The easiest companies you’ll ever market (& sell) to are…

Today we have a guest blog from Elizabeth Andreini:

The easiest companies you’ll ever market (& sell) to are…your customers of course! But yet that seems to always be the group that gets the least attention by marketing (and sales). Don’t make that mistake!

Not too long ago I found myself at a company that was suddenly agitated because their customer retention rate unexpectedly dropped by almost 10% in a single year. Customer subscription revenue was a significant part of their total revenue, and actually had more impact than new customer revenue, so the impact to the bottomline was significant. The company hadn’t been paying attention and consistently marketing to their customers because they had been so busy chasing new business. Once the revenue started to drop it took them a while to respond, and by that time the damage was done. While they couldn’t have saved all those customers, neglect had taken its toll.

An unfortunate story and a hard lesson learned.

Once this company started to look at their customer base more thoroughly, the other lesson the company learned was that it was not selling new products and services to their customers, many of whom didn’t even know about other solutions available to purchase. The business was not only losing current revenue, they were leaving new revenue on the table! While retaining your customers is important, what is often even more frequently overlooked is that these same customers are the most fertile ground for new sales.

Your company may not be in that same situation, but are you doing the best job you could to stay in touch with your customer base and consistently market to your customers? Chasing new customers or market segments while neglecting your customer base, leaves your customers unappreciated and makes it easier for your competitors to acquire them.

So focus on chasing after current customers! Market to them! Make keeping your customer base informed about all current and new products and services a priority. Invest time and energize your customer base and you may find they actually help you sell new customers too!

As the CEO, five questions you should ask your marketing (and sales) departments:

1.    What is our customer retention rate and how could we improve it?

2.    How much time and resources is our company spending marketing to our customer base compared to chasing new customers and new markets?

3.    How are we keeping our customers informed about new product and services offerings, and are marketing and sales working together to encourage purchase?

4.    How can we help our customers be better evangelists for our products and services?

5.    What else do our customers need that it would make sense for us to provide them?

ELIZABETH ANDREINI

As the President of Accelerate Marketing, LLC, Elizabeth Andreini, is the “secret weapon” CEOs turn to at key growth points when they need to transform marketing and product management to grow their customer base, increase revenue & scale their business. In addition to providing experienced executive insight and strategic guidance, Elizabeth often works as an interim CMO or VP to provide the hands-on leadership needed to rearchitect marketing and product management and improve execution from the inside.

Elizabeth Andreini, founder & president of Accelerate Marketing, LLC 

Accelerate Marketing, LLC

206-769-3420 or elizabeth@accelerate-marketing.com

www.accelerate-marketing.com

Twitter: @acceler8mkting

LinkedIn: www.linkedin.com/in/elizabethandreini

We are a Grow50™ member firm.

Know your customer’s “true” motivation

Today we have a guest blog from Andrew Ballard:

There is a difference between what your customers say their motivation is for buying your product, and what truly motivates their decision. Are you confident you know the difference? The wrong assumption can cost you sales.

Most buyers believe they employ a logical thought process in making purchasing decisions. This is true for both business and consumer segments. However, many studies demonstrate that most decisions are motivated by emotion not logic. That being said, most consumers still rationalize their purchases. Psychologists refer to this event as post-hoc rationalization.   

I know this to be true, professionally and personally. When I bought my last car (a sporty red Acura with a high performance engine and suspension…fastest car I’ve ever owned), it was purely an emotional decision. Of course, I tried to rationalize the purchase to my wife. On my way home from the dealership I called her. “I just bought a new car honey; it’s a pretty red Acura, gets 30 MPG and you’ll love the navigation system, I’m pulling in the driveway.”

As I set the parking break, I noticed Sandra standing in the front doorway; I waved enthusiastically; then I made the mistake of racing the engine…busted! She gave me the look—the kind of look a husband deserves after 20+ years of bliss—then rolled her eyes and went back inside the house.

