What’s Your Company New Year’s Resolution?
Make more money? | Close more deals? | Increase profits?
Whether I am advising early stage start-ups or mature companies on their marketing strategy and planning, I always start with easy questions. One of my first questions is always, "Who is your target market?"
Surprisingly, for many companies, this question is difficult to answer. I had one CEO speak around the question for about 3 minutes before admitting, "We're open." My response, "You could have led with that."
Next, they show me their marketing materials, and I attempt to 'guess' what their company sells. At one meeting I said, "You provide services in exchange for money." Response from the company co-founder, "Yep, that's us."
It's so tempting to cast a wide net and let your customers lead you down your path to success, but that's not really how it works. I'm sure I'll get responses that strategy has worked well for them, but it's not a sustainable model.
First of all, making more money is NOT a strategy. Closing profitable deals is not a strategy. Profitability and closing deals is the desired outcome of your strategy.
Here are my tips for setting strategy and achieving your goals in 2017 and beyond.
- Do your homework. Know your market numbers at the macro level and the drivers at the micro-level. Understand your audience from Total Addressable Market to CAGR, but don't forget to interview individuals to understand nuances. I once spent hours debating with a business owner about behavior patterns of young mothers before realizing that everyone in the discussion did not have biological children. I suggested setting up focus groups.
- Solve a problem for your target market and explain why you do it better (and in most cases cheaper) than your competition. Don't be a solution looking for a problem. I see this on Shark Tank constantly. If the Sharks see a solution that is better AND cheaper, they start fighting over the deal. Case in point Pitt Moss - http://www.inc.com/graham-winfrey/how-pittmoss-got-600000-from-mark-cuban-and-two-other-sharks.html
- Customer acquisition is becoming increasingly competitive and insurmountably difficult. Consumers are protecting their data and companies are all about creating efficiencies which means doing more with less people. Set realistic customer acquisition costs and understand your road to profitability.
- Setting a strategy also means letting other things go. PRIORITIZE your resources. At some point you'll realize that you can't go after every deal. That's where a clearly defined strategy that your employees understand is essential. Let your employees drop things that don't contribute to achieving company goals so that they can focus on executing what matters.
I recently met with a consultant that said his clients were great at setting strategies but terrible at execution. Was the strategy effectively communicated to the employees? Were the employees allowed to "drop" non-strategy items, or were they stretched so thin, they didn't get anything done?
Don't try to make every deal / decision / expenditure to be a profitable endeavor. Ever heard of 'loss leader'? That's when you price your item below cost for customer acquisition and profit on other items. Walmart customers would enter the store for deals on diapers and over-the-counter pills, but then purchase high-margin clothes and toys.
Make your resolution this year to be laser focused on your strategy. If your strategy isn't working, don't be afraid to 'fail fast' and pivot your strategy based on market trends. Keep your customer first and foremost, and treat your employees with respect. Do this, and the money will follow.