Category Archives: Professional Consulting

Business Challenge: Managing Life Cycles

Every business goes through cycles, whether the owner cares to admit it or not. Business owners must first understand these cycles exist and realize when their company is entering a new one. The challenge is knowing how to manage the changes required to survive and thrive.

It begins with the start-up phase, where plans are made, products are defined, and strategies are formulated and implemented. This can be a difficult period for the business owner because hopes and dreams are attached to the success of their venture. Failure is a real possibility, but motivation is fueled by emotions rather than clear-headed thinking. From an outside point-of-view, an entrepreneur or potential business owner should stop and think about what they’re doing before getting in too deep.

Have someone look at the financial projections objectively, or consider hiring a firm such as Brand Irons to conduct a feasibility study to clarify the route to profitability. Base your business decisions on cold, hard facts instead of wishful thinking. Emotions can be brought back in with your marketing strategies.

Once the tough stage is behind, the next business phase is either a growth spurt, the transition to a different attack plan when there’s no growth, or closure. Growth is often the easiest phase for owners to manage. It requires adding production capacity, employees, sales people, and other elements that are indications the business is doing well.

The caution in growth stages is to continuously keep on eye on the numbers. Growing your business means adding more revenue, and it also means adding problems tied to that growth. Outside advice can prove valuable in matching projections to actual results and avoiding sugar-coating what may appear to be a rosy picture. Stay real.

As the company grows, business expands to fulfill the demands of the marketplace. There are many lessons where companies tried to expand too quickly and lacked the marketing or infrastructure or management to handle the expansion. Krispy Kreme doughnuts tried an expansion program and had to re-trench, as did Sonic with drive-in restaurants in northern climates. Controlled expansion is far more manageable, despite how strong a management team you may believe is in place to handle it.

One of the most difficult phases in the life cycle of a business for the owner to grasp is when the business has entered a maturity stage. Maturity can be caused by product or service obsolescence, changing market conditions, an inability to adapt to changes, the aging of owners and management, as well as time itself.

When it becomes obvious that a business has reached maturity, the critical decision is determining what to do about it. The major factor to look at is whether the products and/or services are still relevant to the consumer. Changes are needed when you can determine that what you’re doing is no longer relevant.

The logical choice for handling maturity is the next phase in the diagram, which is transition. Transition might involve selling the business, turning it over to a different management team, or implementing changes to adapt to the market’s demand. Keep in mind that maturity is a good phase for a business and may last for quite some time. Successful businesses start out with an end result in mind, making the transition a planned event. Mature businesses should also be considering transition options.

At every stage in the life cycle of your business, you can benefit from the advice of professional business consultants, such as your accountant, attorney, insurance agent, financial planner, and yes, a business and marketing advisor. Their role is to help you make more money and reduce your risks.

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Brand Success: Band-Aid

A key to the success of your brand, or any other brand, is to be first in the mind of the consumer. Do you ask for a facial tissue, or for a Kleenex? Do you ask for a soft drink, or for a Coke? Do you ask for an adhesive strip, or for a Band-Aid?

The 3rd Immutable Law of Marketing is the Law of the Mind, as defined in Al Ries and Jack Trout’s 1994 book, The 22 Immutable Laws of Marketing. Briefly stated, it means that being first in the mind of the consumer is more important than being the first to the market with a product or service. The success of Johnson & Johnson’s Band-Aid brand adhesive bandages is a perfect example of a company owning the consumer’s mind. The Band-Aid brand name today is synonymous with a first aid product, but it is also identified with a method of providing solutions to problems. It has become a common term in everyday language, which solidifies that place of ownership in people’s minds.

How many times have you heard someone identify a temporary solution as needing a “Band-Aid” for fixing the problem? The benefit to Johnson & Johnson is that every time the name is mentioned, in whatever context, it reinforces the brand’s identity in the minds of consumers. The consumer may not know that Band-Aid is a Johnson & Johnson product, but they do know what a Band-Aid can do for a cut, scrape, or other minor injury. The consumer doesn’t ask for a Curad bandage, even though that might be what they wind up using to patch up a small injury. They ask for a Band-Aid.

