Ten ways to improve business efficiency and profit

Conventional wisdom suggests that in times of economic downturn we should shut up shop, limit expenditure and curtail growth and the exploration of opportunity.

Yet brands such as Hyatt, Burger King, FedEx, Microsoft, HP and GE are heralded as recession start ups that went on to be world beaters. And currently companies like Groupon, Zynga (‘Farmville’), Twitter, Asana and Ustream are securing funding and growing exponentially.

Here’s my take on ten business issues that if handled well, could stimulate greater productivity, efficiency and steer your business to greater profit.

1. Have a vision

Having strategic vision is central to all business success. Any entrepreneur will tell you that whilst there may have been some luck, they knew exactly what they wanted to do and where they wanted to arrive. Have something to work towards however small, lofty or material!

2. Share your vision

Seems obvious but do all your employees know unequivocally want you want to achieve? What about your customers, suppliers, partners? Imagine the opportunities if you shared your vision with them and made them stakeholders in your future success. It’s a controversial approach and could be taken in steps, but if you don’t commit plans to paper and them voice them, there is a great risk they won’t amount to anything.

3. Key account vs. any account

Is your business model to work hard with a small number of market leading bigger spenders, or a large pool of smaller customers. There are merits of both approaches but it might be time to rethink this now.

4. Inhouse vs. outsourced

In a bid to keep control of costs, you may be keeping everything inhouse but in so doing you are lacking the clarity and expertise that could be brought to bear by third parties. It might be in your interests to outsource some aspects of your business – accounts, debt chasing, marketing, IT, human resources to dedicated specialists so you can concentrate on production, quality and providing superior customer service. Think about where your people are deployed and where the bottlenecks are.

Tim Ferris penned an interesting book, The Four Hour Week on the power and freedom that can be created by extreme outsourcing. Ultimately it comes down understanding and appreciating the value of time and what your time is best spent doing?

5. Actual vs. virtual

In the new converged global economy, the ability to create a business and to work more nimbly and flexibly than slow lumbering competitors with huge overheads that are passed onto customers has never been easier.

Do you need a physical location to drive your business, and can it be delivered virtually. Sure there will be a need for key back-office functions, but the pride of having leafy, fully furnished offices, a car park full of expensed cars and the latest computer technology are simply folly. And you’ll have to work harder to pay for it all.

6. Software vs. the cloud

Software and licenses are a massive cost to business, depending on what sort of activities your company is engaged in you will be spending many thousands on Microsoft, Adobe and other packages.

An increasing number of companies are moving to the cloud and utilizing platforms like Google Docs which work with traditional branded products. And companies are migrating databases, email design and campaign management, dispatch and analytics online too, with Salesforce, DotMailer, and Campaign Monitor amongst the most popular.

7. Development vs. recruitment

A new recruit can cost salary + 25% or more in the first year alone if sourced using a recruitment agent. And there are no guarantees that there will be a good cultural fit or that they will perform in the role. So that 3-6 months looking, and 3-12 months of learning curve just cost you 18 months. Better to develop passionate individuals, like at BDB, where most recruits are language graduates who are put through the Chartered Institute of Marketing and grounded in marketing and PR on international client accounts.

8. Traditional vs digital marketing

The obvious answer is both, but integrated and linked to measurable objectives so you can be sure you are doing the right things to move the business in the right direction and towards your vision. Advertise selectively to drive awareness and interest, use PR to build reputation, attend trade shows and virtual events to showcase yourself, develop social media profiles to support search engine optimisation and audience engagement and launch a relationship management program to tie in customers and warm prospects.

9. Outbound vs inbound

Outbound, though still relevant, is declining as cold calling is being replaced by warm social media generated lead generation. Investment in inbound content driven marketing initiatives like blogs, white papers, video, webinars to drive engagement all take time but separate innovative, leading companies from the aspirational, the restricted and the lazy.

