Small Business Marketing For Sales Growth

Most small business owners would agree on the need to have a plan for sales growth. Yet far too many small businesses rely on “sales effort” and far too few establish appropriate marketing strategies for sales growth.

Most marketing experts suggest three marketing strategies that are open to all businesses, large and small:

o The least-cost strategy. Using this strategy, a company competes by selling uniform, standard products. Market demand for these products is usually highly elastic. An increase in price triggers a sharp drop in sales volume because (1) demand is low, supply is high, or (2) there are plenty of competitors who can supply substitutes. Buyers expect price concessions, which naturally lead least-cost firms to emphasize production at the lowest possible per-unit costs.

o The differentiation strategy. A company using this strategy attempts to offer unique products that are set off from the competition by superior quality or service. Market demand tends to be inelastic (that is, sales volume doesn’t vary in proportion to price). Goods are priced well above production costs. The company that pursues a strategy of differentiation must invest heavily in product development and innovative packaging and promotion. And it must stay closely in tune with customers’ changing needs and desires.

o The niche strategy. Using this option, a company sells a premium priced product or service to a few buyers. Unit costs are high because output is low and costs such as labor or research and development may be great. Brand identification and customer loyalty are the keys to success.

In adopting a marketing strategy, most small businesses should opt for the differentiation or niche strategy, or a combination of the two. The least-cost strategy is the least successful for small companies. There’s a simple reason why: production costs.

A company’s production costs tend to decline as it accumulates experience in producing the product. How much production experience a company has the opportunity to acquire depends on its share of the market. The larger its market share, the lower its costs.

Therefore, the dominant competitor in a market is in the best position to pursue a least-cost strategy. It can and will shave profit margins to drive out competitors who can’t compete on price. The market leader is assured that the more it can produce and sell regardless of price, the lower its cost will go. So, the least-cost strategy is usually used by very large companies that have the resources to dominate a particular market, local, regional, national or international.

A clear message here is to stay out of areas where there already is a dominant market leader unless you’re prepared for a costly business battle. That means building on your business’s own experience, pushing its competitive edge to the limit in an effort to become the dominant competitor. You can do this by:

o Developing a new product;
o Differentiating your product to appeal to a segment of the market where you have the most experience; or
o Finding a niche in a highly fragmented market where there is no clearly dominant competitor.

When developing new products, stick to your strength. There may be a virtue in staying small, at least in one sense. For one thing, contracting for a service may be cheaper than doing it yourself. Aside from that, each distinctive business function has its own little tricks, short-cuts and hidden pitfalls. In starting a function from scratch, you are committing time, money and capital to an area where competitors, because of their greater experience, may have a clear cost edge.

It’s a common story these days that new, high technology products are no sooner brought out of the designer’s “garage” than they are an instant hit in the marketplace. A production facility is quickly put together and business blossoms-until a larger competitor swoops down with a copycat product and takes the business away.

The cause isn’t just the predatory nature of big business. Often, the designer’s experience in research and development doesn’t carryover to functions that are vital to success in a competitive market: sales and marketing, distribution and financing. The new business can’t come close to matching the larger firm’s experience and proficiency in these areas. And this gives the larger firm an insurmountable edge in the marketplace.

You should consider an alternative strategy: If your business is good at R & D, consider joining with a business that is good at production, sales and marketing. If you have the edge in one geographical region, join with a business that has strong national marketing and distribution channels. Above all, concentrate your resources where your experience is greatest.

Another avenue to sales growth is differentiation. Break away from the pack and make your product stand out from the competition on the basis of superior quality and innovation. Your objective is to maintain the unique appeal a product has to quality-minded consumers. At the same time, look for ways to make carrying your product more attractive to wholesalers and retailers as well.

Profitable niches are often found in markets where there’s no clear industry leader. For example, Enterprise Rent-A-Car built the world’s largest rental car agency by specializing in “wreck replacement” rentals. At the time, the market was under served and there was no clear leader for the service. But finding the appropriate niche can take patience. And once you find it, it’s vital to cultivate customer loyalty and confidence.

4 Ways to Energize Yourself and Your Business

At the start of this decade no one was waiting around the office at midnight dreading to see if the electric grid crashed, if computer-based machinery stopped, or society fell into chaos due to Y2K as we did ten years ago. Yet, I still witnessed people dreading returning from their four day weekend to the daily grind that chewed up many businesses and their leaders last year.

To revitalize a company the leader must first be revitalized. How can you revitalize yourself when the economy is still down, people still seem to be in a negative mindset, and the future is quite unclear? With these four action items you can re-energize your vitality as a leader and once again set a positive tone for your staff to follow and vicariously become more energized themselves.