Owning the consumer’s mind, however, does not excuse Johnson & Johnson from continuing to provide a quality product to customers. That sense of ownership comes right back to the company. Johnson & Johnson’s reputation, to a certain extent, is built on the credibility they’ve established with the Band-Aid brand, and other brands in their portfolio. Johnson & Johnson must constantly monitor quality and sustain the brand’s identity at an exceptional level to continue their ownership of the consumer’s mind.

The success of the adhesive bandage for Johnson & Johnson has enabled the company to diversify and offer other medical-related products to that consumer market. Gauze bandages and a host of other products have found a place because the Band-Aid brand is so strong.

While this may be a great success story, you’re probably wondering what this has to do with your business. Good question.

Your brand may never achieve the level of ownership Band-Aid has in the mind of the consumer, but it could. You may need professional advice, but if you can become the leader in your industry and own a specific category or niche, there is an excellent chance your product or service can become the preference of your customers and others. It takes market research, graphic development, and a number of other pieces to put it all together.

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The Business Mindset

In a previous blog, we wrote about The Consumer Mindset. Now it’s time to turn around and focus on the mindset of a business owner.

Two of the more important elements in operating your own business are: 1) Remembering why you’re in business in the first place; and, 2) Remaining focused on your customers at all times. Having a valuable product or service, strong management, and exceptional customer service are significant as well, but everything else usually falls under one of the two more important elements.

Let’s elaborate.

You probably got into business for several reasons. Filling an under-served niche market to meet a consumer demand or need may have been one of them. Having an impact in the world and making some money might have been the reasons. Some people start a business to fund their retirement or to create an enterprise for their children to take over. There are those who merely want to say they did it and they had the world in the palm of their hands!

Whatever the reason you started a business, or are thinking about starting one, take the time to stop and think about that mindset once in a while. Every six months is a good benchmark for taking the time to reflect on your purpose for doing what you’re doing. If you need to make changes, weigh your options. Think deep about whether it is a change that really needs to be made.

A quick transition to another owner, a fire sale, or a bankruptcy can be traumatic and devastating to your employees, your customers, and to you and your reputation. It is best if you can take the time to think through and plan a transition that benefits everyone involved in the change. Consultants such as Brand Irons can assist with these transitional periods and smooth the waters.

What is also important in the business owner’s mindset is having a mission that is clear and conveys the vision of the company. Owners have an obligation to portray their vision to their employees, their customers, and the public on a consistent basis. That takes constant, open and two-way communication with team members, along with the insistence that the same level of communication is shared with customers and potential customers.

It’s also about setting objectives and striving to accomplish them. It involves being able to make tough decisions without emotional attachment. It means being confident and assertive without being offensive or demeaning. Praise in public and criticize (we prefer instruct) in private is a valuable approach. A pat on the back goes further than a kick in the pants.

Be open to suggestions. An employee on the front line may have an idea that could make you millions. Be generous and share the credit. Herb Kohl, former U.S. Senator and owner of the Milwaukee Bucks, reportedly paid each of the employees of the facility where his team played $500 for their dedication to the team.

When your purpose is clear, your service to your customers also has clarity.

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Market Segments

Let’s start with defining market segmentation.

First, your “market” consists of the people who need your product or service and the people who want your product or service and are most likely to purchase it from your company. Rare is the company that has products or services needed by “everyone.” Manufacturers of toilet paper are one exception that comes to mind, but when you think about it, infants and children still in diapers are not “customers” in the sense they can make a purchase, and they don’t need toilet paper yet but that’s okay.

