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Back from your future 31 October, 2013

Posted by varoom in Marketing Plans, Strategy.
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Most early stage companies manage their business looking forward perhaps a year sometimes longer. This can sometimes cause an effect I call “Horizon planning” that is only working towards the business level you can safely see in the future. If you just aim for the business level can safely see you will only ever reach your visible horizon. What early stage companies should do is look beyond their business horizon into the future to define a business goal and work backwards from that goal to see if they are doing the right things today so that the business will achieve the future goal.

For example, let’s say, that your long range goal is to be ten times the size in five years. In year five you should be able to estimate how many customers you need to be serving to reach that business level, how many products will be sold and at what price point would they need to be achieving. From this 5th year view work back and estimate what shape the business needs to be in year 4 to make year five achievable in terms of customers/products/prices and for each year do the same until you return to the current year. Then you put on top of that your best estimates of success rates of turning customer leads into paying customers and then map in the cycle time you should need to turn a lead into a paying customer. If that meant that in order to reach 1,000 customers in year 5 you need to market to 1Million potential customers you can then see what kind of marketing program you must deploy in each year to reach out to enough potential customers that generates enough paying customers.

When this is done you often find that the marketing campaigns, branding strategies, and product roadmaps being envisaged today do not generate the size of potential business needed to allow growth to reach the finale goals.

The choice then has to be made: Either change the 5 year business goal as it appears unrealistic or substantially change the marketing strategy so that it generates the right size of customer base.