1. Get a reality check

I’ve heard it said many times; things are never as good as they seem and never as bad as they seem. 2009 seemed to be a pretty bad year for most organizations. Many executives just gave up in the fourth quarter and started focusing on 2010. In retrospect, 2009 was filled with lessons. Step back from the pain and frustration of 2009 and make a list of lessons learned that can help you in the future. We all learned last year, in some cases it could be what not to do. However, aren’t those some of the best lessons to have?

2. Make a plan

Free-wheeling is no longer an option for leadership; nor is sticking directly on a plan. Flexibility within a plan is different than free-wheeling in that you have a clear understanding of destination and the ability to make adjustments. Do you have a written plan for this year? Do you have a written plan for your personal life? I’m not being pollyanna here, I know you don’t suddenly wake up one day and life is all rosy. The business side of life is still going to be a climb up the mountain, but your personal life can be a great source of energy fueling that climb. Have a personal plan as well as a business plan.

3. Find inspiration in your personal life

People are still going to reject some of your sales efforts, companies are still tight with budgets, and the country still has a ways to go before we are into positive growth. In other words, business is still going to be a challenging environment. That is why I set 50 personal goals for the year (to go with my 50 professional goals for the year) because I know I get inspired in my personal life. Who inspires you? What inspirational friends do you need to spend more time with? What friends do you need to avoid/drop/move on from? If you aren’t being positively impacted by your friends, you are losing energy that is needed to fight the business battle. Find inspiration.

4. Try something completely different

How many times last year, did you ask people to give you more, hammer them for not doing their jobs correctly, and generally focused on the negative aspects of the business. Try something different this year. Become solution-focused instead of blame-focused. Be proactive instead of reactive. Look for innovative approaches instead of cutting budgets and doing less of the same that wasn’t working in the first place!!!

Pushing an elevator button repeatedly does not make the elevator arrive any quicker. I think we fall into this type of behavior frequently when times are tough. Get real about the positives, find solutions for the negatives and get energized to lead. Because it is the beginning of a new year, now is a great opportunity to refocus, reinvent, and reenergize yourself and your staff. Get pumped to make a difference this year.

8 Business Pitfalls to Avoid

How can you increase your chances of achieving business success? By winning the lottery or inheriting oodles of money? Whether you are an established entrepreneur or you are just starting out in business you need to realise and accept that there is no quick fire road to success.

However when you take steps to avoid the cracks (pitfalls) in the footpath you stand a better chance of paving your way to business success.

Here are the 8 Pitfalls to Avoid:

  1. Success Breeds Success. Do you think you know everything about business? Have you realised yet that you don’t have all the answers? Become an effective and profitable business by seeking advice from people who have already achieved great success. Let’s face it they have done the legwork. Connect with highly successful achievers and absorb all the experience and knowledge you can.
  2. How Big is your Vision?Did your business start out as a small idea? Has your small idea grown, changed or evolved? How much impact is your small idea making toward to future? Think big from the start. See your business at varied intervals – five, ten, twenty years. Ask yourself – What do I want to achieve and How will I be remembered? Believe in your vision and make it happen.
  3. Who is your Market?Before you rush headlong into your business you must research your market. Never assume that you know who your target audience is or what they want. Assume and you may miss the biggest opportunity of your life. Understand what your market needs and adapt as your business grows.
  4. Don’t Ignore Social Media. Not entered into business battle with social media yet? Admittedly social media is the talk of the town – it’s in the moment, right now. But is it necessary for my business you ask? Quite simply yes. Social media used in a targeted way can be a very effective marketing tool. Learn how to use it and choose what suits you best.
  5. How Do People Get to Know You?Your brand is your reputation. Your brand is your personality. Your brand is what others think of you. What does your brand say? Make sure your brand meets with your standard, your expectation and delivers the identical message and service to each and every client you do business with.
  6. Look after Loyalty.Heard of the 80:20 rule? That 80% of your work comes from 20% of your customers. And who are these customers? Existing, loyal people who have established a long-term, ongoing relationship with your business. Don’t overlook these people and only focus on attracting new customers. Stay in touch with them and show your care and appreciation for their loyalty.
  7. Improve your Business.Ask for feedback. How else can you manage any issues that arise? How can you change if you don’t even know there is a problem? Or do you think that you are doing everything right?Request honest feedback at random intervals or as standard with all new customers. Learn, improve and achieve better results.
  8. Plan your Finances.What is the main reason why most businesses fail? Poor financial planning and negative cash flow. Start your business with a plan, follow your plan, adapt your plan, and watch your business thrive. Manage your money well; over-estimate your expenses and under-estimate your income. Surely you’d rather have more money than not enough?