One of the most influential thinkers and writers on the subject of management theory and practice, American Peter Drucker, once said that “great business is made up of only marketing and innovation”. However, many SME’s, see marketing as no more than an add-on function that can be dropped when things aren’t going so well.
The extent to which marketing is misunderstood and undervalued by the manufacturing and industrial sectors is demonstrated by the fact that many, if not most, small businesses, combine the roles of marketing and sales in the shape of a Sales & Marketing Manager/Director; A position which is in fact at odds with itself.
The marketing function, if done correctly, is to focus the business on meeting the needs of its target customers, on the other hand, sales are trying to get the customer to match the product they are selling. Put another way, sales does one function within the business, whereas marketing should have an influence on every area.
· Developing the products that solves customers problems
· Ensuring the correct pricing strategy is adopted
· Making sure the products are readily where and when customers want them
· Establishing a customer support service before, during and after sales
· Promoting the product in a way that convinces the customer that it is not only the preferred choice, but is in fact, the only choice.
The first four bullets above come under what is known as ‘Upstream Marketing’, a process which asks fundamental questions of a business. Which markets does the business want to work in, how much of those markets are available to us, which products does the market need, what features, price, experience etc. and what will give us a competitive edge? The questions that make the difference between success and failure or at least mediocrity.
As we emerge from recession there is a case for saying that competitive advantage should be the main topic of conversation in any boardroom and giving marketing its key role is the way to make this happen.
But what about resources? How much should you invest in marketing?
Please note that I say marketing not advertising
As a percentage of revenue, recent surveys suggest that packaged goods spend between 4% - 10%, retail 2% - 5%, car manufacturers 2% - 3.5% and professional services at the top with at least 15%. In comparison, many SME’s spend barely 1%. This lack of investment kills any chance of creating that all important competitive edge.
The question SME owners will ask is “what will be my return on investment”? That of course depends on the strength of your commitment. However, a better question would be; In five years’ time, where will you be in relation to the competition if you continue to treat marketing as an add-on that can be dropped whenever costs need cutting?
David Hassell DLH Marketing
Let me first say I am not a photographer (apart from some amateur stuff) and I am not associated with a photographer. However, as a marketer, I am concerned with image and perception. It's for those reasons that I always advise clients to use a professional photographer rather Jim the enthusiastic amateur in accounts. Using a professional doesn't have to cost thousands, but it will probably save thousands in lost revenue.
To illustrate the point, let’s take something we are all familiar with – the take away and fast food menu. We’ve all seen it, whether pushed through your letterbox or above the counter at your local take away. Poorly lit, out of focus pictures of plates of food meant to entice you, when in fact they are more likely to make you question the reason you walked through the door. Then you have the photos taped to the window showing you the deal of the day which is printed on a piece of white paper, fresh off the inkjet printer in the back office, and seems to be one cartridge short of full colour. These are obvious attempts by the owner or manager to save money but the product, i.e. the food, ends up looking totally unappetising with the result probably being lost custom.
The same is true whatever product you sell. Look cheap and expect customers who haggle, portray quality and expect customers who value quality. It’s no coincidence that Rolls Royce and Bentley never leave photography of their cars to chance.
Going back to fast food, take a look at how one of the market leaders, McDonald’s, makes sure you expect the best in fast food.
Have you ever stopped to think what your name says about you or even if it actually represents what you want it to? Moreover does your name speak to your customers and convey your products message?
A simple example to illustrate this:
We all assume (I think) that Vodka is a great Russian export. Consequently most Vodka has a Russian or East European sounding name to reinforce the message.
All very Cosak sounding you’ll agree. However, only one of the above is made in Russia, Leningrad to be precise and that is the last one Stollchnaya. The others are made in the USA.
A name can say a lot about the product it represents, make sure you get it right. Spend time doing research and holding focus groups before you finalise something.
We have all been to networking events and experienced a designer standing up to say that they can help create our branding. This got me thinking about how much the average micro or small enterprise really understands about the whole concept of what a brand really is. Branding is much more than your logo and strapline. It is an ethos that should be reflected throughout all aspects of your organisation. The well known saying that ‘your people are your most important asset’ is no accident. They should be well trained and informed in representing your brand particularly if you operate in the service sector where you don’t have a tangible product.
A brand is the successful integration of several key components, e.g. company ethos, customer interactions, employee communications and marketing efforts. It extends outwards touching employees, customers, suppliers, the media and the general public. Inconsistency can fatally damage you; consistency can drive sales and help you flourish. Your brand will add value in the eyes of those wishing to establish partnerships with your business while potential investors will see you and your brand as a valuable investment opportunity.
Employees who don’t deliver can soon damage a carefully built reputation, whereas employees who understand your brand values and consistently deliver them can have a significant impact on growth. You would think that in an age where customers can instantly give their opinion to thousands, organisations would have realised the importance their staff play in customer relationships. They are the key touch point in the whole sales process. And yet, walk into many a high street chain store and you will experience that even here the message is not getting through. An experience with sales staff can destroy the £millions spent on advertising and marketing.
Establishing a philosophy that guides how your company operates is the first step to reinforcing your brand among your employees. A great example of this is the Ritz Carlton Hotel chain. They have created the following five “Gold Standards” for their business operations to reinforce the brand and detail an employee’s role in delivering on this brand:
Be sure to follow through on your brand promise. If part of your brand is based on being a caring employer then you have to be seen as just that. For example part of the stated brand values of a major US retailer states “We believe that one of the keys to our success is our people and how we treat them”. However, the company has been the subject of unfair employee wage practice lawsuits. Hardly consistent!
To ensure brand consistency, it is important that your organization establishes a framework or set of brand guidelines for all to follow. Here I am not only talking about logo or corporate identity guidelines, but actual brand guidelines that communicate the brand positioning statement, key messages, core values, brand attributes, measures of success and processes for handling customer issues or feedback.
Finally, particularly if you operate on an international basis or are internet based, you must also consider how cultural differences could affect your brand. Words and phrases in the UK might not translate to the same meaning in another country. What customers value and perceive as positive here may be interpreted in a very different way abroad. It is your responsibility to ensure that your brand can transcend these cultural differences, if they are to have real geographical reach.
The Brand extends well beyond your marketing efforts. Your brand is only as good as the people behind it…and the people in front of your customer. Think and take the time to effectively build a corporate culture that reflects your brand. Train your employees to represent that brand. Evaluate your consistency in delivering your brand across all aspects of your business. By doing so, you will strengthen your brand value and position your organisation for greater success.
David has worked in advertising and marketing services for 30 years both client and agency side. Having worked with local, national and muliti-national clients, he set up DLH Marketing to help small organisations, owner managed businesses and those organisations without in-house marketing.