Yes, it’s a tough economy. Yes, the news is still gloom and doom. Yes, the unemployment rate is high. Yes, consumer and businesses alike are spending less.
But guess what?
Yes, over 85% of the population IS employed. Yes, the stock market is starting to rebound. Yes, people are spending money on items that they perceive of VALUE.
AND, THERE ARE BUSINESSES THAT ARE HAVING THE BEST YEAR OF THEIR EXISTENCE!
Amist all of this negativity, there are SMART, practical business people who are doing well. While they aren’t shouting this from the rooftops for fear of being labeled among other things, a braggart, the fact is thatSMART business people have protected their businesses by budgeting wisely, keeping a close eye on expenses, identifying new target markets, holding employees accountable for their areas of responsibility, focusing the entire organization on taking care of their customers, and adapting to market change.
The SMART ones are investing. Yes, investing. They are investing in marketing. How on earth can you expect people to buy from you, if you don’t communicate with them?
For the B-to-C companies, it’s relatively easy. Identify your existing and target markets, develop a plan AND a message, and move forward.
While it’s a little trickier for the B-to-B crowd and requires more planning, it can and IS being done.
It’s not just about having a sales guy or gal beating the streets.
It’s about keeping your company top of mind and front of wallet.
You do that through marketing :
Exposure → recognition → leads = $ales
Advertise. Advertise. Advertise. Your first reaction in a slow economy might be to cut back on advertising, but can you really afford to go unnoticed? Don’t abandon your marketing efforts. Instead, look for ways to get more bang for your buck. Your printer can offer cost-saving approaches for marketing pieces and direct mail and might match competitors’ rates. Radio, print, and TV sales representatives may be more willing to negotiate prices for frequency. Try alternative online marketing channels such as email marketing, blogs, and mobile advertising. Deliver presentations to community business or social groups, or arrange to offer an adult education class at a secondary school or local college for free or a small fee. Speaking can be a great way to build business recognition, establish credibility, and show your community how much you know.
Review your budget.Keep on top of your expenses. If money is tight, it’s time to cut non-essential expenses from your budget in order to ensure you have the funds necessary to pay the utility bills, make smart inventory purchases, or buy that necessary software update. If you need to expand your advertising to woo more customers, look for other areas in which to make budget cuts to free up the necessary funds. If you do have extra capital available, this may be a great time to expand your business and divert extra funds into new endeavors or a new niche to gain a competitive edge. Since other businesses may be offering deeper discounts to increase sales, it may be the right time to make a major expenditure that will help you to pull ahead of your competition in the long run. And make sure your staff with spending authority know the plan and your priorities.
Keep on top of accounts receivable and payable.Losing track of invoices? Make sure your 30-day terms are not being stretched out to 45 days or longer. Set limits on the amount of credit (if any) you are willing to extend a non-paying or new customer. Pay your bills within the proper time frame to avoid incurring extra charges, but don’t pay so early that you limit your cash flow.
Take a look at your bottom line.If your customer base is feeling the pinch and your sales are declining, raising prices can be a difficult step to take. However, if your expenses are skyrocketing, you will need to make changes in your purchases and/or look for ways to pass part of those costs on to your customer. Another tactic may be to market to a more affluent customer base or to focus more efforts on a particular niche of your business that brings you the best return. Consider charging extra for your extras, similar to the way hospitals charge separately for the tissues, water pitcher, etc.
Consider taking out a loan.Whatever you do, avoid racking up high interest credit card debt. If you’ve got a solid bottom line but are hitting a bit of a dry spell, talk to your local bank or government-sponsored loan agency about taking out a business loan. Although it is more difficult to secure a loan in a tough economy and loan applications will be scrutinized more carefully, it may be the right thing for your particular situation. As always, ask your accountant, local government small business agency, or other knowledgeable financial professional for advice and help in putting together, or revising, your business plan.
