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.