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4Qs decision-making framework

Should you serve enterprise or small business? Try this decision-making framework.

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Should I serve SMB or enterprise customers? Which is better?

A decision-making framework like the 4Qs can help make a comparison πŸ”Β  of the two profiles easier.Β Deciding who to serve without a decision-making framework is like deciding the fate of the business on a 🀞 coin toss. The outcome of many other decisions, and indeed the fate of the business could rest upon this single decision.

A decision-making framework can reduce procrastination and help the business owner or sales team confidently evaluate the two profiles, based on nine simple data points.

4Qs decision-making framework

Quick sanity check

With limited resources, who will you serve πŸ™ŒΒ  today, tomorrow, and never serve? Before trying to answer, there are a few things you should know.

Firstly, enterprise decision-makers and small business owners are two ✌ divergent profiles. Our research shows you can create a small business customer in 10-15 interactions. If you are serving enterprise decision-makers, you need to support from 25 up to 50 interactions.

Secondly, an organization is unlikely to have enough capital to serve both. It makes sense for your organization to serve enterprise decision-makers today and serve small business owners tomorrow. Or vice versa.

Try to serve both profiles today and risk serving neither

Lastly, I’d like to point out that small businesses don’t buy. Small business owners buy ☝. The same applies to the enterprise. There are enterprise decision-makers, but the enterprise as an entity does not buy. In my experience, it is better to skew profiling towards decision-makers and place less emphasis on company size and sector.

Enter the 4Qs

I would like to introduce a decision-making framework called the 4Qs. The 4Qs is a decision-making framework designed to help founders and sales teams πŸ† scale a business.

The 4Qs are short for Four Quadrants. TheΒ decision-making framework encourages users to β€˜play’ πŸ•Ή or β€˜fit one quadrant with another. Although all four quadrants are distinct, each quadrant is interdependent. A decision made in one quadrant will present decisions to be made in one or more other quadrants.

Quadrant 1 addresses whom we serve. The remaining three Quadrants deal with what we are serving the customer, what we share in common with the customer, and how we serve the customer.

4Qs framework operational excellence

get to predictable revenue quicker

Deciding which profile to serve is necessary for striking a Quadrant 1-2 fit. When an organization strikes a Quadrant 1-2 fit, it creates value ✨ for customers and makes revenue for the business. The quicker your organization strikes a Quadrant 1-2 fit, the faster they reach predictable revenue.

The 4Qs decision-making framework can be used to make other types of decisions such as a

quadrant 1-3 fit

quadrant 2-3 fit

quadrant 3-4 fit

4Qs_Quadrant-1-2-fit

Price is not the only factor

Many business owners decide who to serve based on the ticket price of their product. They decide to serve today customers who are prepared to pay more, without considering πŸ‘Ž the associated costs of serving this profile.

While price is a useful data point, it is not the sole data point for making this decision

We would like to table another nine data points worth discussing with your sales team before making this decision. Many of these you are familiar with like buying personas. However, I am willing to wager a small sum that you have not come across 😲 customer expiry and buying triggers.

Customer expiry is the length of time a customer consciously or unconsciously allocates to making a buying decision. Every customer’s buying decision has πŸ’₯ an expiry. If the buying decision is not closed in the time frame, the customer is likely to drop off and abandon their buying decision. If your customer expires in 90 days, and you design a sales process that creates a customer in 15 days, bad news. You are out of the race.

A buying trigger πŸ”« is an event that drives a customer to make a buying decision. Back to school is a trigger for parents to buy stationery for their children. The end of the financial year is a trigger for customers to switch accounting firms. If the date a buying trigger can be predicted, the salesperson has an advantage.

These two data points πŸ’ͺ could collectively influence 80% of your decision

9 simple data points

Assess each of the nine data points. Try to come up with an answer for each based on your discussion πŸ’¬Β  with customers. We have offered answers to each based on our intel. Your answers will differ from ours.

Let’s explore each in turn.

#1 HOMOGENEITY

Unlike small businesses, enterprise organizations are far less likely to exhibit similarities between one another. A common complaint πŸ˜“Β  from business owners who decide to serve enterprise, is they end up creating a different version of their business to serve each enterprise customer.Β 

Despite enterprise organizations sharing a similar sector like logistics, because their businesses are so large with many kinds of legacy systems, each is its own customer profile.

The more dissimilar each profile, the more variants you will have to manage in Quadrant 1

  • πŸŽ™οΈ

  • β€˜We want the same thing – productivity.’
    SMALL-BUSINESS OWNER
  • πŸŽ™οΈ

  • β€˜We belong to different verticals with different needs and different legacy systems.’
    ENTERPRISE DECISION-MAKER

#2 SOPHISTICATION

Small business owners are often immature, never having experienced a product category before. So they may have few objections because they have no experience buying your product before. For enterprise decision-makers, this may be the fourth or fifth time they have bought this type of product.

They often feel like they know more πŸ“š about the product category and may request vast customization not available. Rather than purchase what you have in the warehouse, their decision-makers may be more inclined to have to build something from scratch.

Unsophisticated buyers from Quadrant 1 can make buying from Quadrant 2 easier because they have less experience

  • πŸŽ™οΈ

  • β€˜If that’s what I need, let’s do it.’
    SMALL-BUSINESS OWNER
  • πŸŽ™οΈ

  • β€˜We will show you how you should have built your product.’
    ENTERPRISE DECISION-MAKER

#3 EXPECTATION

Small business owners do not have time to interrogate your business. Many of them will refuse to meet in-person because they are busy juggling many roles and cannot afford the travel time. Small business owners will hand you their trust ❀️ quicker, allowing you to get on with serving them.