10.  Multiple agencies vs. single agency

If you are outsourcing, are you getting best value. Agencies are naturally inquisitive, challenging and competitive. If you run a pool of agencies are the responsibilities clearly delineated and understood by all? Do you provide clear transparent briefs that are understood? Perhaps your business doesn’t warrant several suppliers and would benefit from one supplier developing a deeper relationship with you? It will certainly save you time and money.

Much of this post is about focus. Doing the same in 2011 isn’t going to be enough. Equally though, deviating from what you do well isn’t a smart approach either. The businesses that will thrive are those that make the best use of their people, their contacts, their creative thinking and emerging technology. But isn’t that how its always been?

Top image  Smart Garment People

What are you going to do differently?

If your company works to a January-December financial calendar, you are probably knee deep in planning right now. But have you learned from what happened this year, how you went about it, how you motivated your team, how you did or didn’t engage your customers?

There is an old saying ‘if you always do what you always did, you’ll always get what you always got’.

If your 2011 is about getting bigger, delivering more, being more efficient, being more creative, being more attentive, protecting and defending what you have, you need to be approaching things in a different way. Here’s some things to get you started.

#1  Think creatively: Take your planning meetings and brainstorms out of the stuffy confines of your boardroom and stage them somewhere else – a shopping centre, a museum, a park – anywhere where there is new and unusual creative stimulii.

#2 Have a campaignable idea: Create a hook on which all marketing activity can be hung, and stick to it for one year. Familiarity pays off. Advertising theory suggests people need to see an ad five times before it registers and stimulates an action.

#3 Be realistic: Shooting for the stars in the current downturn creates unnecessary pressure on your most precious assets – your people. Set achievable targets that are rooted in market insight not a standard 5-10% which can’t be validated.

#4 Know where you’re coming from: Appreciate what made your business successful and stick to it. Sure, there are opportunities to diversify along the way, but the best companies stick to what they’re good at, and deliver it consistently.

#5 Know where you’re going: Document and share company goals with everyone in the organisation, your partners, suppliers, customers and prospects. Writing it down and communicating puts it out there and gives it the best chance of happening. An idea only becomes so once it is shared with others.

#6 Plan for the best case: In an ideal world, where budget is not an issue, what do you want to achieve and how would you achieve it?  Scale this back within your resource to ensure your activities align with your business goals and where you are going. Be encouraged that the tactics don’t change even if the tools might.

#7 Think measurement: Attribute marketing investment directly to leads generated by mapping the process through given channels and tools. Digital inevitably works best, but specific landing pages can be set up to support all types of activity.

#8 Getting management buy in. Present your plan passionately to your management team as if it is your own business. Sounds obvious but most employees without a shareholding don’t think like this. Nothing achieves engagement better than passion, commitment and belief.

So, we come back to the burning question. What are you going to do differently next year?

Disruptive innovation

A thoughtful piece penned by @James Trezona on the Management Today website calls for businesses to tear up the rule book and accept that the new economy and new technologies demand a new way of working and a different approach to innovation.

Trezona contends that rather than risking organisational anarchy, disruptive thinking calls for a root and branch review of systems and processes and accepted thinking, in order to breakthrough and come up with something novel. Often this can lead to more creative, more efficient and more effective solutions.

Check out the post at Management Today and have your say.

Image Science Progress

Recession marketing

In an interview with Marketing magazine, Nick Smith at Accenture talked recently about the four key things that businesses should be focusing on in order to safely navigate the recession. They are value, innovation, expectation and organisational ethos. Here’s my take.

1. Value Fundamentally are you overpriced for what you offer? What do you stand for and offer? What service, experience, add ons and extras can you or do you provide that make your offer more competitive from a total package perspective?

How does your value proposition sit when compared with the competition and the perceptions of your customers?

2. Innovation Despite recessionary economics suggesting that we ‘regress’ and seek out brands that remind us of more prosperous times, there is a data supporting the proposition that we’re attracted to innovation and the idea of the new, exciting and different. There are countless examples of companies and products (including Apple) that start up in recessions, capture the imagination of an audience and ride it out.

