Heads or Tails? You Need Both for Business Success

In the hyper-competitive marketplace and ridiculously challenging economic times in which we all conduct business the debate rages on about which is the more important goal to ensure success. Reduce costs or increase sales? Find more customers to add revenue to the top line or streamline your operation to make a better bottom line? The answer however is both simple and obvious. You need to do both.

Marketing is really an investment decision. Spend money to make money. Some things we do are measurable. Others have more indirect benefits. But either way, your marketing efforts must make you money. All of the long-term studies on economic downturns and how companies respond to them show over and over again that the ones who try to capture more business have enjoyed sustained sales and profit growth. You can’t save your way to success.

On the other hand, operational decisions tend to be purchasing oriented in nature. You must find ways to contain, reduce and remove costs. How can we procure products and/or outsource services more effectively so that they improve your operational efficiency and save money? No good to bring more in on the front end if your overhead and cost structure make you cost prohibitive or unprofitable in the long-run.

Consider these three priorities as the key to sustained marketing and sales revenue success.

Attract. Until you have potential customers aware that you are even a viable option for what they are looking for, you have no ability to impact your top-line. The latest research I’ve seen indicates that on average in the United States, we all see over 3000 marketing messages in the form of advertisements, logos, etc every day. The question becomes, how many do you remember? An even better question is; do your prospective customers remember yours’?

If you adopt the philosophy that you can pull back on your marketing and still find have people find you, you run the risk of what Henry Ford commented on when he said that "a man who stops advertising to save money is like a man who stops a clock to save time."

Acquire. Wonderful to create a steady pipeline full of prospects but what happens if you can’t convert them into customers. As sales cycles lengthen and decisions become more complex involving multiple people on each side, how can you close the deal so both parties can enjoy the benefits of what you offer?

Your job on the sales side is to make sure that the leads you receive or generate are a good fit for you, your organization and your products and services. There is no good reason in the long run to try to use the hammer to fit a round peg into a square hole. The best way to do this, ask more questions. Show and tell is out. Features and benefits are out. Know your business, understand the prospects and work cooperatively together to discover if you can help – or – not.

Retain. If you do a good job generating leads, a reasonable job making the sale but then your customer service effort lets too many customers leak out the back end, you again will not be able to get any traction for revenue growth.

The best way to retain customers: exceed expectations. If we don’t meet customer’s expectations you will not only lose them but in addition they will tell on average an astonishing 16 people. If you only meet expectations you can still count on losing 33% who will try something, or someone else. Only by exceeding expectations do you give yourself a chance to realize long-term value with your customers. And remember, customer expectations are created by both your marketing promise and their sales experience.

On the operations side, consider these three ways to improve efficiency and reduce costs.

Vendor consolidation. In an era where internal departments have fewer and fewer full-time staff, it becomes difficult if not impossible to keep track of too many suppliers. Better to find fewer suppliers each of whom can do more for you. The time saved in managing them, as well as the reduced amount of paperwork that needs to be processed very often pays for itself.

In addition, when a supplier becomes more of a partner, their level of intimacy about your business goals and preferences increases and the ability to make positive contributions goes up as well. This is not always the “cheapest” way to buy but almost always creates the highest value and overall most favorable cost structure in the long run.

Print-on-demand. Very often organizations that use even a moderate amount of printed materials can benefit from reducing order quantities and going to a more just-in-time fulfillment process. Average obsolescence can run as high as 33% of a larger print run – especially when warehoused. Smaller quantities may have a higher unit price but will not have the waste factor associated with larger orders.

Candidates for this kind of production method include: business cards, envelopes, postcards, targeted marketing campaigns, and almost any internal document.

Outsourcing. Over the last few years perhaps the major strategic initiative that has helped many organizations increase efficiency more than any other tactic is the outsourcing of non-core competency functions. Everything from sales management to IT and HR staff to warehousing and distribution of products, parts and samples through 3rd party logistics providers has been accomplished with successful results.

Again, the new business reality demands that companies with reduced internal resources specialize in various products or services. It becomes next to impossible to create short-term or one-off processes that can be done more efficiently and cost effectively than by an organization that does a particular kind of work or function “all day long”.

When you’re flipping the coin trying to decide which area to tackle first, increase sales or reduce costs, realize that you have to do both, often simultaneously. By taking measured, prudent and consistent action in these two categories and six specific areas; you can grow your top-line while increasing your bottom line and at the same time get the added benefit of reducing your worry lines.

