Disciplined Entrepreneurship Workbook
Page 15
Output: Customers
Total time for sales cycle:
First Draft Sales Funnel Worksheet
Qualitative Summary
1. How would you qualitatively summarize the Process to Acquire a Paying Customer in three sentences or less? ______________________________________________________________________________
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2. Which areas of this process are you comfortable that you have mapped out well? ______________________________________________________________________________
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3. Which areas of this process are you concerned about that you will want to keep an eye on as you proceed? ______________________________________________________________________________
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BONUS TOPIC
Windows of Opportunity and Triggers
This is new material that was not covered in Disciplined Entrepreneurship.
WHAT ARE WINDOWS OF OPPORTUNITY AND TRIGGERS?
A Window of Opportunity is a time period in which your target customer (end user, economic buyer, and/or champion) will be particularly open to considering your offering. A Trigger is a specific action you take within that Window of Opportunity to create an urgency and/or strong incentive for the customer to act.
WHY ARE THEY IMPORTANT AND WHY NOW?
The Process to Acquire a Paying Customer is the foundation of your sales process, but you must understand that your customers are not equally predisposed to buying your product regardless of when you start the sales process. Knowing when your customer is most open to the elements of the acquisition process is an important consideration in effectively and efficiently executing your sales funnel to a successful conclusion.
Know your Windows of Opportunity and take advantage of them with well-designed Triggers—timing is crucial!
PROCESS GUIDE
One of the biggest challenges for any company, especially a startup, is initial customer adoption of their product, which is why you need to spend so much time dissecting that process and improving it. Getting the 1,001st customer after having 1,000 customers may not be easy, but I can assure you that it is almost always much easier than getting the first real customer. In this case, by a “real” customer I mean someone who is not a relative or a friend or a technological enthusiast who will buy one of everything. Instead, a real customer is someone who started with a clean slate and then, because of a customer pain/opportunity, subsequently found out about your product and chose to buy it to solve that customer pain/opportunity.
To get that first customer, you must overcome an enormous amount of inertia because it is significantly easier for the customer to not buy your product and keep doing what he or she is currently doing. The status quo is an extremely powerful force to overcome, especially before a product is widely accepted and people change their purchasing habits accordingly.
There exists a great analogy from physics. Isaac Newton’s first law of motion begins by stating that bodies at rest will remain at rest unless acted upon by an external force. The potential customer is initially at rest and will stay so unless you find a way to start the process. Finding that catalyst to action is often the most important step in the Process to Acquire a Paying Customer—and often the most underrated.
When you start, your customer is like an object at rest. Getting the customer to take the first step toward acquiring your product is the hardest step, so it requires special attention.
Great marketers, especially in consumer markets, have known for a long time about two concepts that will help you crystallize the catalysts to action—Windows of Opportunity and Triggers.1
A Window of Opportunity is a time period in which your target end user, your economic buyer, and/or your champion will be particularly open to considering purchasing your product. Examples of common Windows of Opportunity include:
Seasonality (selling lemonade in summer and Christmas wreaths in winter)
Crisis (e.g., blackout, security breach) or impending potential crisis (e.g., forecast for a storm, the potential Y2K computer bug)
End of fiscal year (extremely relevant for business, but also for some consumers due to taxes)
Budget planning cycle
Life transitions (e.g., graduation, first job, first home, pregnancy)
Change in leadership (e.g., company hires a new chief information officer)
Change in regulation (e.g., enactment of the Affordable Care Act)
Searching the Internet and finding your product (more on this later)
A Window of Opportunity only identifies a time period when you have a much better than normal chance to start the acquisition process, but it does not start the process for you. Now you need to apply that external force to get the customer moving. That is what I call a Trigger.
Triggers are specific actions you take within the Window of Opportunity.
A Trigger is an action you take within the Window of Opportunity to create an urgency and/or strong incentive for the target end user, economic buyer, and/or champion to act, starting the Process to Acquire a Paying Customer. A well-designed Trigger also increases the odds that the customer will make it through your sales funnel and acquire your product. Examples of Triggers include:
A salesperson suddenly appearing, in person, on the phone, or in an online chat interface
Offering a discount that expires after a short period of time
Indications of scarcity of supply
Limited time availability to join a special community
Special offer of additional value to reward quick decision
Clear action that will help you avoid a disaster—such as a security assessment to avoid a devastating cybersecurity breach that just hit a competitor and is making headlines today
These simple concepts apply to almost every product and are extremely well known by all large corporations like Target, Google, Amazon, and Procter and Gamble. Ironically, they are even more important to entrepreneurs, who face more inertia, but these fundamental concepts are generally little known or utilized in this
community. In my work, I have seen that even a well-defined Decision-Making Unit (DMU) and Process to Acquire a Paying Customer can fail if the entrepreneur does not understand their Windows of Opportunity and does not set up effective Triggers against them.
Understanding and utilizing Windows of Opportunity and Triggers help tremendously in kicking off the sales process and getting your customers to buy your product.
GENERAL EXERCISES TO UNDERSTAND CONCEPT
Seasonal example: When is the best Window of Opportunity to sell swimsuits? What Triggers do stores put in place to take advantage of that Window? Can you suggest some other creative Triggers that a store could try? ____________________________________________________________________________________________ ____________________________________________________________________________________________ ____________________________________________________________________________________________
Good examples to be copied: Review the examples in the table on the next two pages and come up with other situations where the same approach could be applied.
Company Window of Opportunity Trigger Comment Where else this approach could be tried
1 Travel website Users come to website and look for price on a specific route, e.g. Boston to London. Highlighted text under the price says “Only 2 seats available at this price.” Extremely effective; scarcity of supply incentivizes action now.