Where you can innovate in your product/service without losing focus? Perhaps on value?

3. Experience/expectation Nick says high performing companies understand the customer experience. What is undeniable is the power of the Internet, broadband, the mobile revolution and the viral nature of communications now means that businesses have to think much more strategically about their marketing communications. Brands like Vodafone map brand touch points well to ensure consistency and clarity.

Have you mapped your brand touch points? How do customers find you, engage with you, convert and keep coming back for more?

4. Organisational ethos With the Internet at the heart of everything, non responsible behaviour, or poor or non-response when a brand is under the spotlight, is amplified. Strategy, speed, impact and a feel for emerging technology are all key if today’s marketers are to make the most of opportunities and to head off potential crises.

Is your organisation ahead of the curve or behind the times? Surviving the recession depends on it.

Image watblog.com

Blog Gold 2010: A funny thing called insight

Insight is the holy grail of customer relationship marketing.

Insight gives you understanding and perspective.

Insight allows you to differentiate.

Insight enables you to proposition.

Insight drives creative marketing.

Insight can help you add value.

Insight can ensure you are able to charge more.

And some agencies can charge clients vast sums of money for it.

Think, who is best placed to give me insight into customers, their perceptions, motivations and brand choices? And who has the relationship and ability to ask these questions of your customer? Whether you choose the direct or indirect route, one thing is sure, it will effect the number of zeros assigned from your marketing budget that might be better spent elsewhere.

Original posted 14 Sept 2009. Image courtesy of 2minuteswith.com.

Making an exhibition of yourself

Trade shows are often a mystery to me. They are an expensive, time consuming and resource draining element of the annual plan but done well, can energize or re-energize a tired sales force, a disinterested distributor network, or disengaged customer base.  They offer the opportunity to demonstrate, to research and to make introductions in a safe, if artificial, environment.

I recently had occasion to attend a trade show in Birmingham, visiting a client who was exhibiting their wares and I also used it as an opportunity to research the particular sector and to talk to some of the leading players. I think more and more people are attending shows as a delegate, opting to go about their information and contract trawl in a much more clearly defined, but guerrilla, manner.

I deliberately picked the second day to maximise time with influencers and decision makers on stands (they would simply have been too busy on day one). It became quickly apparent to me that many of the exhibitors were experiencing poor levels of traffic and interest. Most were quick to bemoan the show, its organisers, their promotion methods, and the decline of UK trade shows in general. Worryingly, few accepted their role in promoting their own attendance at the show and too many stand personnel were quick to offer sweeping statements without really ascertaining who I was or what I was interested in.

Trying to spin this experience (and fourteen years of managing trade show attendance) into some positives, here is my take on getting the most from trade show attendance.

1. Establish that your target audience attends. Surprisingly obvious, but despite waning interest, how many companies (yours included) persist with certain shows in a bid to keep up appearances?

2. Agree a single and central proposition and stick to it. Lots of stands are just too cluttered. Issue based communication is the order of the day. Delegates have problems to solve so reframe your whole approach by answering ‘Who do I help and how?’

3. Agree evaluation criteria by setting benchmark objectives. Don’t be so vague as to have a simple enquiries target – cut it by product, sector, customer type, geographical market or sales rep. Be bold, you are investing big money and you need to ensure  a return.

4. Design data capture early on and ensure it can be quickly used after the event. If you can invest in barcode scanners if they are on offer. Anything else is just fiddly, time consuming and unprofessional.

5. Take space only and design a stand that reflects the importance of the market to your business. If the UK packaging sector is your number one sector, reflect it by having a corner stand open on 2-3 sides, some good height and visual branding, hospitality space and on stand promotions and Meet the Expert type events. Put it another way, why not?

