Business Strategy Archives - Page 2 of 2

What Role Does Social Media Play in your Marketing Plan?

Like it or not, social media is here to stay. It has changed the way we communicate, the way we shop and the way we share these experiences. Consumers would rather buy from someone they know. Absent this type of referral, a product or service review by an independent third party is deemed as nearly as valuable and certainly more credible that what a company says about itself.

According to a recent McKinsey research survey, “Social technologies as a group have reached critical scale at the organizations represented in our survey. Seventy-two percent of the respondents report that their companies are deploying at least one technology, and more than 40 percent say that social networking and blogs are now in use.” The below charts published in the McKinsey report demonstrate the consistent growth social media has experienced within the business world.

There are two ways you can leverage social media as a business tool: As an internal means to improve productivity and efficiency, and as an external means to further engage with your customers.

As an Internal Tool

Social media can be used as a collaborative platform to better share ideas and solve customer issues faster. Here social media is being used as a shared IT application, no different than the use of browsers for web surfing or applications for word processing. As a collaboration tool, it should be centrally managed with a set of agreed upon usage guidelines to encourage appropriate behavior that isn’t offensive and makes good business sense.

As an External Tool

Here is where inflated expectations sometimes lead to unrealistic lead generation, branding or awareness assumptions. The likelihood of acquiring a million users that want to use your product after reading your twitter feed is probably unrealistic, unless there is a highly compelling event that can give you the exposure for such traffic volumes. A more likely scenario is one where your customers reference and, ideally, praise your product or service within their existing social media sites and usage patterns.

The critical question to ask consider is “How easy are you to work with?” How difficult is it for one of your customers to extract data from your service and upload it into their social media sites? If it is easy, then social media might indeed have a role in your future growth. Also, what content are you providing? Is this information that will be helpful for them as part of their purchase decision and evaluation? What is of primary importance, however, is that you think about it now, and that you realize that the way we use social media will likely change over time. Today we are in the middle of a communications transformation. This means you have to be ready to make the time, effort and financial investment to stay current and learn with the rest of the other companies.

Just in the same way that every marketing and business plan should have a competitive review and a strong positioning, companies today writing a business plan or marketing plan must now have a Social Media component. Businesses must now recognize that this is not a trend that will quietly go away. Social media is an important communications vehicle that should ideally be used both internally and externally as part of your marketing and communications plan.

Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies.

Creativity is Critical to a Marketing and Business Strategy

I am sure each of you has had at least one conversation about what led to a successful business … or why a particular business failed. What makes some startups work and others fail? Obviously, the answer is multi-faceted, with no single reason. I would propose that of all the contributing factors as to why a business survives, there is no more important skill that the management team’s creativity in defining and modifying their business plan, and how they use creativity to execute upon it.

A sound business plan strategy is to choose to excel at either being the low cost, high service or best product provider. But, once a direction has been chosen, it all then depends upon execution of the plan. And, as we all know, unexpected surprises will occur, sometimes even requiring a new strategic direction, product or market. It is the creativity on how these decisions are evaluated and pursued that separates those companies that survive and thrive versus those that don’t.

Creativity is a difficult characteristic to measure or evaluate. The question of whether or not one is creative is often known but seldom fully understood. Willingness to think “outside of the box” is a reasonable description, pointing to an ability to consider new paths previously not considered.

Creativity actually takes a far larger role in our life’s direction, often without our even really realizing it. For example, two identical individuals may both face the same challenge. The creative person may see a different solution that in actuality leads to a positive outcome. The other person may simply not have the vision to see the better solution, so instead takes a different path that is harmful to their personal or family’s future. The irony is that the person in the latter scenario may never learn of the missed opportunity.

How do you rank in creativity? How do you know what you might not know? Perhaps you should try to test your creativity, to see which person you are most like … the one that say the opportunity, or the one that missed it. Next time you are faced with a challenge or “life decision” that doesn’t seem to be all that great, take a perspective that there is a positive outcome – you may simply not see it yet … keep looking to challenge your creativity to see a new perspective that could actually lead to greater success.

Creativity will help you articulate a business plan better, to then have greater success in getting your plan funded. Those with greater creativity will have better success running their business or pursuing their careers. Without creativity, even the best product, service or pricing can only take you so far.

The good news is that, with practice, creativity is a skill that can be expanded upon. But, it takes effort, it may be uncomfortable, and it may take a little more time. But, the sweet taste of success will make it all worthwhile.

Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies.

When Less is More

It may seem counter intuitive, but you can often achieve better marketing communications when you limit what you say to fewer words and topics, to deliver a more refined and narrow message. In fact, this concept can apply to other concepts and “walks of life,” such as product management, career strategies or business planning.

The challenge is how to overcome the perception that by limiting your focus you will “miss out” on a future opportunity. There is a natural inclination to expand focus to offer a more comprehensive solution, a wider scope of product functionality or to address a broader range of industry challenges.

