Carrie Rich is the co-founder and CEO of The Global Good Fund. She’s also an adjunct faculty member at the George Washington University School of Nursing and the author of Sustainability for Healthcare Management.
Imagine you're launching a new business venture. You're strapped for cash and don't have an existing customer base. What steps can you take to increase your chances for success, especially when the odds are stacked against you?
I recently asked myself this question at The Global Good Fund, an organization in transition from being donor-driven to a financially sustainable social enterprise. We are achieving this aim by selling the leadership development products we developed and implemented through our flagship Fellowship Program to the public.
While we remain committed to the nonprofit and social good sector, we are also responding to interest from corporate audiences. HR departments and mid-level management from corporations, local businesses, higher education institutions and multinational nonprofits have expressed interest in or have already purchased our new online products and services. Not wanting to leave money on the table, I found myself scratching my head wondering, "How do we effectively shift our sales approach to reflect expansion into new markets?"
I asked for perspective from our advisors, including Joe Steensma, our enterprise's Scholar-in-Residence and a Professor at the Brown School of Washington University in St. Louis. Here was Joe's advice on the first two steps a company must take when selling to a new market:
1. Partner with companies that already have audiences in the market.
The most strategic sales tactic is to partner with businesses that already have access to the market you are targeting. Corner the market based on who you want to partner with and the end users to whom you want access.
For example, Joe used to own Industrial Solutions Group (ISG), a risk management firm. A time came when Joe wanted to grow his business quickly yet organically. He sought out companies in the same sector to partner, but ones that were not doing the exact same things as his firm. One such partner, Concentra, stands out as an example. Concentra was much larger than ISG, but lacked the ability to offer the services ISG could offer — services Concentra customers needed. ISG provided value to Concentra by expanding its portfolio of services without capital or fixed costs. In return, Concentra expanded ISG's customer base and credibility in a market sector that was new for Joe's business. Joe gave up a little bit on margin, but it was more than offset by the new customers ISG benefited from.
In order to effectively partner with other businesses, you first need to determine what is mutually beneficial for both parties to ensure it's the best use of time and money for each entity. Going into a partnership, you need to provide value and a financial incentive to your target partner company. An example of this tactic could be offering a service that your potential partner doesn't already have that would complement their existing services.
For The Global Good Fund, there are leadership development services for nonprofits and corporates, but for social entrepreneurs and corporate leaders who care about social impact, leadership services don't currently exist — that's where we come in. Our goal is to find partners who serve the corporate marketplace and for whom The Global Good Fund provides value to their business.
Just remember to not sell yourself short in a partnership arrangement, especially when it comes to your brand. Be thoughtful about vetting partners who do the sales on your behalf. For example, at The Global Good Fund, we are pursuing white labeling products with our partners, which gives our partners the opportunity to private label our online leadership development tools and services, while we maintain the intellectual property.
2. Price your services appropriately.
Joe's mentor once told him, “If you want to quadruple your revenue, double your prices.” When Joe relayed this advice to our team, my first reaction was one of doubt. Thinking this way for a business seemed disingenuous. As Joe and I discussed this concept further, however, it made more sense to me, though I admit to not being fully comfortable yet with the idea.
The reality is that brands that price themselves cheaply often set the tone to consumers that they are, well, cheap. By pricing yourself fairly and adequately in a new (or fragmented) market, you demonstrate to your customers that you are a reputable brand that is worth paying more for. Pricing yourself at a higher tier elevates your brand and your product — just think of companies like Bose, Vera Bradley, and so many others that stand out as premium companies in their industries.
In my women’s governance training class last year, I had the privilege to witness a presentation by Janet Hill, a Board member of Wendy's International and owner of Alexander & Associates (from 1981 until her retirement in 2010), a management consulting business in Washington, D.C. In her presentation, Janet discussed how her customers value Alexander & Associates’ business services because, in part, they paid meaningfully for them. Janet advised, "To truly succeed in a market, you have to be bold and value yourself accordingly. Offer a differentiated product or service that solves a real need in the space — and charge for it."
You can apply this same thinking to any business model. For us, while the sales and price of our new products will be a continuous learning curve for The Global Good Fund, but I look forward to this next chapter in our business.