Date post: | 03-Aug-2015 |
Category: |
Business |
Upload: | sam-mallikarjunan |
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“We don’t make money when we sell things. We make money when we help customers make purchase decisions.” – Jeff Bezos
Disruptor Disruptee
Personal computers Mainframe and mini computers
Mini mills Integrated steel mills
Cellular phones Fixed line telephony
Community colleges Four-year colleges
Discount retailers Full-service department stores
Retail medical clinics
Phonographs
Traditional doctor’s offices
Pianos
Some examples of disruptive innovation include:
Examples of Disruptive Innovations
1877• Edison
invents the phonograph
1905• 400,000
pianos produced
1914
• $56M
1919• $158M
1944• Steinway
produces caskets with excess wood
Just because your company has survived the last 100 years doesn’t mean it will survive the next ten.
Your extendable core is the job you do
for customers that a competitor
couldn’t replicate without adopting the
same cost-structure.
An Extendable Core Insulates You From Disruption
Inbound marketing is a business model innovation based on the fact that it’s more economically efficient to create an experience that attracts consumers than it is to interrupt someone else’s.
“I’m spending a bunch of money on
marketing, and I’m making more money
than I’m spending back.”
The Old Marketing Math Model
Expense Yearly Amount
PPC $50,000
SEO Firm $6,000
Content Writing
$60,000
• “I spend $W to acquire customer of persona X from source Y, and they spend an average of $Z with me over their lifetime.”
• Customer Centric Economics Model
Starbucks has an AOV of ~$6*
Using the AOV:COTA model, to get a 3:1 ratio a
Starbucks marketer would spend ~$2 to acquire
that $6 transaction.
How Much Would You Spend?
*
*Source: KissMetrics
Key Takeaway: Compete in the Research Phase
C = # of new customers, D = # of downloads, V = Average LTV
Yes. I downloaded their eBook.Yes. They helped me make a decision.Yes. I bought from them.
This new age of marketing is the beginning of something truly remarkable, and your relationship with your customers will never be the same.