So what does this revelation mean to your business?  It means you should focus more on your brand image and the emotional connections your market makes with your product. It means you should focus less on features and comparative data, and adjust your messaging accordingly.

If you are able to identify the “true” motivation for your customer’s buying decisions, and act on that knowledge, you will likely experience a significant increase in sales. At the very least, your customers won’t roll their eyes and walk away.

So I ask you, what is your current messaging strategy…is it rational or emotional?

How can you adjust your message to trigger the emotion that “truly” drives consumer behavior? 

ANDREW BALLARD

Andrew Ballard is the president of Marketing Solutions, a Seattle area agency that developsresearch-based growth strategies for small to midsize businesses.  He has over 30 years experience specializing in marketing research, strategic planning, brand development and revenue generation.  Ballard has helped hundreds of organizations (from startups through Fortune 500 companies) realize significant growth.

Andrew is a graduate of the Ford Marketing Institute and Certified in Six Sigma.  He is also a respected author and educator.  His articles on marketing strategy have been published in business journals through all 50 States.  His first book, entitled Your Opinion Doesn’t Matter, recently released to rave reviews in both corporate and academic circles.  In addition, he is adjunct faculty at the University of Washington.

 He can be reached at 425-337-1100 or www.mktg-solutions.com

Employee Buyouts- Better than you thought...

Today we have a guest blog from Chad Blevins:

Most business owners today have nearly all of their personal net worth locked up in their business, meaning that their retirement security is tied to their ability to sell the company. 

But when asked about their succession plans, most owners can’t articulate their plan to monetize their business value, they have been too busy running the business and surviving the economic turmoil. 

For those that have explored selling to an outside 3^rd party, a rude awakening if often waiting.  Most deals today come with a long list of “strings” that frequently include:

• Required long-term employment by the owner/sell (3-5 years).
• Relatively low initial down payment (40% is probably a good average right now). Significant “at risk” money in the form of an earn out.  If the business doesn’t perform, you might not get the rest of your money. 

There is an option that is often overlooked – your employees.  Many owners quickly dismiss the employee buyout option because they “don’t have any money”.   While that is certainly almost always true, is doesn’t mean that it isn’t a viable option.  And sometimes even the best option.

 

Done properly, employee buyouts can create some significant advantages over outside buyers.  First and foremost is the ability to create a true win-win.  As opposed to the adversarial negotiation process of a 3^rd party sale, a properly structured employee buyout can be based on “how can we best structure this for all of us to be successful”.  This takes advantage of the long-term relationships…and the long-term need for both parties to be successful.

What we often see as a result is significantly more financial creativity and flexibility – helping to minimize taxes.  Translated, the seller can NET more money from the deal, while the buyers actually pay less.  Everyone is happier and the deal is actually significantly less risky. 

And if money upfront is highly desired, there are reasonable financing options that exist where banks actually prefer to lend to someone with critical experience (i.e. a key employee).  It won’t get you all of the value upfront, but it can be a significant lump sum.

Consider a client of mine where we recently celebrated the 5-year anniversary of signing the deal to sell the business to the key employees.  When I initially met them nearly two years before that, Mike (the owner) felt certain he would have to do a controlled shut-down of the business.  It is a professional service business, with very little in the way of assets to either sell or borrow against.  Likewise, there wasn’t much of a market for 3^rd party buyers – and those that were interested wanted too much from Mike with too little reward.  Mike simply dismissed the employee option since “they had no money”.

We spent 2 years on this project, running parallel paths.  First was working out a financial structure that treated both sides fairly.  Second we had to develop and implement a strong training program to make sure the 3 key employees were ready to assume the leadership of the company (both internally and externally with clients). 

Five years later we are looking at having the deal paid in full by the end of this August, with the new owners ecstatic about their ongoing business.  Mike couldn’t be happier about the impact his company is now having on their three families, not to mention the rest of the employee base that didn’t see their jobs lost to the shut-down. 