Enterprise decision-makers have many boxes to tick before they will grant you their trust. Each decision-maker will want to βœ…Β  test and measure your organization. They are more likely to request RFPs, proposals, cost schedules, and meetings at their offices.

The more interactions required to create a customer, the harder it is to strike a Quadrant 1-4 fit. Quadrant 4 dictates how your organization serves a customer.

  • πŸŽ™οΈ

  • β€˜I will make a decision after two phone calls together.’
    SMALL-BUSINESS OWNER
  • πŸŽ™οΈ

  • β€˜We want a proposal, lots of meetings, and a bunch of changes to the product.’
    ENTERPRISE DECISION-MAKER

#4 BUYING PERSONAS

It is important to understand that small businesses and enterprises β›”Β  don’t buy. It is the small business owners and enterprise decision-makers who buy. In an enterprise organization, there could be multiple stakeholders involved in a buying decision. Influencers, users, and buyers to name a few.

In a small business, nine times out of ten, the decision rests solely πŸ‘Β  with a managing director or owner.

The more buying personas you need to manage in Quadrant 1, the harder it will be to strike a Quadrant 1-2 fit

  • πŸŽ™οΈ

  • β€˜It is just me.’
    SMALL-BUSINESS OWNER
  • πŸŽ™οΈ

  • β€˜You need to convince me, my boss, his boss, and the board.’
    ENTERPRISE DECISION-MAKER

#5 VALUE

Does your organization provide a must-have or a nice-to-have product? Organizations that are valuable are harder to substitute later βœ‚οΈΒ  for a competitor. To become a must-have product for an enterprise organization is difficult because enterprise businesses have many departments. To be a must-have, you will need to improve not one but many departments.

Creating value for a small business owner is easier and requires less capital raising because their businesses are flatter.

The more value you create for a customer profile, the stronger your Quadrant 1-2 fit

  • πŸŽ™οΈ

  • β€˜You guys are mission-critical. My entire business runs on you.’
    SMALL-BUSINESS OWNER
  • πŸŽ™οΈ

  • β€˜You’re a nice-to-have. We could buy you.’
    ENTERPRISE DECISION-MAKER

#6 INTELLIGENCE GATHERING

Your organization cannot succeed if you serve customers who give you open and honest feedback. When an enterprise decision-maker tells you β€˜we will get back to you’, πŸ“£Β  what they really mean is, β€˜I’ll never tell you what I really think’. Your organization is often a pawn in a political and power struggle. Small business owners only have their time to lose by giving you feedback.

The more intel you gather and act upon, the faster you can iterate each Quadrant

  • πŸŽ™οΈ

  • β€˜I’ll tell you all our pain points right now.’
    SMALL-BUSINESS OWNER
  • πŸŽ™οΈ

  • β€˜We’ll get back to you.’
    ENTERPRISE DECISION-MAKER

#7 PRICE SENSITIVITY

Decision-makers take on very different behaviors when they are personally paying for a product or service from their own money. Even though it is a business cost, your fees eat πŸ‘ŽΒ  into their profit, which affects how much money they can take home that week.

That’s why small business owners are likely to be price-sensitive compared to enterprise decision-makers.

Free trials and discounts are likely to appeal to this group but are less likely to appeal to enterprise decision-makers. In fact, the internal costs πŸ””Β  for an enterprise organization to switch to your product may be higher than the price you are asking them to pay, meaning price is not part of their decision-making.

Price is a friction point for customer profiles that are price-sensitive

  • πŸŽ™οΈ

  • β€˜Hey. This is coming out of my own pocket.’
    SMALL-BUSINESS OWNER
  • πŸŽ™οΈ

  • β€˜We are used to paying through the nose.’
    ENTERPRISE DECISION-MAKER

#8 CUSTOMER EXPIRY

I have personally witnessed small-business owners expire in less than two hours. They begin researching a product at 7pm once they close trading, and by 9pm, they have made up their minds. A similar product from the same product category could take an enterprise decision-maker 🧨  90 days or longer before they expire.

Even though it can be more difficult to serve customers who πŸ’₯Β  expire quickly, serving this customer means less chance of revenue lag. Revenue lag is the distance between when you predict to get the cash into the bank account and the actual date the cash arrives.

The longer the customer expiry, the more interactions you manage in Quadrant 4, and the greater the chance of introducing friction

#9 BUY TRIGGERS

Knowing the buying trigger πŸ”«Β  makes predicting revenue easier. In other words, it’s like having the money already in the bank. You don’t need to concern yourself with drip campaigns and hit and miss telephone calls. All you have to do is stand at the intersection where the decision will take place, and you have good odds of closing the sale.

Under normal circumstances, it is easier to discover what triggers a πŸ˜‡Β  small business owner to make a buying decision over an enterprise decision-maker. Enterprise decision-makers are less transparent.

Buying triggers is an important data point to track in Quadrant 1

  • πŸŽ™οΈ

  • β€˜I have two projects to talk about right now.’
    SMALL-BUSINESS OWNER
  • πŸŽ™οΈ

  • β€˜When the boss comes to town.’
    ENTERPRISE DECISION-MAKER

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Key takeaways

decide who you serve using a decision-making framework

deciding who you serve will affect other decision made by the business

create two pipelines - who you serve today and who you serve tomorrow

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Anthony has two decades of experience consulting to marketplace and software-as-service startups. Brands include salesforce.com, Google, SAP, and IBM. He specializes in designing sales systems and is the author of the book run_frictionless: how to free a founder from a sales role. He has consulted to startups from the United Kingdom, Korea, Singapore, Philippines, and Australia. Anthony has been a founder of two startups. When he’s not working, Anthony enjoys racing sports bikes and sailing boats.

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