5 tips to take your business to the next level
By Darla Palmer-Ellingson
A well-designed sales and marketing program can distinguish you from the competition and ties directly to profitability. Companies have varying needs, but a successful plan includes a healthy mix of different forms of marketing, including digital media (website, social media, email), public relations, print and broadcast advertising, printed collateral, trade shows and other special events.
If you are doing all these things and are still lagging behind, consider these factors and ideas for change:
1. Is it time for a branding refresh?
You’ve invested a lot in your company image that identifies and differentiates your brand from the competition. But the fact is, fickle consumers sometimes lose interest in a brand, companies do something to cause customers to drift away or consumers desire change.
McDonald’s provides a good example of a brand metamorphosis that has been evolving for the past decade. When McDonald’s started, it was unique in the market, positioned as providing staple foods in a fun environment. The image declined over time—stores were seen as shabby and food unappealing, while consumer demand for healthier food choices began to rise. The 2004 documentary “Super Size Me,” criticized fast food, specifically McDonald’s, for the extremely low, even harmful, nutritional value. McDonald’s bounced back, evolving its brand, offering healthier food choices—including salads—fresher ingredients and nutritional information on placemats. The décor is also more modern now. The outlet near me has a fireplace, big screen TV and blown glass pendant lights.
While brand successes can be pointed out, so can big fails. Rebranding isn’t simple—it takes research, planning and time. First, you’ll need to dive deep into target demographics and other available analytic data to figure out why your current brand is faltering and make intelligent decisions on how to reconnect or find a new audience. McDonald’s accomplished this by creating new products in an upgraded environment, adding value to a sector of their current audience while attracting new customers.
2. Explore other markets
Most companies keep a close eye on competition, matching and beating prices or services, which can result in narrow and shrinking margins. Breaking away from competition can be achieved by finding new markets for existing brands or creating then dominating an entirely new category for a fresh brand.
Recognizable examples of new category creation include: Airbnb, Uber, Twitter and Tesla Motors. Sure, we had fledgling versions of these concepts previously, but these companies sold us differently. If you examine each of these examples, you’ll find a key to blowing up their respective markets.
Take Airbnb for example, which grew guest arrivals from 21,000 in 2009 to 40 million in 2015. Their lynchpin was creating trust between host property owners and global guests. In 2010, Airbnb started using professional photographers to capture host sites for listings, establishing the trust connection. The meteoric rise was launched.
Other companies have found success in creating new business in the margin between channels. Home Depot evaluated the home improvement market, finding two main avenues for consumers—hiring a contractor or selling tools and equipment to those with some experience. In between is the DIY market, and that is what Home Depot went after very successfully. Look between the lines to differentiate your brand.
3. Are you spending enough on marketing?
The spending question leaves many businesses puzzled, but there is a relatively easy answer. Calculate the cost of acquiring a new customer and determine if that cost is in line with the return you are gaining from sales.
To get your customer acquisition cost (CAC), add how much was spent on marketing over a specific period and divide that by the number of new customers gained in the same period. How much you should spend in CAC depends a lot on your industry. For example, a real estate company may have fewer customers with a larger return, while a retail store may have more customers with lower returns. Also, those that run on leaner budgets can afford to spend more on CAC.
Another consideration is the long-term value (LTV) of the newly acquired customer, depending on expectation of repeat business. Your costs are significantly lower on customers you already have. Some companies initial CAC are at break even, assuming repeat business will bring higher profits.
It’s tempting to cut marketing costs when profits are down, but it is counterintuitive to save your way to profitability.
4. Provide expertise and collaboration
People don’t want to be sold to—or at least they don’t want to think they’re being sold to. Collaborative sales efforts, creating opportunities to speak at conferences, writing articles for print and using internet blog posts and videos positions marketing personnel as experts providing advice rather than making the big pitch.
Just make sure to include a strong call to action on each piece. For example, a blog article could include a free e-book, providing tips and information on a related subject, in which you would have an opportunity to present your product or service. Once downloaded, you have contact information for an interested potential customer.
5. Review how your people are selling your business
In March of 2017, Wells Fargo agreed to pay $110 million to settle a lawsuit filed by customers challenging its opening of accounts without their permission. The bank got into hot water because branch workers, under extreme pressure to meet sales quotas, opened unauthorized accounts and forged signatures. This might be an extreme example, but changing from commissions to a profit sharing compensation model creates a team effort where success can be tied to customer satisfaction rather than specific sales, avoiding fraudulent pitfalls.
Imagine your business in each of these scenarios and evaluate the benefits of making changes to your sales and marketing approach to increase profitability.