We are asking what is strategy. I don’t know. Strategy is not the same as vision. It’s not the same as a plan. It’s not even the same as a goal.
A Strategy is a Framework!
A strategy is a framework for making decisions. That’s the purpose of strategy: to help make decisions. And if you don’t have a strategy in place, it makes decision-making almost impossible. Loads of businesses don’t get the traction that they need. They don’t achieve the results that they want because they don’t have a mechanism to help them make the tough decisions. Instead, they try to do everything. They spread their resources across multiple fronts, and they don’t get traction.
So, What is Strategy? Should Answer!
The first thing that a strategy needs to identify is who your ideal customer is. We’re not talking about a broad target market. We’re talking about getting very, very clear on the specific type of ideal customer for your business. The clue from this usually comes from your best customers. The ones that are easiest to serve, that you make decent money off of the ones that you really understand and you can deliver efficiently. Your ideal customer is the start of your strategy. And the reason for that is that what those customers value, the things that are important to them, should shape almost every single other decision in your strategy framework.
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Strategy should be about helping you understand what your value proposition is!
Strategy is all about helping you understand what your value proposition is. Why customers should choose you. What value do they get from working with you instead of somebody else? Too many businesses try to spread themselves too thin on the value proposition front. Like butter scraped over too much bread. They try to be the cheapest and the fastest and the best performing and the most technical. That is not possible. And more importantly, once you are clear on your ideal customer profile, you can then understand what those customers are willing to pay for and what they are not willing to pay for. So many businesses spend time and money on things that don’t matter to their ideal customers. They are wasting energy in those spaces, and as a result, they are under-resourcing or not focusing enough on the things that really matter to those customers.
Your value proposition is there to help your customers understand all of the different things that they get from doing business with you. If that value proposition is diluted or unclear, it makes it more difficult for your customers to choose you over your competitors.
Your Strategy Should Guide the Way That You Sell Your Products
Your strategy should guide the way that you sell your products, the way that you package your products, and the way that you price your products and services. It’s about understanding what’s important to your customers. Your customers, in my view, don’t care if you’re different. They care if you are relevant. So, strategy should help you make better decisions about what’s important to them, what’s relevant to your customers. It’s about how they want to be sold to. It’s about the kinds of products and services that they want from you. It’s about the service and the technical expertise. It’s about what level they want from someone like you. If you’re not clear on your ideal customer profile, if you don’t know what’s important to them, it makes all of those decisions frankly.
And that’s why those businesses that don’t get the results that they want, stall because they aren’t clear on how to make those decision,s because they’re having team meetings instead and discussing it there, or they’re having brainstorming sessions instead of actually going back to the heart of the business and trying to understand what’s important to the customer.
Your Strategy is All About Making Decisions
Your strategy is all about making decisions. And if your strategy doesn’t force trade-offs, if your strategy doesn’t show you clearly what to ignore, what not to pay any attention to, what not to put resources into, then it is not a strategy. The clue as to whether you have a real strategy is whether it comes out time and time again when a decision needs to be made. It is so much easier when you’re trying to make a decision on what new sales channel you want to focus on, or how you’re going to sell or what pricing you should do or what new products you should bring on board, or what innovation you should focus on. It is so much easier to make all of those decisions when you can look at it in the context of your strategy.
Now, does that mean that the strategy is perfect? Does it mean that it’s easy? No, of course not. But that does not water down the importance of it.
The juice is worth the squeeze. It’s worth taking the effort to put the work into figuring out what your strategy is. It will need to be reviewed. Things can change, but you need a starting point, and you need to get the stuff working properly if you’re trying to grow your business. Sometimes growth feels sluggish,h and it’s hard because you are growing with the wrong types of customers in the wrong way. Strategy fixes that problem. Sometimes businesses are trying to do too much with too little. The strategy fixes that problem by showing you what you should focus on and keeping it narrow and tight.
Oh yeah. Businesses that have a strategy are more likely to succeed. Businesses that have a strategy are more likely to be profitable. And businesses that have a strategy are more likely to be relevant and therefore to have long-term results.
If you want to grow your business, get clear on your strategy and use it every single day.
See you next time on “Mind Your Own Business”.