Second, market “segmentation” is a method for dividing up your potential consumer base into various, well-identified portions for the purpose of appealing directly to that group. An obvious differentiation is between female and male consumers. If your company manufactures and sells high-heeled shoes, women are going to be your strongest market segment.

Considering that group of consumers, it is likely you can further define your market into age-related segments. Things constantly change, but high heels are less likely to be worn by females under the age of 15 and those 65 and older. There are exceptions, of course, but what this tells you when it comes to marketing is that you are likely to have fairly well-defined market segments: Women in the age groups of 15 to 24, 25 to 34, 35 to 44, 45 to 54, and 55 to 64 or similar delineations.

Rather than belabor the example, let’s get to the point. The more narrow you can define your market segments, the more concentrated your sales efforts can be on each of those segments, and the greater your likelihood of success in expanding your market share in certain segments.

As professional business and marketing consultants, defining a customer’s market segments is one of the primary steps in developing an effective marketing strategy to build a company’s brand. Advertising can be expensive, especially if the return on that investment is questionable or, shamefully, unknown. Why would you market high heels to a male audience? Or in a Super Bowl commercial? Think about what makes sense.

Where the challenge lies is in determining the buying characteristics, or what we refer to as customer buying motivation (CBM), of each market segment. Why would women in the 25 to 34-year old age group buy high heels more frequently than those in the 55 to 64-year old segment? If you find it is job-related or as a need for social status, you have narrowed the potential appeal for your shoes to that age group.

The next step, and where professional help can prove valuable, is determining which delivery vehicle is best for conveying your sales pitch to that demographic audience. In conducting research, you might discover (as we have) that women 25 to 34 may have a favorite TV program but they use the Digital Video Recorder (DVR) to fast forward through the commercials. The challenge, therefore, is figuring out how to reach them with a message that encourages or convinces them to buy from you and become loyal to your brand.

We’re here if you need help with any of this.

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The Relevance Check

Every so often, business owners need to stop and check on their relevance in the world. It is far too easy to become complacent and consumed with our daily activities while ignoring our pertinence to the world around us. We think, like Mighty Mouse, that we can save the day because we’ve been there before or we know the answers … without even listening to the problem or trying to ascertain what it might be.

Business owners can have a tremendous impact in many areas of our human existence. You’ve surely heard the story of the shoe company owner who donates a pair of shoes to poor children for every pair his company sells. That has relevance, especially to the indigent young people who’ve never had shoes to wear, and we’re sure it makes the employees feel good about their ability to make an impact on the planet and people’s lives.

How many business owners sacrificed profits to keep employees working during the difficult economic times over the past several years? Quite a few, and that had relevance to the workers who were able to benefit from that generosity and keep their families fed.

The guide to relevance is through soul searching. Profits are certainly important; a business cannot survive without profitability. However, it is when profits become the sole motivator for business operations that the concept of greed enters the picture. It’s the gypsy mentality about taking money from other people however you can so you can enjoy a more lavish lifestyle.

Consider how relevant you are to your employees. Do they respect what you’re doing and follow your vision with a strong sense of belief? Or do they just show up and do their job, or the least that’s expected of them? Do they even know what’s expected? Even though you may have the best products on the market, your employees are the real asset to your company.

Think about your customers and how relevant you are to them. Do they need you, your products, and your services? Do they value what you offer, or are you just a commodity they need? Do they believe you treat them well? Could they purchase what you offer from someone else?

These are simple steps you can take to assess your relevance, and companies like Brand Irons offer assistance to help think these things through and assess where you are. One of the more important steps in the evaluation process, and often the hardest to face, is the self-evaluation. Are you doing what you truly want to do? Does it make an impact on the world? Are you happy going to work every day, or is it drudgery? Do you have time for your family, and do they appreciate the time you spend with them?

How relevant are you?