The classic case is the start up organization that is inevitably asked by a prospective customer to perform custom work to address their specific needs, when that work veers the company away from their previously chosen direction. On the one hand, a paying customer in the “hand” is worth two potential customers in the “bush.” On the other hand, if you never achieve economies of scale from selling a repeatable product or service, you many never earn a profit, and ultimately go out of business.

A great example of a business that has embraced this concept well is one of my favorite local Southern California burger joints: In-N-Out. Their menu is limited to three combo meals, consisting of various choices of a single or double patty, with or without cheese, and with or without onions. I have learned that if I want a great burger, In-n-Out is at the top of my list.

Their message is highly focused. If I am in the mood for steak, soup or salad, I will go elsewhere. In-N-Out is just fine with that. Arrive at 12 midnight and expect to wait in a line on a Friday or Saturday night. They have no problem in getting all teh business they can handle. Staying hyper-focused on their menu has allowed them to master their delivery process of their product highly consistently, year after year after year as a privately held company.

You should use this same focus on your business messaging too. The world is too competitive to try and be multiple things to many people. Pick one. Do it well.

As a marketer, keep this in mind when preparing your communications, writing a business plan or executing upon a marketing strategy. Keep your content and messaging concise and to as narrow a point and message as possible. If you can be relentless in this exercise, your reward will be a highly effective retention factor by your prospective customers, and ultimately, the best chance for a future sale.

Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies.

The Role of Pricing in Messaging

“If you have to ask how much it costs, you probably can’t afford it”

– JP Morgan

According to Google books, the origin of this quote is a conversation JP Morgan had with a neighbor regarding the purchase of a yacht. The quote has been made famous by Henry Royce, when applying it to the purchase of his Rolls Royce automobiles.

If you have to ask, you probably can’t afford this toy.

From a marketing communications perspective, the concept is actually quite compelling – a message that rings loud and clear to your prospective customers. If you must know the price before purchasing, then it is probably too luxurious for you. A purchase decision that falls into this type of classification is clearly high end, something that only the wealthy need consider. As a business strategy, if you are selling a high end product, this type of positioning could be just right.

Pricing plays a critical role in your messaging and marketing communications surrounding not only the quality of your goods or services, but also on your focus on customer satisfaction. Do you deliver consistently superior results that your customers can justify spending more for your product? If so, then you should be charging more, and your customers will pay more, helping you to preserve your brand integrity. It is all part of a consistent message that you, as a marketer, need to convey to each of your current and future customers.

Alternatively, if your product is “me too” (non-differentiated) or if you are the low price leader, then you have no claim to charge a premium and shouldn’t. If you do, your customers will be confused, and will likely not justify the higher price, preferring instead to purchase from your competitors.

BMW is an excellent case study on how to leverage pricing as part of their messaging. Back in the 1970s, the brand was not considered premium, akin to the likes of Volkswagen. In the 1980s, however, they made a decision to dramatically increase prices across all products at a time when their marketing communications shifted towards positioning the brand as premium. It worked.

I had an interesting experience with the AAA club of Southern California about a month ago. I inquired about purchasing their premium service, which included expanded towing coverage. They refused to sell me the service, stating that I must first purchase their standard service for a year and not use it before having the “privilege” of purchasing the premium service, for more money. Needless to say I was infuriated. Here I thought they were eager to offer expanded, higher margin services. They, on the other hand, see themselves as a “country club” of sorts, where I have to pay my “dues” for a year before being considered for an upgrade, like they are doing me a favor. Talk about a confusing messaging strategy!

How does AAA get away with it? Well, it turns out they have a bit of a monopoly in the Southern California market, so there really isn’t a viable competitor. Clearly, not only is their pricing calculated incorrectly, but their view on customer service is that of a monopolistic organization, such as the US Post Office. In other words, it isn’t a priority. Even to a customer of 31 years!

To conclude, pricing plays a critical role in your marketing communications – the story you want to tell. Are you customer friendly? Are you premium? Or, are you a generic product with no differentiation other than price? Pick your story and be sure to set your pricing to support that message.

Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies.

5 Questions to Ask Before Writing a Business Plan

Writing a business plan is an excellent way to discover if your idea for a new business has merit. Going through this exercise will challenge you to see if your idea for a business has the foundation for a viable business, or if it is just a neat idea worthy of a cocktail party conversation. The difficulty, however, is that the whole process of writing the business plan can be quite time consuming, even if you elect to hire a third party business plan writer.

Before you invest the time and effort to write your business plan, there are a few questions you should consider as part of an evaluation process if your idea is worth pursuing.

I just discovered a great blog written by Pamela Slim where she talks about transitioning from the corporate world to starting your own business. As part of this process, Pamela posted “Can you answer these 5 questions about your business?” I would propose that these questions can function quite well as a “filter,” which can then help guide you through your decision making process. If you can answer each of these questions, then you understand your value proposition and are now ready to prepare a business plan.