Make Marketing Personal

Consider the following statistics from the classic marketing book Differentiate or Die, written by Jack Trout and Steve Rivkin. In a very short span of time not long ago, there was an astonishing explosion of choice in consumer products. Examples included;

· A 700% increase in Frito-Lay chip varieties
· An 800% increase in Colgate toothpastes
· A 900% increase in Pop-tart flavors
· An increase from 5 to 285 running shoe options

With all the choices present to consumers and businesses for products and services, why do so many marketers still rely on out-dated one-size-fits-all strategies and tactics?

Companies of all sizes struggle more than ever today to create new customers or retain the ones they have. Sales people frequently “take the heat” for not achieving sales and revenue goals but in many cases it is misguided marketing programs and campaigns that are to blame.

All too often, stagnant organizations are using the “build it and they will come” philosophy. Enamored with product design, technology or their own perceived benefits, they don’t put the proper effort into building awareness, cultivating acceptance and creating demand in their intended target markets. Just like the decrease of effectiveness of antibiotics due to overexposure, so to potential buyers of all kinds are immune to traditional, over-used mass-marketing approaches.

The service we hope to receive when we are the customer is the same your customer wants to receive when buying from you – personal. From the deli guy behind the counter at the local market to the real estate agent helping you buy a new house, we want the people who serve us to know our preferences intimately. The recent “who knows you better than Dunkin Donuts” campaign is an excellent example of marketing trying to help increase sales by suggesting “getting personal.”

Though not limited to print, the current explosion of variable demand print (VDP) technologies shows how the power of personalization can positively impact marketing and sales success. Described in the book The One to One Future by Don Peppers and Martha Rogers, the ability to identify and interact with potential customers by understanding their unique desires and customizing your marketing message to them individually is now not only a reality but a necessity.

Personalization implies being able to build a relationship with your customers – one at a time. Consider these three factors as benchmarks in successful personalized marketing programs.

1. Nurture. One of the more common mistakes organizations make is to act as if there is a silver bullet in the marketing effort. One ad, direct mail piece or billboard is all that is needed to get the results. In our personal relationships, one event does not define them. Rather, it is an on-going series of interactions and remembrances that keep us connected to other individuals. Greeting cards, flowers, presents, phone calls and many other expressions of endearment help our personal relationships survive and grow.

In the same way, (to those who are receptive to it) you must commit to a never-ending series of communication tactics like newsletters, emails, white papers, direct mail campaigns etc. to interest, excite and acquire new customers, and, keep them for the long haul. Relationships in business are built just like in our private lives, through constant attention and contact.

2. Relevancy. Many of us like to think we can hold a conversation with just about anyone about just about anything. And while mixing well at cocktail parties and networking events is a critical business skill, the individuals we strike up business (and personal) relationships with that pass the test of time are going to be those that we have the most in common with. I can talk about cars, television shows and science but you’ll have me much more engaged if we’re talking about kids, golf or business (not necessarily in that order depending on how my youngsters are behaving that day).

In marketing your product and service to your intended audiences, without a deep and compelling need for it and an effective message your offer will get no traction. Personalized marketing has the advantage of speaking to the specific needs of each individual potential customer. It generates the feeling from the buyer that “they are speaking to me”. Market and product segmentation backed up with targeted, relevant communications is the answer to generating higher response rates in your marketing efforts.

3. Two-way relationships. Popularized by marketing guru Seth Godin, the concept of permission marketing is a critical part of personalized relationship marketing program. Relationships, either personal or business, don’t work when they can be best characterized as a one-way street. It is the give-and-take, seeing each party as a partner in the other’s success over a period a time that makes them meaningful and profitable.

Too many organizations that do not embrace this way of thinking send out lots of “stuff” in hopes of getting any kind of business. Sophisticated companies know that the process of building customers requires constant feedback. The lifetime value of the relationship only grows for both parties when it is more personal, more intimate. Rather than a one-way street with a dead end, smart marketers build highways of communication that go in multiple directions. Conduct focus groups, do research, and send surveys. Ask, listen and address customer concerns and suggestions to ensure long-term growth.

In the hit movie You’ve Got Mail, the business tycoon Joe Fox (Tom Hanks) responds to Kathleen Kelly (Meg Ryan) regarding her frustration about him putting her small bookshop out of business, “it wasn’t personal – it was business”. To which she replied, “but it was personal to me”. The importance of personalization in the attracting, acquiring and retaining of customers will only increase as time goes on. Relationships are built on personal contact. Good marketing today must be personal to be successful. Anything else just may leave you looking like too many of the non-descript products or services that no one notices – and no one buys.