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5 Trade Show Tips

Spring is often the time for trade shows and business expos. If your business participates in trade shows, it’s important that they are successful, so here are five suggestions:

Tip #1: Define the desired success from your company’s participation in the trade show. Do you want x number of qualified leads for your sales team? Do you want to build brand awareness within your industry? Do you want to sell x number of units?

Tip #2: Be realistic. Having goals for participation is essential, but keep in mind that there are variables beyond your control. If publicity for the event is lacking, attendance may be less than expected. A popular keynote speaker may draw attention away from booth time. A concept some exhibitors use is to set an objective, then cut it in half and be happy with half of that.

Tip #3: Be prepared. Understand the event and anticipated attendance. Do you need 40,000 brochures if the event organizers tout that there will be that many people coming through the doors? Only if you want to waste a few thousand brochures. Know set-up and take down time frames. Will you promote your appearance at the show ahead of time? To what audience? Have you thought through how you’re going to follow-up with any leads you may get? Are you going to have items to give away? Who will be staffing the booth? What does your display look like, and does it need to be updated? Planning for the little things prevents them from becoming big things during the show, like Internet access or power for your computers. Have you booked travel and lodging for your staff?

Tip #4: Respect the event. How will your company look if a sales rep who’s staffing your booth is constantly checking E-mail or sending texts to someone while she’s in the booth? Or he’s eating popcorn while potential customers are walking by? There are proven methods for success in staffing a trade show booth, so it’s wise to review those with staff prior to the event so they understand what’s expected.

We have found one of the most successful methods for staffing an exhibit is having a customer in the booth, either with your sales personnel or by themselves. Think about it. Does a prospective customer eyeing your booth want to talk to a pushy sales person? Or would they prefer to discuss your products and/or services with someone they recognize who happens to be one of your customers? Contact Brand Irons if you have questions on how to make this work for your company.

Tip #5: Follow Up! This may be shocking to some, but statistics from various surveys indicate that roughly 75% of leads generated at a trade show are NEVER followed up on! Following up on leads is an essential part of the planning process. Be prepared to dish out the leads to sales reps and monitor their progress. Keep in mind that the people who stopped by the booth are expecting some kind of response, and represent potential sales.

Do the math: If you’ve spent $5,000 to exhibit your company at a show and receive 250 somewhat qualified leads, that represents 250 potential customers for your products and services at whatever price point you use. Let’s say it’s $1,000 in business for every new customer. That’s potential revenue of $250,000! If your company only follows up on 25% of those leads (62.5), you’ve reduce the revenue potential down to $62,500. Something to think about.

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What’s Your Value Proposition?

What good are you?

That’s a fair question for any business if it’s coming from a consumer. Tied to that question is: What makes you different or better than any other company that does what you do or offers the products and/or services that you do? That is a rather common query from today’s consumer.

What makes you different?

Consumers have a lot of choices when it comes to virtually any product or service on the market. They can shop online, weigh the variables, and make their decisions based on whatever information they can find, good or bad.

This is why your value proposition is essential.

Some marketing gurus call it your unique selling proposition (USP), and that’s close, but it really boils down to knowing your specific target audience (market segment) and the value your product and/or service provides to that specific target market. That’s a value proposition.

Let’s look at this from the perspective of a company that manufactures ceramic coffee cups. The range of consumers for their product could include companies that retail sets of dishes to consumers, companies that produce promotional gift items for businesses, tourism and hospitality-related businesses, and the general consumer.

Is the same value proposition valid for each of these market segments? Hardly.

When we dig deeper, we discover that the value provided by our ceramic coffee cup manufacturer to the promotional market may be an average quality cup at an economical price point. Add a short turn-around on delivery to the promotional company or the ability to print or etch the consumer’s message on the cups and turn them around quickly, and the value to the promotional company rises considerably. Add a variety of colors or different sizes and shapes and the value goes up even more.

The concept of a value proposition goes to the heart of your business. What consumer markets do you, or do you want to, serve? It is vital to know your consumer segments because the value they expect is what your company must deliver in order to meet or exceed their demands.

