We all know that a business can never stand still as it will actually begin to slip backwards reducing profits and market share. A sustainable business is always creating new opportunities and customers by marketing their product or service in a structured objective way.
I would like to discuss the impact of a carefully structured focused marketing strategy and how it can influence the profitability of your business. Regardless of the current stage of the lifecycle of your business whether your business is in start-up mode in an emerging market, or you are a mature business in a well developed market you cannot ignore the need to integrate an objective marketing process within your business. It should complement your business plan objectives.
You may not need a highly sophisticated strategy , nevertheless it is important that you have independently considered the overall needs of your business; and more importantly considered the needs of your customers. Ensure you have aligned these needs with your unique selling proposition, that is, your point of differentiation. It is very important to make sure your selling proposition does provide obvious advantages and supports the customer's needs. Your marketing strategies , customer service requirements, price points, product or service advantages should ALWAYS begin by evaluating what the customer is looking for, it helps if you put yourself in their shoes and ask yourself as a customer "what's in it for me?"
While this may seem obvious - product or service advantages require constant review to ensure alignment to support seasonal adjustments, new trends , technology and fads. Think about what is the preferred mechanism of attraction for your market? E-Commerce or face to face contact? Is it appropriate to use an alternative mechanism from the market norm to generate new interest? What makes your customer base tick? What mechanisms are you going to use to attract new customers for both short and long term revenue streams? Or is it to complement increasing your profile in the market, to support launching a new product or service.
If you have a website or are considering implementing one consider what are the objectives of the website : is it a selling tool? Or is it a lead generation tool? Maybe you are not sure? Whichever it is you need to understand the objective and implement support processes to respond appropriately.
Once you have confirmed your preferred approach, it is important that your business is synchronised and aligned to support your customers needs. Make sure everyone in the business understands and is passionate about how you deliver your product or service. Ensure you are able to deliver on your promises: synchronise your sales, production, distribution and invoicing to perform and support your service offer - ensure you have no bottlenecks or issues that can erode the customer experience once an order is placed.
Relationship Marketing Benefits
Part of your marketing effort should be placed upon the existing customer base. It is commonly referred to as relationship marketing. Did you know:
- Acquiring new customers can cost as much as 5 times more than satisfying and retaining existing customers.
- A five percent reduction in the customer defection rate can increase profits by twenty five to over seventy percent depending on the industry.
- The customer profit rate tends to increase over the life of the retained customer.
- It's not what you say to a customer but how you make them feel that creates a lasting relationship.
If you consider the statistics quoted above it makes good business sense to look after your existing customers, what do you do to differently than your competitors to ensure that your customers needs are your number one priority?
Some businesses will increase their inventory or put on new staff to ensure they can cover the projected additional sales; in some instances this may be appropriate, but do your sums and ensure you understand the financial impact before going down this road ,remember it is more cost efficient to improve your processes which also helps you be more competitive than to add additional cost to the business.
In summary, customers are becoming more sophisticated about how and what they buy - it is critical that your business processes reflect the customer's needs by playing to your company's strengths where they align to the customer's needs. Without a focus on customer requirements and the generation of strategies and processes including marketing , increasing customer retention and attraction for business growth will be a major challenge.
Brett is the Managing Director of Fulcrum Business Support and his contact details are below: