I did a business diagnostic with a business this week that has been around for 25 years. From 1999 to 2007, they went from 3 million in revenue to 30 million in revenue. In the last few years the economy has killed their business, and in 2010 they did 13.5 million and bled a lot of red ink. They are facing a financial tragedy. If they don't turn the ship around quickly, they are going to lose their multi-generational family business.
As I went through a list of some very basic marketing strategies, they let me know that they weren't doing them. They knew that they should be doing these fundamentals, but they shared with me very frankly, "For years, we had more business then we could handle! Our business strategy sessions were all about how to keep our customers satisfied and how to systematize our business so that we could handle more volume. We never had to learn how to market; business just magically came through the door, and word of mouth was enough."
It is amazing to me how many basic fundamentals are missing in very mature businesses that were doing very well several years ago. But, now that the economy has changed, they have to fight their way back to prosperity. Here are some of basics that I am helping them put into place:
- Making the most of every lead - They have plenty of leads coming into the door and calling them on the phone, but they don't have a system that puts an iron gate around that prospect until they become a customer. Having great scripts, a sales plan, capturing their info, and having multiple touch points will increase conversion. Most importantly, management must make time to sit down with each member of the sales team and coach them through every lead. Taking time to review objections, role play, and provide direction is critical to helping make average sales people become above-average and helping above-average sales people become superstars.
- Maximizing every transaction - If there are less customers buying from you less often, then you need make the most of every one that is ready to make a purchase. Are your customers aware of every product that you sell? Has a customer ever said, "I didn't know you did that?" Do you have a plan to make sure that your customer is educated about everything that they need to complement their purchase? In most cases, a basic checklist can do the trick. It could look something like this, "Here is a list of the top 10 items that our customers purchase when they buy a ________. Is there anything on that list that you may be interested in as well?" If you can get an average of a 10% - 20% increase on your average sale, it will add up to massive results at the end of the year.
- Put an iron gate around your customer - It is your job to make sure that your customers remember you! It is your job to stay top of mind! Stay in touch with email newsletters, reward them for loyalty, have customer appreciation events, give them magic moments, let them know that you miss them and send them special offers that give them a reason to come back. Marketing to existing customers is 6 - 10 times more effective than marketing to new customers. So why, then, do companies budget tens of thousands to market to new customers but next to nothing to market to existing customers? A smart established business must have an aggressive plan to make sure they are staying in front of their existing customers
- Protecting margins - Good times allow for unnecessary expenses to creep in. Worse than that, receivables get neglected and as they age, get more difficult to collect. Remember that cash is king in tough times, and just because you could afford to be generous in extending liberal terms during good times doesn't mean that you can afford to do it today. Finally, avoid discounting at all cost. All discounts come right off the bottom line of profits for a business. Look for ways to add value instead; only offering discounts if your customers buy in bulk....and pay in advance!
- Coach your team and hold them accountable - As a business owner, it isn't your job to do everything; it's to make sure that you have provided your team with everything that they need to do everything. You are the conductor of the business, so don't try to play all the instruments. Help them set quarterly goals; have weekly one-on-one meetings to measure their progress; have them set priorities for the upcoming week; hold them accountable to achieving those goals; and help push employees through any road blocks they are facing. Everyone needs accountability to reach their full potential. Imagine where your business would go if each of your team members doubled their effectiveness. If they are not being aggressively coached, they are likely half as good as they could be.
- Go back to school - Growing a business has changed in the last few years. What got you to where you are isn't likely to carry you to where you want to go. Some 0f the best strategies to generate leads 5 years ago are no longer effective. Some mediums that didn't exist 5 years ago are today's best strategies. Look at what has happened to advertising in the yellow pages over the last few years. Search engines have all but replaced the phone book as a resource for looking up local businesses. Heck, even companies that market yellow pages are selling web marketing packages so that you'll continue to do business with them. The point is that to succeed in 'the new world' you need to invest in your education to learn strategies that are working in today's market place. The more knowledge you have, the better you'll be at attracting new business.
If you are an established and experienced business owner, finding that you have drifted away from the fundamentals, I hope this post has been a helpful push to get back on track. Remember that the legendary coach, Vince Lombardi started every training camp by getting his championship teams together and re-introducing them to a football. He would hold a football in his hand and actually say to them, "Gentleman, this is a football." From there he would refocus them on the basics...blocking & tackling.
Ladies and Gentlemen, it's to look at your business and make sure that you are blocking and tackling with marketing fundamentals!
Make it a great day!!!
If you are a business owner that is ready to take your business to the next level, Coach Reggie would like to offer you a Free Business Coaching Session to identify untapped potential in your business, brainstorm strategies that will help you grow, & outline your next steps to success.