Weigh what you offer in terms of value, not benefits. That means you have to look at what you offer from the consumer’s point of view. You think of what you offer as a benefit to the consumer, where they need to see it as having value for them. Define the value clearly; again, from the consumer’s viewpoint. Determine how best to deliver that value message to the marketplace to earn your share of the business that’s out there.

If you need help figuring this all out, Brand Irons is here to do that, and the initial consultation is offered free of charge.

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Read This Now!

If you don’t read this entire article now that you’ve started, you will miss valuable information about how to get someone’s attention. Yes! That’s the purpose of the headline and this blog – getting people’s attention. And yes, we’re revisiting the topic.

Headlines are attention getting devices (AGDs) in print ads or newspaper and magazine articles. So is an opening scene or theme in a TV commercial or video and the initial sounds in a radio spot, TV commercial, and video. With the average person being bombarded by more than 2,000 advertising messages every day, it is imperative that any advertising you do for your business stands out from all the rest.

You also have to realize that the more targeted your ad messages are to your desired audience, the greater your chances of inspiring a positive purchase decision.

Some commercials are so horrible they stand out because they’re atrocious. Others are fabulous in that they grab a consumer’s attention and keep it until the end. If the commercial has the intended impact, it creates a sense of urgency with the consumer to go and make a purchase. That’s the intent of an AGD and the commercial, is it not?

Think about a majority of the drug commercials on television today. They try to get your attention by highlighting an illness or symptom, using 10 seconds out of 30 to explain what their product can do to resolve the concern. Then, based on the federal regulations, they spend the remaining 20 seconds telling you the potential side effects. Do these spots keep your attention after they get it, if they get it?

Knowing your target market segment is critical to developing an effective advertising and marketing budget. You are likely to waste money if you advertise to potential consumers outside of your target demographic. That’s another blog, though, and often unavoidable since advertising channels (newspaper, magazines, radio, TV) have to lump people (potential buyers) together to get you to buy their space or time.

Let’s consider a relatively new commercial campaign for a fast food restaurant that has decided to launch a breakfast menu, Mexican style. The belief is that their target audience is consumers who like to eat breakfast at the dominant player in the fast food breakfast market. The attention getting device showcases men claiming to be Ronald McDonald who love breakfast at Taco Bell. We asked consumers who were discussing the commercial which fast food company paid for the ads. In shades of Wendy’s “Where’s the Beef?” faux pas, the majority were unable to identify that it was Taco Bell.

Think McDonald’s is going to complain about the commercials? Hardly! When you study the 30-second commercial, Taco Bell is mentioned once outside of the actors’ lines and the logo appears twice … but Ronald McDonald is mentioned over and over. One might think it’s a commercial for the golden arches.

In other words, be careful about your attention getting device. Take the time to think things through. We noticed Taco Bell now has some different commercials focused more on their breakfast entrees than on their competition. Agencies don’t always have the right answers, and mistakes can be costly. Know your market segment!

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Starting With The End In Mind

In many aspects of business today, it is good advice to plan with the end in mind. That also applies to starting your business, and why a professional feasibility study can identify if the end you have in mind is realistic … and viable.

A basic example: Let’s say you have an idea for a product that fills a niche currently under-served or non-existent in the consumer world. Your goal is to start the business, establish the product in the market, grow sales volume, and eventually sell the business off to a major company at a $500 million dollar or higher price point.

Seems like a great idea until you’ve invested thousands of your own money, borrowed as much as you can, and guaranteed thousands more, only to discover that some other company beat you to market, sold “your” invention to the corporation you were thinking might buy yours, and already has the lion’s share of the consumer market locked up.

You’re forced to find alternative markets, retool a different product (if you can), changing your “end result” objective, or filing for bankruptcy. You may have wasted your life’s savings and possibly those of other family members as well.

