Platt Perspective on Business and Technology

Online store, online market space – part 23: balancing one-off and recurring sales revenue streams 2

Posted in startups, strategy and planning by Timothy Platt on August 27, 2013

This is the twenty third installment in a series on building an online store as a new business (see Startups and Early Stage Businesses, postings 20 and loosely following for Parts 1-22.)

I began discussing repeat and recurring business in Part 22 of this series, and note that I explicitly defined these terms there, for purposes of this series discussion as:

• Repeat business is in primary part a matter of marketing and of developing positive relationships with customers. When a business reaches out to and connects effectively with its customers, they will prove more likely to come back, and they are more likely to share word of their positive experiences with others too and offer viral marketing support.
• Recurring business is primarily about what is being offered, and in this it is all about asking “what else could I offer my customers that they would see as adding additional value to them?” Recurring business is all about creating value added opportunity and with value in this defined by the customer and the business as a collaboration, and not just by the business.

I stated at the end of Part 22 that I include this discussion in this series and in my Startups and Early Stage Businesses directory, because it is a lot easier to achieve consistent, reliable repeat and recurring business if you build a potential for them into your business organization from its foundations on out – and from its beginning. I said that I would address the issues that arise from that assertion here in this posting, and with a discussion of business models and corporate cultures. And what follows is intended to at least begin that.

• An effective business model, in virtually all cases, begins with a clear understanding of what you would offer to a marketplace and to its consumer members, that could serve as a basis for developing a revenue stream and profitability, and
• An understanding of what your marketplace and your target demographics would consist of, and who would see sufficient value to themselves in what you would offer to bring them to pay for that and at the price point that you would offer it at.
• Everything else in that business model can, in a most fundamental sense, simply be considered the detail framework that you would develop to achieve these goals of providing your products and services, and effectively bringing them to the right market.

Product and service ideas change in the crucible of being turned into marketable offerings and target markets come into focus. This simply means that the business adjusts and comes into focus as it is formed and built out from an initial idea into an organized reality. And I add that with time most businesses at least continue to evolve on an ongoing basis too, to stay relevant to their markets and customers and to remain competitive. But an ongoing commitment to customer satisfaction in creating repeat and recurring business relationships is one business detail that should not change and from the very beginning on. Business adjustment and evolution should be seen in this context, as a way to keep an ongoing customer relationship system a working reality. And this brings me to the issues of corporate cultures.

• I usually define corporate culture in terms of what the people of that community automatically collectively assume.
• This includes automatically assumed values and meanings, and a shared understanding of what is important and even definingly so about the organization and its overall values.
• This posting is about centering that business as a shared basic assumption, around the value of the customer and the customer relationship, and of meeting their needs.

Build your basic business processes in terms of this, and with a conscious awareness of its importance if you want your business long-term to be seen as a source of positive value and marketplace good. Design and build out, market and offer and support your products and services with your customers in mind and with a goal of keeping them engaged and coming back.

When I think of real world examples of businesses that ignore this, I find myself thinking in terms of the In the News examples of Enron, and the financial institutions that contributed to much to creating the Great Recession. But this is not about avoiding becoming infamous as a business; it is about succeeding long-term and of capturing and retaining ongoing market strength from offering products and services that consumers who have a choice, will keep choosing.

My goal for the next installment of this series is at least start to develop a foundation for building this approach into a business model and into its operational and strategic practices and culture. Meanwhile, you can find this series and related postings at Startups and Early Stage Businesses and also at Business Strategy and Operations and its continuation pages Business Strategy and Operations – 2 and Business Strategy and Operations – 3.

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