It’s Up to You. You can choose to sit on your hands and mope, or worse, talk about how bad things are. I have chosen to do a thorough assessment of my business. We are expanding services to meet the ever-changing needs of our customers. And, we are taking our own advice and marketing to prospective customers. (A giant leap for an advisor who has always worked through referrals.) As I see it, tomorrow is a new day. I can choose to be part of it by spending it wisely, or I can chose to hide under the covers. I relish the challenges of each day. What about you?
A lot of street-smart business owners tend to use their tried and true method of business analysis – gut feel. While we pragmatic business people are known to just roll up our sleeves and start working, there are other tried and true methods of business “score-carding” that can help you make SMARTdecisions.
SWOT, which stands for Strengths, Weaknesses, Opportunities, and Threats, is a well-known strategic planning method that can help analyze the value of a project, business venture, and the business-at-large. SWOT is best carried out by a team of people — bringing together different business disciplines, views, and experience (for example: a manager, an accountant, a salesperson). So if you don’t have a broad representation in staff, ask professional friends and representatives of your target market to assist.
SWOT analysis is more effective if you first determine a specific objective. Your objective might be to increase sales of your new widget, at a strategically lower price, to account for 10% of your gross this year. Once you have an objective, assess your strengths, weaknesses, opportunities, and threats as they relate to that objective.
An illustrated diagram of SWOT analysis often takes the form of a box with two rows and two columns that create four squares: the two squares in the top row are for Strengths and Weaknesses (your company’s internal conditions), and Opportunities and Threats (external factors) are listed in the squares on the bottom row. The left column (Strengths and Opportunities) contains positive, helpful factors; the right column (Weaknesses and Threats) contains harmful factors.
Begin by determining and listing your Strengths: the attributes of your company that can help in achieving your objective, and your Weaknesses: those harmful factors that can prevent you from achieving your objective.
When thinking of your strengths and weaknesses, think of the 5Ps (product, price, place, promotion, and positioning), staff, finances, customer base, manufacturing, technology, infrastructure, etc. Your strengths might be an ace salesperson, a quality product, and a solid infrastructure to deliver. Weaknesses may be a small advertising budget, weak marketing plan, and no marketing staff.
Next, factor in external conditions in the bottom two squares. Opportunities, on the left, are conditions that may help you to achieve your objective. Threats, on the right, are harmful, and potentially disastrous, to achieving your objective. External conditions include technological changes, legislation, economic factors, social factors, the marketplace, and your competition. Your opportunities may be that one competitor has closed shop, a second competitor sells higher priced widgets, and the marketplace is looking for a lower priced widget. Threats may be that overall, widget sales are down, your competitor has a widget with added benefits, and there’s talk of adding a widget tax.
A SWOT analysis can help determine the steps you’ll take to achieve your goal. It can also help you to determine whether a goal is attainable. If not, develop a new objective and retest. And, it can help you identify your Achilles heel – perhaps glaring to others, but not necessarily those working in a specific project or business. Once you have your list and your analysis shows you have an attainable goal, you and your SWOT team can ask questions. How can we use and exploit our Strengths? Can we mitigate our Weaknesses? How can we benefit from Opportunities? How will we cope with Threats? How do our Strengths match up to our Opportunities? Can we convert our Weaknesses and Threats into Strengths and Opportunities?
We just helped a client complete a SWOT on their entire business. Like so many businesses who need some marketing and sales help, they wanted to just jump right in. Many times, it becomes: fire!, ready, aim (rather than ready, aim, fire!). We used a SWOT to help us understand the elements of success and potential curve balls that could hurt the business. That helped us in creating a marketing plan, specific messaging, and targeted campaigns. We go so far as to rank each SWOT element so that we can graph the areas that we want to highlight and those that need attention. In this case, our client now clearly has specific talking points for the sales group and objectives for operations. And, it’s succinct and visual.