A feasibility study can provide you with the research and the perspective, along with the financial data to avoid such disasters. When you engage a professional firm such as Brand Irons to conduct a feasibility study, it is important to share your end result up front.

Knowing that your objective is to serve a need is critical to establishing a viable business model. However, knowing what you want as the end result is the element that provides you with the driving motivation to build your business.

One of the most vital, and often discouraging, revelations identified in a feasibility study is the learning that the business concept has only a marginal commercial viability. This is discouraging because it often crushes the dream of someone’s idea. It is also vital in that it dissects and reveals the inherent flaws in the concept.

An example: A client wanted to create and build an elite level indoor skateboard park in a large city’s suburbs. The rent for the space requirements, the cost to build the custom-designed facility, and the operational expenses were all upper end. What the feasibility study revealed was the inherent flaw: Skateboarding enthusiasts prefer to be outdoors when they can and they don’t like to spend money to skate!

More on this later, but consider a feasibility study for your business idea. Whether it’s for starting up a new venture or expanding an existing one, take the time to think things through. If it’s a good, viable idea today, it should still be feasible in a month or two.

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The Little Things

Imagine driving a luxury car that gets outstanding gas mileage, handles like a hot knife through soft butter, has the speed of a cheetah, and looks like a museum tribute to automobiles. You admire it parked in your garage, love how it drives, but then realize it’s uncomfortable to sit behind the wheel. The seat somehow feels awkward and whatever you do, you are unable to adjust it to be comfortable. Do you keep the vehicle, or trade it in for a ride that’s more comfortable?

Little things can make a big difference when it comes to vehicles. In business, little things can also make a big difference when taking care of your customers.

You may have the best product on the market. Your management, production, and sales could be the smartest, fastest, and highest caliber teams on the planet. Yet a simple thing like how your company is perceived on a social media website could be devastating to your bottom line. Some might say your social media presence is far from a “little” thing and we might agree … but in the grand scheme of a product’s life cycle … it could be argued that it is relatively minor if a comment quickly fades, but a deeper crisis or impression that persists can wreak havoc.

Consider the example of a large, globally recognized company that offers a variety of products and, in most circles, is highly respected and trusted by consumers. Mix in the company’s choice to make itself virtually impossible to contact for problem resolution and where does the consumer’s trust level go? To the bottom! Is it a little thing? Other corporate giants might feel the strategy is a stroke of genius, minimizing consumer contact and reducing staffing requirements. With a consumer-centered mindset, however, that little thing looms large in the long-term success equation for the company.

Little things matter. Minor details can be crucial to the success of a business and its products or services. Is setting a table with a dirty spoon all that bad in a restaurant operation? Yes! A health inspection could close the restaurant. A consumer might overlook the “little” thing, but they’ll surely ask for a replacement, inspect that replacement piece of silverware closely, and be suspicious the next time they visit that establishment, if they ever come back.

From your perspective as the business owner, how much extra time does it take to make sure the silverware is clean, in light of the impact it may have on your long-term survival? There’s a familiar saying: If you don’t have time to do it right, when will you have time to do it over?

Another real life example: We checked a candy bar’s expiration date on a recent visit to a convenience store and found it was a month beyond its “Sell By” date. Checking the entire box, we found the same date throughout. Even though we did purchase a different candy bar, we took one of the expired items to the check-out counter and pointed out the expiration date to the clerk. While the clerk was grateful, she was also astonished and admitted that the candy vendor had just been in the store!

It’s the little things. Was the vendor negligent, or simply trying to move expired product to unsuspecting consumers? How much would that unsuspecting, yet trusting, consumer have had to pay if he’d broken a tooth eating a hardened, out-of-date candy bar? Potential for a lawsuit?

Think about your business and your products and/or services. What are the little things you overlook that may be huge in your customer’s eyes? Take care of them by making them “big” things. When it comes to marketing, everything matters!

Brand Your Work – Work Your Brand