DM STRATEGY OVERVIEW

OVERVIEW

DM STRATEGY (DMS) is about increasing growth and income.  That requires that businesses increase sales.  Every branch and element of the profession – whether recruiting, incubators, Main Street revitalization, urban renewal, brownfield redevelopment, workforce development or entrepreneurial development – every activity depends on increased sales in a company.

DM STRATEGYfinds high probability sales calls which convert into increased sales for Stage 2 companies.  

WHAT IS DM STRATEGY?

It is much different than traditional marketing.  First, we'll explain of some basic ideas and then a description of three marketing channels.


FOUNDATIONAL PRINCIPLES

There are several ideas that combine to form the marketing approach used by DM STRATEGY and they are generally based upon the proven principles developed by the National Center for Economic Gardening.

 

These include:

  • Purchase decisions go through 4 steps

  1. Motivation

  2. Investigation

  3. Evaluation

  4. Selection

  • This creates a sales window.

  • Old economy marketing focused on step 1 and 4

  • DMS finds existing motivation and then focuses on step 2 and 3.

  • Motivation is typically a function of “change.”  We look for signals of change in

    • markets  (ripe markets)

    •  companies  (in the market)

Change and Stability
DMS also believes it  is more difficult to make sales in stable environments. 

In stable environments, the thinking is “Our equipment or software is working, we know the guy and like him and the company is responsive to our requests.  If I propose that we change that situation, then I have to convince my boss to leave something that is working for something that is unknown.  I have to get budget approval and if it fails, it is a career risk for me.”  Sales in stable environments is hard.

When something changes in the company or environment, however, motivation is often created.  Maybe the target company is going through a merger/acquisition, or a new CEO was hired.  Maybe there was a product failure and lawsuit or some regulatory problem.  Or maybe the company invented a new product, received new investment or is moving to a new space.  We track over 25 categories of change, but the point is that when you see change happening, there is a good probability that motivation has been created.  Thus, step one in the purchase decision has already occurred, and the potential customer is in the second stage: investigation. The sales window has opened.

Even though we can develop a profile of who we are looking for and create a universal list of all the companies in that profile, most of those companies are not in the market.  Your sales people can make motivational pitches, but they will be low probability sales calls.  At any given time, only a few companies have motivation to buy.  STRATEGY Rx job is to find them in order to make high probability sales calls.

To summarize,  if motivation is the first step in buying something, and motivation is created by change, then being able to spot change gets us inside the sales window and dramatically increases the probability of making a sale.  This is the heart of SRx.

Companies in the Market
Besides change in markets, the second factor of a high probability sales call is finding change in companies.  In other words, who is in the market on this particular day.  These customers already have motivation established -- something happened which launched them into the purchase decision process.  In effect, a sales window has opened up as the motivation has been established and the investigation stage has started.  The objective for STRATEGY Rx clients  is to be in the marketing channel where the customer is investigating options.  When this happens, the company is  now in front of a high probability target in a ripe market and they now can make the case they have the best option.


Traditional Cold Calling
The process used in the traditional cold call was focused on step 1 and 4 -- create a motivation and close a deal, skipping step 2 (other choices) and step 3 (which is best). 

 

The drawback to this approach is that most companies have no internal motivation to buy and creating motivation is very hard.  As a result, most of the cold calls were low probability, and so it became strictly a numbers game.  If the sales person averages 2 sales out of 100 cold calls every month, then that became the sales goal:  make 100 cold calls every month to get two sales. 

   For 2nd

     Stage

Growth Companies

Our strategies are focused on 2nd Stage Growth Oriented Companies.  

  • Privately-held

  • 10-99 employees

  • 1-50 Million in revenue

  • Includes high growth, high potential

  • Past startup - with proven model

  • Intent and capacity for growth

The Purchase Decision
HQ Strategy believes that almost all purchase decisions have four steps, regardless of the item being purchased. 

First, you have a reason to buy something (motivation).  You then look at the options to choose from (investigation).  You then figure out which is the best option (evaluation).  Finally, you choose one and make the purchase (selection).

 

 This process tends to be formal in business-to-business  companies and more intuitive in business-to-consumer purchases. 

To summarize:

  1. Motivation 

  2. Investigation

  3. Evaluation

  4. Selection

This process can be considered the sales window – a window that opens when there is some motivation and closes when the purchase is made. 

 

Contacting the potential customer in this window is a high probability sales call

 

Outside the window is a low probability sales call.

Ripe Markets
Combining  these two ideas – purchase decisions start with motivation, and motivation is caused by some change --  HQ Strategy looks for change in two areas: markets and companies. 

 

Markets in which change is occurring are considered ripe markets. Ripe markets are typically, emerging,  growing, disrupted and/or unconsolidated.  No one dominates yet. Everyone has gone back to ground zero, competing to be the best solution.

Markets which are not ripe for new competition are mature, consolidated, commoditized and have market shares sorted out. Usually there are three or four major competitors who control 80% or more of the market (giants in the land).  They dominate advertising, marketing and distribution channels and the relationships. They also have well developed and efficient processes that drive down costs and prices

A  mature, consolidated market influences the core strategy of new competitors by forcing them into commodity quadrant, where the rules for success are low price and high volume.

 

Small companies trying to compete in these markets are like Little League  teams walking into Yankee Stadium. Unless they have some technology or process that can enter and disrupt from the bottom end, they are not likely to grow or succeed. It is a low probability sales environment.