetime Value Is So Critically Important

Posted on October 26, 2021 by harborcapitalgroupinc

Why Customer Lifetime Value Is So Critically Important

Customer lifetime value (CLV) is an important business metric. It is the total revenue your business earns from a customer over time. It gives you a picture of the business’s short-term, long-term status, and financial viability. It is also an indicator of product-market fit, client loyalty, and recurring revenue from existing customers.

CLV gives you an understanding of the costs and profits of your business as it relates to acquiring, generating revenues, and retaining customers. Also, getting repeat orders from existing customers brings in a healthy cash flow regularly into the business. When you know what a customer will spend with your business over time, you can consider more options for your acquisition budget.

There are two basic ways of calculating CLV, depending on what data you have available.

1 Accumulated data

If you have historical sales data, this method is far more accurate. It puts together all orders by individual customers to get their own real CLVs.

2 Average estimate

If you don’t have granular data, you can estimate an average by the following formula: Average order value times number of orders per year.

How to calculate Customer Lifetime Value

For instance, if your customer base will, on average, buy ten times per year at $10 per transaction (or $100 per year) for ten years, the lifetime value of a customer is $1,000 (minus costs). If your profit is 25% of sales, the CLV is $250 (25% of $1,000). Therefore, you could technically afford to spend $250 to attract a single new customer. However, many marketers suggest that you do not spend more than 33% of CLV or, in this example, would be $82.50.

Another view. If you could improve each of the three CLV numbers by 10%, you would increase profits by 33 percent, giving you a profit of about $332 (plus $82). This additional profit could then be added to your marketing budget to grow even faster the following year.

Now, how can you improve each element of your CLV?

Now that you know the lifetime value, you want to spend some serious time examining how you can improve your revenues and profits. This information will also give you a long-term look at your business and help you plan for the future. To improve your results, you should do the following things sequentially:

Increase the dollar amount of each sale to a customer.
increase the frequency that customers purchases from you. ,
Try to increase the number of products or services you provide for your customers.
Then, you can begin to increase your market share by going outside — to increase your market share by working on your competitor’s customers.

This process also forces you to look at different market and customer segments. For example:

Who are your best customers and worst customers using CLV? How can you get more of the good customers and maybe less of the lower value customers?
Which products provide the most revenue and profits? Can you add value to your products and increase the price?
Which industry or market segments provide the most or least CLV? Are you in the best markets, best niches, and aiming for the best clients?

You also want to generate many alternative ways to increase your CLV

Now, you can focus on developing many alternative ideas and practices to increase your CLV. You want to focus on your overall business strategy, potential innovations, and marketing strategy. More information is available on our ClickVisor program to help you accomplish these crucial tasks.

Consider Multiple Marketing Approaches

This process also requires you to expand your marketing approaches based on the industries, segments, and types of customers. It is also a good idea to have more than one marketing approach that you continue to use long term. You need to try and test different approaches as the world, and people change.

CLV will change as you create and implement new programs

As you implement your marketing program, this lifetime value should change as the variables in the process change. So, reviewing your CLV regularly make sense. It will cause you to rethink many things you’re doing as you are always looking for ways to improve that number.

Conclusion

Client Lifetime Value is an essential concept for every business. It goes hand in hand with customer repeat orders and retention. It is also a great concept to broaden your thinking about your company and its mission. Plus, businesses with a high CLV can service their client better and grow continuously over time.

Contents Leadership/Execution

Posted on October 18, 2021 by harborcapitalgroupinc

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