If your small business needs a boost to the bottom line maybe it is time to review your sales and marketing strategy and come up with a plan to gain ground on your competitors. A good way to start is by breaking down the term “sales and marketing” into discrete, manageable elements. You end up with a checklist that can be reviewed in order to prioritize areas needing improvement – a checklist that will serve as the groundwork for an effective marketing strategy.
The suggested list below uses examples from a retail florist business to make some points clear.
How much do you really know about your current markets or future market? Why do your customers buy from you? What could you offer that would attract more non-customers? How can you sell to more of the profitable customers? If you add features or services, will people pay more for them or will they attract more customers? Are there bulk, institutional, industrial, or corporate markets beyond normal retail that you are ignoring?
Florist: Have you thought about selling regular weekly arrangements to area businesses, especially car dealers, law firms, real estate firms, etc. at a reduced rate, but with a one year contract for 50 arrangements?
Who are they and what are they up to? What is the overall market trend and how are you holding up in terms of market share and profit position?
How do you really rank against competitors? What substitutes are there to your products and how much of a threat are they?
Florist: If your funeral business is dwindling, what cultural trends (“no flowers” announcements for example) are important here and how can you counter them (such as sending flowers or a fruit basket to the home of survivors, for example)?
Use Competitive Intelligence to maintain and enhance your business’s market share.
How can you get your products/services out to new outlets profitably? Are there unbranded opportunities? Can you bundle in your products with someone else’s?
Florist: Can you partner with service providers for high school proms in the area (photographers, limo services) and offer a one-stop package for young people? This could become a good new sales channel for you.
4) Supply Chain
Are you at the mercy of wholesalers for your raw materials or product components? How can you manage suppliers and gain more buying power over them? Can you simplify your products and reduce your supply needs? Can you buy in bulk and store them somewhere in a cost effective manner? Can you buy some things pre-fabricated cheaper than doing it yourself (or vice versa)?
Florist: Use the internet to locate California-based rose growers who will air freight roses in volume for you and a loose consortium of other florists in your area. They’ll give you greater variety at the standard market rate, versus reduced availability and price gouging during holidays from local wholesalers. Be prepared for friction from them, however.
Where do your products/services fall in relation to the total market? Is this truly the position you want? Are you “all things to all people,” or should you move more toward a high-end position (charging a premium for a differentiated service), or a low-cost position (undercutting others’ prices but at a profit, due to high efficiency)? If you are truly “in the middle,” you should examine how well you’re doing regularly (with the help of a good accounting system).
Florist: Should you consider exiting no-growth “traditional lines” such as church flowers and move toward faster-growth lines such as silk flowers for weddings? Does your shop portray the position you want to be in?
Feel invisible? How can you change your sales and marketing strategy to change this? What promotion tools make the most sense to promote your products yet are consistent with the marketing image you want to project?
How do you know if they pay off? Are you promoting on the internet effectively?
Florist: You have a business website. Maybe it’s time to create a business Facebook page and see if you can reach more potential customers via a Social Media campaign. That’s part of reaching your future market.
What is your pricing strategy? Does variable pricing make sense for different markets, perishable products, or time-based sales processes, or various customer types? Are you charging for everything you do?
Florist: You have Poinsettia prices at Christmas that vary based on the size of the plant. Should you consider lowering prices pre-December 5 (to promote early sales), and raising prices slowly after December 20 (to maximize revenues from last-minute buyers)? Have you ever considered two-for-one sales for holiday plants or a coupon for a spring bouquet for people who buy fresh arrangements in January and February?
8) Service Delivery
How well and how consistently are you delivering/producing your products/services? What people problems must be addressed? Do you really train people in their overall role and mission, not just the mechanics of their job? How do you know your customer service is satisfactory? How can you use disservice situations to build customer loyalty?
Florist: Have you ever followed up with customers who stopped buying (or slowed down buying) to see if there are quality/service issues involved?
What is your capital structure? That is, what are the proportions of cash, bank borrowing, other borrowing, invested funds, and net income to your operation? Do you produce an annual financial report and a monthly cash report? Are there other sources of capital you should look at? Are there cheaper sources for say, bank loans, or do you have access to angel investors or venture capitalists for equity financing?
Florist: As a member of an industry trade group (FTD for example), are there financial services or even loans they can provide that would be helpful? Are you big enough now for a CPA to really review your books and interpret your position?
How can you build customer loyalty? How can you increase sales to existing customers (more frequent use or buys, selling a broader product line to them) or new customers (existing and new products)? How can you penetrate into new areas profitably? What new substitute products are successful at Wal-Mart or other outlets that you have sniffed at as not being part of your traditional business? What costs can be removed without affecting the value equation?
Florist: Summer sales are lackluster; have you considered holding gardening workshops in spring? Maybe bring in lawn and gardening experts to your shop to sell their lawn and garden materials, for a commission to you. This will help you meet your customers who are in lawn and garden shops at this time of year.
What risks exist today and which are on the horizon? What is the likelihood and impact of each? How can you reduce both? Are there alliances that make sense? Are there trade groups you should be in? Are there natural ties that no one is exploiting– like a video store letting people order a video with a choice of pizza from the next-door pizza shop for a specific time? Or letting customers return their videos to a local Starbucks they stop at in the morning?
Florist: Your shop is located in a major city. Identify and contact the more successful caterers and see if there is room for an alliance here, on the premise that you can bring each other in on larger events you provide services for.
What information is your accounting system giving you about profitable lines, costs, and margins? If “none,” why not fix it and start making better decisions? What advice can you get from a trade group or local retail association?
A Cohesive Marketing Strategy Equals More Sales
Obviously this is just a start for developing an effective marketing strategy, but suggestive. It feels good to be able to check “OK” next to some of these, but it should also be empowering to prioritize those few that need your attention.