SWOT is a great tool to analyze your most pressing business objective, and you can adapt it to assess other aspects of your business — such as analysis of each of your competitors as part of your marketing study.
Every tool has its upside and downside. SWOT is great in helping you objectively look at critical areas of the business. It also has a weakness. Don’t fall into the trap of compiling lists that may not be crucial to achieving your objective or desired outcome, or use this tool to delay making decisions critical to your business. Be critical and honest when seeking to convert Weaknesses and Threats into Strengths and Opportunities. Don’t try to use weak Opportunities to offset strong Threats.
SWOT is a long-time favorite of marketing types who analyze products, promotions, projects, etc. This tool is a very practical, SMART way to look objectively at a business situation (large and small) to diagnose upside, downside, inside, and outside – in a straightforward manner.
We call our process the SMART SWOT. It goes a long way When Smart Business Matters.
For those of you who know me, I am a very direct, straight-forward professional with a passion towards perfection without bureaucracy or puffery. I look back at the skins and scrapes I have taken (and still take) throughout my professional life and would have been welcomed some advice along the way to avoid curve balls that seemed to come from all directions.
At Kathleen McEntee and Associates, we are all about providing people with a practical viewpoint, advice and resources – which is why our brand is: When Smart Business Matters.
Buyer Beware and Yes, You Do Have a Remedy
Now that I have teed up the background for you, this first posting is a Buyer Beware and Yes, You Do Have a Remedy tale. We recently had a situation with a client (we provide general business and marketing consultation and implementation services) who signed on with a very, large company who tried to sell one thing and deliver another. Our client is a small business enterprise (SBE) who does business with consumers and some commercial. For years, he was opposed to advertising, never even advertising in the local phone book. Business has been coming through referrals and the networking that he is very good at doing. Given the economy, business has fallen off, and there are only so many networking breakfasts, lunches and evening parties you can go to without driving yourself to complete exhaustion. And, of course in the networking groups are the garden variety of companies that sell some type of web based advertising scheme that will supposedly enhance your Adwords and positioning so that you have scads of leads in the blink of an eye.
After we interviewed no less than 6 companies that he networked with, he settled on a very large company who focused on managing internet advertising. The representative promised: 1st place positioning in the sites they control (they own several lesser know search sites), top notch software that gives up-to-the-minute information on clicks and calls, an account manager that will help optimize exposure, and 2 direct mail post card drops to get the pump primed – and, this could all be done with a 90-day trial. After removing the direct mail drops that couldn’t zero in on our target consumer, he signed the contract and we waited to be contacted by the account manager. After a week of so, we started getting emails from the customer service center advising us that our account was up and running – with a wrong logo, minimal information and no contact from a live person. In checking with the sales representative who always seemed to have a full voice mail box, we were told in an email that she hadn’t really known the 90-day program well and that some of what she promised, was not available and that she was really good to us by waiving a $500 fee we were supposed to have paid for the 90-day program!
I’ll cut to the chase. Whether you are small, medium, or large, a client is a client. People do business with people. In sales (a point for another time) your word is everything. And, this was certainly not the way to do people business.
Rather than trying the sales chain, where I knew it would be a struggle, I started at the top. On the website, I found the name of the president of the company and contacted the only direct phone number I could find – that of the Director of Investor Relations – to ask to be connected with him. After a very nice, professional conversation and follow up email, we now have a very good account manager (who is required to give updates to the president) who has been professional and provided some good input into keywords and other areas that should be highlighted on the website before we turn on the Adword service. Will it work and bring cascades of leads? That will be for another discussion. However, by maintaining professionalism and getting to decision makers and key stakeholders who understand the value of every customer, our client is getting what he was sold (probably more) and will have a fair chance at getting a bang for his marketing buck.
When I know the ROI from this experience, I’ll fill you in. In the meantime, the SME needs not to fall victim to large company programs or sales rep misrepresentation, but does need to have a plan with a voice to be heard without shouting.