2 Computer company selling high-performance and/or bulk orders of computers and/or computer peripherals (e.g., IBM) End of fiscal year (let’s assume December 31 for this example) when business departments have unspent money in their budget for the year that is just about to end—if they don’t spend the money, their bosses might think they don’t need the money for future years and will cut their budget accordingly. “If you let us know in early November, we will be able to schedule our people to ensure the equipment is installed, invoiced, and paid for well before the year end so you don’t have to stick around over the holidays.” Gets customer to commit to you earlier, before others who would be competing for the same funds. There may still be smaller amounts of money leftover right at year’s end, so you could have another Trigger to capture that, but you have already gotten the lion’s share of the available money.
3 College student supplies company/ service When students first arrive at school—in most places in the United States, this is late August or early September—and they form their buying habits for the academic year. Fliers in dorms advertising giveaways and discounts that are especially attractive to new students. Habits, once formed, are difficult to break, so smart marketers invest in the Window of Opportunity to get consumers’ habits to favor them.
4 Security company A highly visible data breach is in all headlines. Offer to top prospects of a special audit team to assess how exposed the prospect is, and suggest immediate plans to address the exposures. Combines urgency of a crisis with scarcity of resources.
5 Enterprise software company New chief information officer is hired by a prospect. Offer to review inventory of software and produce a report of where company could improve. Regime change is a great Window of Opportunity because often everything gets rethought and new leaders want change.
6 New company that de-ices planes faster and cheaper Right after a storm when flights got backed up and airlines were under extreme pressure because of delays; airline’s customers and executives want a plan so that delays don’t happen again. Salesperson calls and explains the new offering to airlines that had the most cancellations and delays. Having experienced significant pain, customer wants to avoid it next time, so especially open to new solutions.
7 HubSpot A business owner visits HubSpot’s website to learn about inbound marketing and HubSpot products, suggesting they are a good prospect for products that would improve the business owner’s own website. Free website grader tool that gives a numeric grade for the quality of the prospect’s website with a report on what the website does well and areas to improve score—the grader also collects the prospect’s contact information (e.g., e-mail address) to send the follow-up report and grade. With the prospect’s contact information and the knowledge that the prospect is interested in improving their website, HubSpot can follow up and continue to engage with the interested party.
8 Enterprise software company One of your competitors is bought by a big company with a poor track record of customer service and integrating acquisitions into their portfolio. The new big company also has little history or expertise in the new market segment of the acquired company. Offer a special one-time trade-in program so that users of the competitor’s software can acquire your software at a steep discount. Offer free technical support for the transition for the first 20 that sign up. Highlights your stability in a world that just got disrupted and there are new levels of risk.
WORKSHEET
Now use the following worksheet to identify Windows of Opportunity for your product and choose one to focus on. Once you have chosen the Window of Opportunity, develop a spectrum of options of Triggers for that specific Window of Opportunity and choose which one you will focus on first to test for effectiveness.
Windows of Opportunity and Triggers
Window of Opportunity Candidates: What? When? Why?
Who is the Window of Opportunity relevant to?
Champion
End User
Economic Buyer
1 What:
When:
Why:
2 What:
When:
Why:
3 What:
When:
Why:
4 What:
When:
Why:
5 What:
When:
Why:
Which Window of Opportunity will you target first? Why?
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What are potential Triggers for your chosen Window of Opportunity?
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Which of these Triggers will you test first? Why?
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What is a cost-effective and rapid way to test your hypothesis on your chosen Window of Opportunity and Trigger? How will you measure its effectiveness?
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NOTE
1 Charles Duhigg discusses Windows of Opportunity and Triggers extensively (albeit with different names) in his book The Power of Habits, especially when he discusses the success that the superstore Target has had in using product purchase history to predict future purchases. Duhigg profiles one infamous case where Target began sending pregnancy-related advertisements to a teenage girl, prompting the girl’s father to angrily complain to the store manager—only to take it back a few days later when he found out that his daughter was, in fact, pregnant, and Target had figured it out before he had.
STEP 14
Estimate the Total Addressable Market (TAM) Size for Follow-on Markets
WHAT IS STEP 14, ESTIMATE THE TOTAL ADDRESSABLE MARKET (TAM) SIZE FOR FOLLOW-ON MARKETS?
Estimate the annual revenues from the next several markets you can start selling to after you are successful in the Beachhead Marke
t, both by selling the same basic product to other markets and by selling the same customers additional products. This estimate represents the broader market potential.
WHY DO WE DO THIS STEP, AND WHY DO WE DO IT NOW?
This step shows the magnitude of the revenue potential your startup has, which will motivate you to focus on winning your Beachhead Market quickly and effectively so you can branch out into these other markets. It also forces you to raise your line of sight and remember you are creating a business not just for the Beachhead Market segment but for broader impact, which will affect the decisions you make about your business going forward. As the 24 Steps transition from “how does your customer acquire your product” to “how do you make money off your product,” now is an opportune time to take a step back and look at the broader context for your startup.
By the Book: See pages 157–160 of Disciplined Entrepreneurship for basic knowledge on this step.
See pages 161–162 of Disciplined Entrepreneurship for an example of how a company addressed this step.
This step confirms and reminds you that you have bigger plans beyond the Beachhead Market.
PROCESS GUIDE
A Beachhead Market is just that, a beachhead. In World War II, when the Allies landed on the Normandy beaches, they had a very clear plan to secure their beachhead and then to move through western Europe to eventually secure Berlin and everything in between. The goal was not simply to win the beachhead territory.