6. Befriend the organisers. Like in any other walk of life, they can give you a great spot next to the seminar hall, near the entrance or near the coffee bar, advance notice and deals on showguide advertising, ad banners on the website and in promotional emails, and opportunities to join the conference program. By not creating a relationship you are reducing your ability to do this.

7. Integrate the show into your marketing and communication activities. You decided months in advance to attend the show. Tell people. Add it to your website, stationery, advertising, emails, press releases, invoices, statements etc.

8. Invite key customers & prospects and get them to network. Use your best most loyal advocates to do your selling for you. Everyone knows word of mouth and referral are the best, and easiest routes to new business. Act as the facilitator.

9. Brief your stand personnel on what to plug, how to act, and ensure they are always mindful of looking open, engaging & interested. There really is nothing worse than the two suited guys clogging the stand, talking to each other or tapping into a laptop. All those thousands of pounds flushed down the toilet as potential buyers stroll by.

10. Invite editors of the major journals to visit the stand and meet the team. Yes, it’s a tough sell, especially if PR is not one of your strong suits, but by getting editors warmed up to you as a business and what you do, it makes it easier to get releases placed in the future and can help you position yourself as an expert when they write features about the things you excel at.

Here’s to making an exhibition of yourself, in the right way.

Image Danburgmurmur Flickr stream

Comfortable in your own skin

Has your business rushed to diversify in the last twelve months because of the economic downturn? Has your management team realigned business objectives into new areas? Has your company overstretched in a bid to simply stand still?

Experience tells us that some recession innovators do ultimately stand the test of time. But what companies like Apple also have, and continually refine, is a compelling proposition, an unwaivered strategic vision and a serviceable market. Without these, most companies and brands can not last long term.

Most of us do not work for an Apple. But we should follow their lead and create and work to the same strategic framework in order to ensure durable long term business success.

This means we have to be bold, we can’t pretend to be something we’re not, we can’t try and land business we have no experience of delivering well, we can’t diversify into sectors we have no expertise in, and we can’t enrol new recruits without giving them the agreed destination and the map of how to get there.

In essence, we need to be comfortable in our own skin. Are you? Is your business?

Principles of marketing 9: Exploding the 7Ps of marketing

Classic marketing approaches like the 4Ps (or service marketing 7Ps) retain their validity today because they still provide a useful framework for marketing regardless of platform. As an example, I recently conducted an exercise to apply the 7Ps to an online marketing plan for a consultancy firm I’ve worked with.

Product: The act of providing consultancy (in this case risk consultancy) can only effectively be delivered in person. The Internet provides incredible reach, allowing companies to position, package and promote their offer directly to target customers worldwide. Websites can be developed to include engaging multimedia content, white papers and digitally distributed material to reaffirm their expert stance.

Place The Internet provides speed and convenience which is fantastic for a niche service provider. All available traffic and enquiry generation tools can be used, from search engine optimisation (natural and pay per click), to link building, social networking/media, digital PR and the use of banner ads on key sites.

Price Companies operating in this area typically operate a ‘clicks and mortar’ or mixed mode approach where customers use the Internet to research and shortlist suppliers before making an offline purchase through a bid/tender.

Promotion Effective measurement supports using the online channel. Customers search online so companies need to be located through search, advertising industry portals, trade associations and websites for influential trade publications. High visibility in these areas will stand companies in this area well.

People Most in-house marketing teams are small, so websites need to be automated as far as reasonably possible. Most benefit from functions such as FAQs, live chat, MyXXX login, forums, downloadable scoping documents to save time and provide customers with the information to ‘self serve’. This allows consultants to respond more quickly and decisively when customers make contact and also free them up to spend time on complex, high value contracts.

Processes Effective enquiry management systems should be established, with a strong case for automating many of the required steps in the enquiry handling process, adding the ability to quote/spec/tender online.

Physical Evidence Consultancies need to reassure customers about the integrity, safety and security of their website and doing business online by adding reviews, testimonials, certificates and privacy policies. Regular opt in email communication, focused around news, comment, tips and advice will demonstrate expert and trusted positioning.

