In our experience marketing for businesses, clients have asked us to help bail out their struggling companies and help them return to their heyday. We have learned many lessons through these experiences; here are the top 3 things these experiences taught us.
1. Know your business model.
Without exception, each business that has approached us because they suffered declining revenues did not realize they had fundamentally changed their business model over the years.
If you accidentally stumble into your business model, you can as quickly swap it without understanding the impact it will have. For example, if you rely on live events to sell your product and inspire word of mouth, reducing your number of appearances per year will likely reduce your sales. If you rely on significant ad spending on TV, switching to all internet marketing may save you money. Still, it will also vastly change your target audience (statistically, from an older audience to a younger audience).
Lesson: Plan your business model before you launch. If you are already in business, determine and codify what is working. Then, when you make changes, you can measure and understand what is happening.
2. Conserving your resources feels smart but isn’t.
Most small to medium businesses start to cut capital expenditures as soon as they notice a decrease in revenue. Just as schools cut arts programs first, companies tend to reduce marketing costs. It is lesson #1’s companion; they don’t know what marketing efforts are working and which are not, so they make the wrong cuts.
You may want to increase, not decrease, spending soon after business slows. When you react early, it is more comfortable, and merely being proactive makes a difference.
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Where to put your money? The investment will differ per industry, but there are some basics.
- Keep your team happy and motivated.
- Focus on customer-first service (not necessarily customer is always right).
- Put good money supporting the message of why you make a better mousetrap or how you are better at helping people use it (new website, new content, video, a new way to connect to customers or service your product).
- Build credibility.
- Tell your story and make people care.
Lesson:
- Go down swinging.
- Measure results judiciously so you can conserve in the right places, but give good ideas time to work.
- Think about marketing what sets you and your product apart.
3. You Don’t Need to be King!
If what you’re doing isn’t working, listen to outside help. It’s incredible how frequently, in declining businesses, the decision-makers keep their crown securely on their heads (and, more accurately, a scepter in their hands). If they take outside advice, they put their spin on the fundamental elements of the decisions. The problem is that for change to occur, something has to change. Not groundbreaking, but true.
If you are a decision maker (or the crowned ruler), and your business and revenues are down, let someone else wear it for a season. Choose someone or assemble a team you trust and give them space to make waves. You don’t have much to lose; it will not be forever, and you will likely learn a lot in the process.
Lesson: Pass your authority to others when more of the same cannot help turn your business around. Don’t be afraid to try this as a technique to transition from one stage of your business to another, even if times are not desperate.
