Sales as a topic is often underestimated when it comes to business model innovation and company building. Sales or sales strategy are often first addressed only in the preparation of the go-live phase of a product or service. Read here why this is often too late and how the V_labs Sales Strategy Canvas (which you can download in the canvas section) helps you think about sales strategically at an early stage.
What usually happens in the development of new business models before the first concept is developed
Many projects start with a vague search field or a problem. At the beginning, we strive to gain an in-depth understanding of the problem by means of an intensive research phase with the help of market and competitor analyses, interviews, trend research, incognito missions, etc. Often times, not much time passes from the point of understanding the problem to drafting the first idea. In many innovation projects, for example, a detailed product concept with features is generally developed straight away, while the distribution and sales approaches tend to be neglected.
The problem is that this way, it is impossible to recognise in time whether these components have been sufficiently considered. It is not until later in the development of the business case that the topic of sales is reflected at a strategic and, in the testing of the MVP, at an operational level.
It is a fact, however, that decisions and assumptions are already made with the formulation of the product idea and the associated vision. Moreover, factors are defined that have a significant influence on sales later on and can accordingly contribute to or, conversely, put the brakes on success.
These influencing factors around the product or vision deal primarily with questions such as:
To avoid the mistake of disregarding the influence of the above-mentioned factors on the sales strategy (and vice versa), or not considering them sufficiently or too late, the (preliminary) product idea should be set as a checkpoint before considerations for a high-level sales strategy start.
We have developed the V_labs Sales Strategy Canvas in order to structure these early considerations of the sales strategy. Above all, it helps to strategically discuss the interaction with the target group, its access, the legal form, the external appearance and the business model.
In the Sales Strategy Canvas, the vision and the detailed product idea are reiterated at the beginning as a quick recap. However, product and vision must already be clearly defined before filling out the Canvas. The Sales Strategy Canvas focuses on the most influential fields of (1) target group, (2) unfair advantage, (3) venture setting and (4) revenue model.
Customer and user focus are at the core of any functioning business model. However, defining personas in this early phase and thus drawing full conclusions about the target group is not enough. The first step is to find out which target groups are addressed by the innovation, product or service. Are there different target groups that have certain dependencies? Let us consider the example of a platform with a two-sided market: There is no demand without suppliers and vice versa. Closely related to this is the question of how the USP differs depending on the target group.
Who makes the buying decision is another important question to take into account. Are the users or customers also the decision-makers, or are these different people? Especially in the B2B sector, these two positions differ. This often implies – especially for sales – that two groups have to be addressed and convinced differently as they have different pain points. In addition, decision cycles for B2B segments may be longer than in the B2C sector, where users are usually also the ones making the purchase decision.
One question that is often underestimated or forgotten in this early phase is how to reach the target groups. An overview of the available channels – i.e. social channels, private and professional networks, existing business relationships with target companies, internal CRMs, sales contacts – helps to identify sales opportunities, potential market tests, as well as revenue potentials and models. Neither the target group has to be defined in its entirety, nor the one channel that works best has to be determined. Rather, it is important to make assumptions and hypotheses on the one hand, and on the other hand to attain a basic understanding of who the target groups and markets are and how they can be reached.
Target group access is closely linked to the Unfair Advantage. The majority of corporate company building projects result from a combination of an existing (customer) problem and the unique target group access through the corporate. Therefore, it pays off to look closely and map out as concretely as possible how target group access can be used (access by whom or what: department, people, sales network, IT systems, existing customers, etc.). Through a precise, structured evaluation of the target group access, you can avoid a supposed unfair advantage turning into a potential unfair disadvantage, so the (sales) potential of the entire idea cannot be validated or implemented.
Our key message: The earlier we have clarity about this target group access (and, above all, how it can be used concretely), the better the Unfair Advantage can be incorporated into a sales strategy, the right venture setting can be chosen and the foundation for sales success can be laid.
The positive influence and synergies with the parent company should not be underestimated, as well as the various obstacles that can arise from corporate proximity. The first step is to explore the possible venture settings (depending on the parent company, the partners involved, etc.). Firstly, the decision for the right venture setting is guided by the question of which advantages or disadvantages result from a setting close to or far from the corporation. Secondly, the venture setting is also determined by the target group and the potential customers. Are future customers possibly competitors? Does the venture target only existing customers? How close is the product/service idea to the core business? Depending on the answers to these questions, not only the legal form of the (corporate) start-up is determined, but also its external appearance. While the legal form tends to have an influence on the start-up's work and decision-making processes in many cases, the external appearance, including the brand, branding, communication, etc., influences the entire sales and marketing activities.
The revenue model must both fit the target group and industry, and also serve the business case and the corresponding revenue streams.
At the beginning, corporate start-ups in particular are often faced with the challenges of having to acquire their first customers quickly, growing and bringing the solution to the market. If the revenue model is too high-priced, too conservative or too high-threshold, it will be difficult to acquire the first customers and users in the MVP to market phase at the latest.
Therefore, it is advantageous, especially under the growth premise, to look at common revenue models from one's own industry. At the same time, analysing best practices from completely different markets can be beneficial. The result should be to find one or more revenue models for one's own (corporate) start-up, that support market entry and the first growth phase. You will quickly come across models such as freemium, pilot positions or demo accounts, which in many cases represent a promising sales strategy. Of course, it is also important here that the revenue model matches the target group, its access and the own Unfair Advantage.
After the strategic consideration of the four most influential sales fields, the learnings and take-aways from a sales perspective should be broken down and made a note of. These learnings should have an influence on subsequent phases and are to be continuously evaluated and reviewed.
These early high-level considerations help to set the course for later sales success factors and affect every project phase further down the line.
Of course, helpful tools are allowed: Use the V_labs Strategy Canvas for a structured approach.