Business Strategy Archives - Page 2 of 2

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.

Why Write a Business Plan?

This is a topic that inevitably comes up once an entrepreneur comes up with a new idea and already has a clear vision of what a company might look like to address this market need. The question is whether it makes sense to actually write a business plan if you already have a good understanding of what to do. If you have a strong understanding of the industry and a great idea for a new business, one might argue there is little benefit to write down what you already know in your head. And, if you plan on being self-funded, there is no investor audience you need to speak to … maybe your time would be better spent focusing on actually starting the business?

These are all important considerations, especially if you are very busy, so would have to incur a cost to hire a business plan writer to accomplish the task.

My response would be that there is a very important benefit you gain when going through the process of writing a business plan – it forces you to think about the critical details, any one of which might cause you considerable pain if left unaddressed. The critical benefit of writing a business plan is that it forces you to think about exactly how you will start your business, how you will position your value and segment your audience in your marketplace in a unique way that actually resonates well. In other words, by putting the words on paper and discussing your ideas with others, you can flush out your concept into an actual plan that can then be executed.

Let me give you an example. Let’s imagine that you want to start a party balloons business that provides decorative balloons for all sorts of events, both big and small. In your mind, you know balloons and the competition. You start in your garage and begin handing out flyers throughout your neighborhood. How do you know you have identified the best market segment to serve? How long have your competitors been in business, and what are their margins? How seasonal is your business? What is your five year profitability plan? Without a formal plan, you might not spend the time to think about these types of questions. And, if you don’t put these types of issues down on paper, how will you know if you are on track to achieve your objectives? These are the sorts of questions that might not readily come to mind unless you actually go through the process of writing a business plan.

And, if your competitor does go through this process and you don’t, then they might be in a better position for long term survival.

Only after taking the time to dig deep into what your business can become do you have any chance of actually growing it into something that can actually achieve and exceed your wildest dreams. Question such as what types of customers might you reasonably expect to draw? And, from an income and expense perspective, how sensitive are your suppliers and cost of goods sold? What happens if costs increase by ten percent? Will this make your profits disappear? If so, wouldn’t you want to know this fact before you started your business?

It is this “digging deep” philosophy that can make the difference between your business undergoing a slow and painful death, or to survive and thrive, based on the careful review you have already performed by holding yourself accountable by putting your plan in writing. It is amazing what commitment can be achieve when the process of simply putting something down in a printed or digital format. There is a sense of obligation once such a document has been prepared, which then becomes your roadmap for success. If you hire a writer to help guide you on this journey, you will hold yourself even more accountable to what is agreed upon in the plan. Funny how when you pay for something, the desire to get value out of it tends to increase dramatically!

Once you have achieved your initial stated objectives, it might then be time to seek outside funding. If you can present a plan that was already prepared from a year or two ago, and can then show that you have been following it (more or less), your story and “street creditability” with an outside investor will increase substantially, perhaps even getting to a point where it becomes the difference between securing initial Angel funding – or not.

If you are serious about starting a new business or expanding an existing business in a new direction, the minimal investment of time, resources and cost to sit down and write a plan on how you plan to proceed will offer you a tremendous return on investment, giving your business an important “jolt” of adrenalin that might make the difference between success and failure.

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.

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.