Monthly Archives: November 2011

Would Licensing Cannibalize Your Sales?

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If you have an established service firm, you undoubtedly realize that you need to invest time and money to create a system (maybe even proprietary software).  It’s part of the ongoing process to be less labor-intensive, become more efficient, reduce training costs, and improve quality and consistency.

Once you do that, inevitably, someone in your firm comes up with the bright idea that your company could have another revenue stream if you license the use of your proprietary software or system to smaller niche businesses. You can’t reach every customer out there and the licensees will pay you for the privilege of increasing visibility of your product/system/ software; which strengthens your positioning as an industry leader.  But you pause because the licensees could actually become direct competitors to you and cannibalize your results.

Some business owners freeze at this point and pull back from the licensing option.  It pays to not freeze. A sales executive and/or informed contract attorney can create territories and spell out the rules to maintain the WIN/WIN situation.

Plus, here’s something else to think about. Could the licensees later become candidates for acquisition when you are ready to expand geographically or accelerate growth? You would be familiar with one another.  Your licensees will have experience utilizing your system which would reduce post acquisition “learning curve” costs. Your firm could represent a marvelous exit strategy for hard working Baby Boomers who enjoyed being your licensees.

For more information about achieving synergies between licensing, acquisition, and strategic alliance strategies, go to www.GrowthStrategistShow.com to download my (date) interview with Robert Digby, CEO of PAY CHOICE.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™.   Ambler is wrapping up her 7th year hosting a weekly peer-to-peer-to-peer on line talk show at www.Business.VoiceAmerica.com and www.growthstrategistshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com .      

The “Piggyback” Strategy

It’s funny.  Most business people can see when other businesses have created new revenue streams or new companies by “piggybacking” or “spinning off” but can’t seem to see those opportunities for themselves.

An example of “piggybacking” is probably best illustrated by the stores that surround a major shopping mall.  The Container Store®, Men’s Wearhouse®, Marshalls®, Barnes and Noble® all benefit from close proximity to malls.  Frankly, so does Burger King®. Those companies don’t have to pay the premium price for mall space yet they benefit from the mall’s marketing (and often its parking spaces as well).

One of my favorite examples of piggybacking is a strip shopping center in Cherry Hill, New Jersey that included a bridal shop, a tuxedo rental store, a travel agency, a caterer, and a divorce attorney.

Piggybacking involves observing which noncompeting companies are attracting the customers you want to serve and figuring out how to be there when the customers go there. These days, “there” does not necessarily involve a bricks and mortar physical location.  Hey, there are HR consultants, accountants, and M&A attorneys buying advertising space all around my weekly on line broadcasts and blogs. DUH. They want increased access to executives of midsized companies.

It pays to ask yourself if your marketing is too focused on attracting customers from a cold start. Where does your message need to be so it reaches decision makers when they are already demonstrating an openness to investing time and money, learning and trying related things?

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™.   Ambler is wrapping up her 7th year hosting a weekly peer-to-peer-to-peer on line talk show at www.Business.VoiceAmerica.com and www.growthstrategistshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.    

Persevere, Answer Questions, Do Demonstrations, Create Payment Plans…and Reassure

The extended period of uncertainty following the recent recession continues to raise the cost of doing business.  These days, an experienced sales person expects to explain the value to more people, provide free demonstrations, answer lots of questions, create payment plans, and reassure decision makers.  You might find that reassuring people is becoming the most important step.  Cash is tight. Jobs are at risk.  Few people are willing to take a chance or be an early adopter because they can’t afford to look like a fool.

As a few of my recent blog entries have shared, I have been working on a new economic development initiative that will help midsized companies rebound. When folks see the statistics, hear the approach, and review the business model, anyone who interacts with midsized businesses quickly sees the value and gets excited that it could help the economy. It’s one of those win/win/win models where:

  • the clients pay a little to gain a lot
  • the service providers make a difference, earn some money, and benefit from great marketing
  • the sponsors invest a little and are applauded as visionary leaders

But even something like this has difficulty attracting sponsors.  WHY?

In some corporations, their own bureaucracies are so difficult that a regional President has very little chance to shift priorities for even $15,000. In other corporations, the decision has been made about which nonprofit organizations will receive their support.  Even if/when too little return on investment is resulting from those decisions; it is too difficult to consider a change.  Other corporations say they like innovation, but sponsor only traditional approaches.

The concept I/we have been working on isn’t a traditional 501C3 or 501C6 entity. I have recruited over 50 service providers, and we are determined to launch this initiative in 2012. Like other sales people these days, I have to persevere, answer questions, do demonstrations, create payment plans, and reassure. Interestingly, involving the legal and accounting firms in the sponsorship calls is needed to help reassure corporate executives.

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™. Ambler is wrapping up her 7th year hosting a weekly peer-to-peer-to-peer on line talk show at www.Business.VoiceAmerica.com and www.growthstrategistshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com

What Role Does Loyalty Play in Your Organization?

This will inevitably be one of those blogs where I ask you to think rather than provide a firm answer. It’s just that I’ve noticed some business people getting into trouble with loyalty issues recently.

In one situation, the CEO seems to view loyalty as belonging to him.  In his mind, the board members, the employees, the vendors, the customers are all supposed to be loyal to him. That often means that anyone who disagrees with him isn’t being loyal. A consultant who is paid to provide an objective viewpoint is quickly dismissed if his/her conclusion isn’t that this CEO is always right. He denies that this is true, but it is so obvious to everyone else.

In another organization, the millennial generation employees are not inclined to be loyal to anyone but themselves. They have seen their Baby Boomer parents suddenly let go and their retirement savings reduced when the financial industry imploded. They don’t trust that Social Security will be there for them when they retire. They may like what they do, but loyalty to the company or the employer isn’t even an option.

The CEO of another client organization resists loyalty to him.  He wants people to be loyal to the business, its mission and the results it achieves. He is concerned about where the company would be if loyalty is aimed at him and he is suddenly killed in a car accident or develops prostate cancer like his father did.

Often it is the truly visionary leaders, like Steve Jobs, who can generate loyalty for both them and the company. Nido Quebein seems to be able to spark that dual loyalty (for the CEO and the organization) as the Provost of High Point University in North Carolina. But that is rare these days.  Too many CEOs view themselves as visionary because they enjoy doing new things. But if they are indecisive inconsistent leaders, they will get superficial loyalty from employees and vendors.

Do you know the role loyalty plays in your company?

 

Aldonna R. Ambler, CMC, CSP has earned the right to be called THE GROWTH STRATEGIST™. She has won over 2 dozen national and statewide “entrepreneur of the year” awards for the resilient growth of her international businesses across 4 recessions.  Her midsized BtoB service, technology, and distribution clients get on…and then stay on…the published lists of the fastest growing privately held companies. All of her own service businesses (strategic planning, executive advisory, growth financing, talk show, speaking, search) help privately held midsized companies achieve accelerated growth with sustained profitability™.  Ambler is wrapping up her 7th year hosting a weekly peer-to-peer-to-peer on line talk show at www.Business. VoiceAmerica. com and www.growthstrategistshow.com that features interviews with CEOs/Presidents of midsized companies (typically between $20 and 200 Mil/yr) sharing success tips about the growth strategy-of-the-week. Family owned businesses are being emphasized in 2011. Ambler is in the process of launching her 8th enterprise. She can be reached toll free at 1-888-Aldonna or at Aldonna@AMBLER.com.

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