The 5 Pillars of your brands business model

The 5 Pillars of your brands business model

A marketing firm in Atlanta, Syrup Marketing, recently wrote a great article about how your brand is the “lead domino,” to quote Tim Ferris. What that means is that, once you create and solidify your brand, everything else tends to fall into place easily. One of those other dominoes that fall into place after you’ve created a fantastic branding strategy is the actual nuts and bolts of your business model.

Any business model is made up of many different moving parts, but they can be boiled down to these five pillars, on which you should build your business.

1. Marketing channel(s).

Your marketing channels are the means, the media, through which you reach your most valuable prospects in order to bring them into your marketing funnel, and then nurture them through the funnel until they become paying customers. You define your marketing channels by starting with one very clear question: where are our best customers? That’s a broad question, but it becomes very clear when you use the old “market” analogy. Prior to industrialization, agrarian economy farmers brought their crops quite literally to the market. They set up where their best customers would be. Where are your best customers most apt to make a purchase of a product or service like yours? Go there. How do you get there? That is your marketing channel.

2. Distribution.

Most tech startups these days simply ignore the term “distribution” because it’s seen as the old school term for truck and train deliveries, but that assumption is a mistake. No matter what you sell – product or service or software – it must be delivered in some form or fashion to the end-user. THAT is what we call distribution. Guy Kawasaki famously said, “God gave us e-commerce, so you can sell direct and reap better margins.” Translated, that means you can distribute your work directly, rather than having to sell it through Wal-Mart or Amazon. Think about the mechanics of how you actually deliver your product, even if it’s SaaS. That requires thinking through sales, purchasing, approval, installation (if applicable), user setup, onboarding, and – finally! – user success. How will you distribute your product or service?

3. Sales cycle.

How long it takes to get one prospect from “Hey, never heard of that” to “OMG! Your widget has saved me hours every week!” is your sales cycle. Largely determined by the industry in which you serve, knowing and understanding your sales cycle is a huge piece of the puzzle of how you predict your future revenue and earnings. If you go into a business venture thinking the sales cycle will be 30-60 days and it turns out to be 90-120 days, then many things will change at your business, the first of which will be cash flow. In order to get a better idea of your anticipated sales cycle, it’s a good idea to start with a friendly prospect or customer and have the purchasing mechanics conversation, or “How does your company purchase products or services like ours?” Businesses buy everything from chairs to software to headphones to insurance. Each purchase process is slightly different. Where does your product or service fit?

4. Lifetime Value (LTV) of the customer.

How much income – not revenue, but income – will you make by selling your product or service to your best, most loyal customer during the entire time they are your customer? Until you understand (a) that there is such value and (b) how to accurately calculate it, it will be difficult to build a long-term sustainable business. For example, if you run a fruit stand in rural Pennsylvania, and a mother of 3 stops to buy a basket of fruit from you, and you sell it to her for $15, how much income have you made? Here’s the math: $15 minus the cost of the fruit, apples, your physical fruit stand, your time, and taxes. That’s fairly clear. But what is the LTV of that mom as a customer of yours? If you’re rude and your fruit is substandard, then it might be the $4-$5 you just earned. However, if you are kind, polite, and serve a great basket of fruit with a handwritten note inside the basket that gives this lady a little incentive to return each week, then her LTV skyrockets. What would make you do the things stated in the previous sentence? Your brand. Your brand, which comes first, is a large factor in determining the LTV of your customers.

5. Support requirements.

In the old school software world, when we used waterfall development technique because we’d update the software a few times each year, we also had tech support teams to make sure customers knew how to use it, and that bugs, glitches, and poor UX were captured, reported, and put into the next development cycle. The world has changed, but the fact that customers use your product and your product are never, ever “finished” means that you must support your product. For a fruit stand, that means giving a refund when a few of the peaches were really soft or having a simple website with when you’ll be open and what fruits are in season. For a SaaS business, that means onboarding each customer, maintaining great customer relationships that reveal bugs, glitches, and poor UX. What is required to support your product or service?

Everything starts with your brand. After agreeing on your brand, the business model – how you sustain the full and complete value proposition to your customers – is built upon that brand, using these five pillars. Everything else you do, as it relates to how you deliver your product or service, grows out of these five basic points.


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