There are reasons why the simple, tried and tested approaches in marketing stand the test of time.

Principles of marketing 7: Strategic focus

Marketing strategy marketing assassinStrategy can be a dirty, intimidating and expensive word. It often scares entrepreneurs and managers in businesses because by having a strategy, you’re nailing your colours to the mast and are setting sail on a specific course of action in a specific way. This delights consultants as it means they can pretty much write a blank cheque to help seemingly hapless clients develop a strategy.

Strategy is actually the backbone of successful businesses and put simply is the way you set out with available resource to achieve your business objectives. As a bonus, once you have selected a strategic marketing approach, you can apply some pretty clear marketing tactics to ensure it works.

Two recent blogs by Seth Godin (Choose Your Customers http://tinyurl.com/y9ubqgn) and (The Why Imperative http://tinyurl.com/yduc72j) demonstrate in different ways the fundamental importance of strategy.

The value this blog post aims to bring – as an instalment of my Principles of Marketing series – is to simplify strategy so everyone can develop one that works for them.

Aligning with overall business objectives is the goal. There are four clear marketing strategies – using the oft-cited Ansoff Matrix – which cover the marketing of existing or new products and services within existing and new markets.

1. Market penetration strategy (existing product to existing market). Where a market is of significant size and return can be achieved, it makes sense to make the most of your reach, existing customers, networks and contacts to drive referral. Amazon’s drive to become the world’s leading non-high street retailer by pioneering the review feature revolutionized online shopping.

2. Market development strategy (existing product to new market). Amazon could be cited again here too, but market development is about finding new segments of customers for your products. Leading gadget sites like Firebox and Boys Stuff have done this well by setting up gadget collections aimed at women, accessing a whole new untapped demographic.

3. Product development strategy (new product to existing market). Google are expert in developing new products, including their cloud based MS Office comparable products that are free and can be accessed from any computer anywhere in the world. Dyson pioneered a new type of bagless vacuum cleaner and more recently an energy saving, fast hand dryer that is being rolled out across UK washrooms.

4. Diversification strategy (new product to new market). Is Apple the master in this area? A niche design led computer designer into the 90’s, new products unquestionably opened up new markets . The launch of iTunes and the iPod and then more recently the iPhone have taken Apple mainstream. Promoted through early adopters, they were picked up as must haves by the mainstream. The boldest strategy, but then when you’re up against a competitors like Microsoft and Dell, you have to do something to differentiate.

In reality, it’s not so simple as most companies have a range of products and services that each require their own strategy, due to being at different points of the life cycle, being a different investment stage, and depending on the market and the needs of the customer they target.

But starting to stand for something, and being able to say no, will crystallise your thinking and stand your business in good shape for the future.

Principles of marketing 6: Know where you want to go and focus on it

ObjectivesText books, college lecturers and the graduates from the Mars management training programme extol the virtues of marketing planning and the importance of setting SMART objectives.

And for good reason.

Specific, measurable, achievable, realistic and timed objectives give your marketing meaning and focus. If you know you have to sell a set number of units through a particular distribution channel over a given time period, you can direct your resources to ensuring you meet, even exceed that objective.

And when in total alignment with overall corporate and sales objectives, your marketing is even easier and even more focused.

How to Write a SMART objective

Specific – state what exactly is to be achieved (like an increase in sales or awareness).

Measurable – establish whether or how far the objective has been achieved (whether a % or £ increase).

Achievable – set against the context of the business and its market environment (growing, declining, new market).

Realistic – set against the context of previous performance (comparing like for like periods and sales).

Timed – ensure you allow an acceptable timeframe.

Too often, companies and marketers get sidetracked by whims, fads and trends, and channel energy into activities that don’t deliver against objectives.

Review your marketing plan. Do it today. If you can’t link an activity to a marketing and higher business objective, immediately stop spending time and effort on it. And if you are labouring to meet an objective, reassess your activities to ensure that they get the attention they need.