Who is your ideal client? This is a simplified way of stating “who are you going to sell to?” Specificity is needed, to help you hone and refine your message. From a marketer’s perspective, the question here is “Who is your target market?” Who will buy your goods or services, and why would they buy it from you? Most importantly … do you have the skills and background to SELL it to them? Great first question to consider before you decide to write your business plan.
Where do I send people who are interested? This question is stating that you better be ready to make an investment in building an online presence, no matter what it is you are selling. Do you have a site already? As part of evaluating the decision to write a business plan, have you thought about the investment of your time and resources to build an online presence? What would that website’s URL be? What would your business name be? How would you portray yourself and what sort of message would you include on the site? The answers to these questions will layout a framework for you to establish a marketing communications style and plan of how your message is communicated to your ideal client.
Who would you really love to meet? I see this question as a gauge to the level of passion you have for your idea. Without the passion, your new business idea is doomed. So, who would you be really excited to meet that is a “player” or key influencer in your industry? Once you have identified that person, are you ready to reach out and try and meet them? One of the biggest attributes of a successful entrepreneur is if they feel they can change the world by doing something better, faster, easier, etc. than everyone else … you can’t do that unless you are a guru in your space and have a passion for meeting the other key players in your industry.
Which media would you love to cover your business? This might be a question asked when it comes time to write your marketing plan … where will your message be displayed, how will you market to your customers and what medium is best for establishing this marketing communication? But, if you are ask this question early in the process, it can reveal quite quickly if your business plan will be tough or easy to launch. If you don’t know the answer to this question, maybe you don’t know your target audience as well as you should, which then poses the question “Is there really a viable market out there for your goods or services?” This is a pretty important question to consider.
How do you make money? Or, what is your revenue model? Another great question. This should be on the top of your list when evaluating a new business or expanding a new division. Challenge yourself to answer this question with detail. For example, if your business is web-based e-commerce site, saying “I will sell banner ads” really isn’t sufficient of an answer. You need to know what traffic levels are needed before anyone considers placing an ad. How long will that take? What revenues are possible, and what level of traffic do I need to achieve X dollars of banner ad revenue? These are the types of questions that should be considered in great depth before spending the time and resources to get your business plan written.

Don’t worry if it takes some time to answer these questions … the knowledge you will gain will be well worth the effort. Not only will this exercise help you better understand if you really have a viable business model, but it will give you an outline of what your business plan should look like.

Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies.

The Power of the Digital Written Word

The expression that the pen is mightier than the sword may soon need to be updated … if the recent news about the Oxford English dictionary foreshadows the future.

In this recent news article, it was reported that the next edition of the world’s most definitive work on the English language will never be printed again, due to the impact of the Internet on book sales.

The power of the “written” word obviously still exists today … just look at all of the blog postings, comments and feedback that is typical on any given day. However, it is now becoming increasingly obvious that the Kindles, iPads and future book readers of the world will indeed replace the printed book, as well as the daily newspapers and monthly magazines. This transition will likely take an entire generation to be completed, but, the transition has already begun and will continue.

As a marketing communications professional, if the future of your business model or lead generation campaign is based on collecting leads from ads in a paper newspaper or magazine, now might be a good time for an overhaul (either strategically for your business, or time for a new career). More importantly, if you are a publisher of paper books (ex: Random House, HarperCollins or Simon & Schuster), you face a challenge no different than what Blockbuster and Hollywood Video faced … and failed miserably. Having a vision of what the future holds isn’t a panacea to identifying a replacement business strategy.

One challenge why an incumbent provider in a “dying” industry is seldom the next leader in the transformed industry is the fact that the incumbent has significant psychological and physical investment in the way things used to get done. Think about the physical infrastructure that today’s leading book publishers have made investments in – it would be very difficult to simply “chuck” their existing equipment, facilities and employees.

Yet, a new crop of businesses will emerge without the financial “baggage” of the incumbents, helping them to be more nimble and willing to experiment with new approaches and untested methods or strategies. This highly dynamic nature of start ups is a powerful force, one that will ultimately result in a new market leader in how this industry evolves into one that is not based on paper, but the power of the digital word.

One business strategy that has worked in the past is for an existing player to set up completely new division, one that is not encumbered with financial, political and other constraints of the parent company. The smart car is a good example, which began as an idea by the Swatch watch company, and became a reality with an investment by Mercedes Benz. The car is clearly not a luxury product, so Mercedes thoughtfully financed its launch it to address the growing sub-compact car market, which it correctly predicted. This strategy enables the new entity to be given a truly “free reign” on trying a new business strategy without diluting the parent company’s brand.

As a marketer, it helps to keep an extremely open mind on how to find the next lead, as well as what industry you choose to work in. Content is still king, but it will increasingly be a digital king, and not a paper one. When naming my blog, I am sure glad “Making Every Word Count” works in both paper and digital format, helping to avoid future obsolescence, at least the foreseeable future, which is all I can reasonably expect in today’s highly fluid business climate!

Gordon Benzie is a marketing adviser and business plan writer that specializes in preparing and executing upon business plans and marketing strategies.