And the even better news for Mike is that we structured the financials in a manner that allowed him to get an additional 25% NET from the deal that what would normally have occurred – making his retirement even more secure. 

There is no question that these employee buyouts create a longer-term mutual dependence.  Both sides need the buyers to run the business successful to be happy – at the very least for the years the buyers will be making payments.  As such, we are really careful to adhere to the following principles:

• Get started early.  Define deal parameters early on, even a few years before the actual deal.  It makes it real and tangible.
• Focus on the Transition Plan.  Craft and implement a plan to make the owner/seller obsolete to the company BEFORE the deal closes.  
•  Identify gaps in capabilities for the buyers and design a method to close those gaps – again before the deal closes. 
• Approach the design of the structure as a joint design.  Don’t have one side create an “offer” for the other side to consider.  This very quickly could spiral into a very negative negotiation process – risking your working relationship (and the stability of your company).

Finally, we advocate hiring an advisor to design the deal from the middle ground.  Representing neither buyer nor seller.  This dramatically increases the likelihood of a true win-win deal getting done. 

Questions to consider: 

1.  Do you have a true succession plan that you are working to – even if you are 10+ years away from selling?
2. Have you properly considered selling to key employees? 

a.     If so, how did the option look and what could make it better?

b.     If not…why not?  

CHAD BLEVINS

Chad Blevins founded Blevins Financial to serve the complex financial and estate planning needs of the closely-held business owner and high net worth individuals. His focus on combining an overall estate planning strategy with life insurance analysis positions him to serve clients in a more comprehensive -- and often more simple -- manner.

He has held executive leadership positions in Fortune 500 companies (GE, Honeywell, MagneTek), private start-ups as well as family-held businesses. His experience includes executive positions in Sales, Marketing, Business Development, Finance, Operations and M&A work. This diversity of experience allows him to work in a highly comprehensive manner in dealing with client’s personal and business objectives.

Chad is a Board of Directors member for the Northwest Family Business Advisors, which focuses on teaching advisors how to work together for the client’s benefit.  His level of expertise and desire to educate has also prompted speaking engagements with the following organizations:

Washington State CPA Association Association of General Contractors (AGC)

National Electrical Contractors Association (NECA) Approach Management Systems/Smart Association Northwest Family Business Advisors.

Chad was a recent honoree by the Puget Sound Business Journal as one of the “40 Under 40" top business people in the Puget Sound area, recognizing his contributions to both the business and charitable communities.

Chad is married, has two children and is active with various charities serving those with Autism and other disabilities. He holds an MBA in Finance and Marketing from Indiana University and has undergraduate degrees in Business Administration and Economics. Chad enjoys skiing, golfing and is an active coach for local Little League teams.

Institutional Amnesia: What Happens When You Can’t Remember the Past

Today we have a guest blog from Dan Weedin:

As baby boomers start the process of exiting the business stage, they take with them a tremendous amount of institutional knowledge and smarts. Are you prepared to preserve your past so you don’t destroy your future?

I recently worked with a client who told me that over the next five years, 86% of their workforce would be eligible to retire. This is a startling number and caused this organization to pause. We worked on creating a leadership development program that systematically transfers experience-based knowledge through a professionally based mentoring model. Regardless of the size, scope, or industry of your business, you will benefit from instituting a thoughtful, intentional mentoring model in your business.

Otherwise, you may end up suffering from institutional amnesia. Consider these points…

• Employees leave due to retiring, finding a new job, or dismissal. They have knowledge that’s valuable – operations, technology, human resources, sales, and administrative. What’s that worth?
• You may have set up protections for sharing vital information and proprietary property. What you may not have thought of are shortcuts, efficiencies, contacts, and operational processes attained over the course of years that improves productivity and saves valuable time.
•  Without gleaning organizational “secrets of success,” you’re bound to actually “break” what might be a smooth running machine. How long does that take to fix?
• Preserving institutional memory is a business strategy that most businesses haven’t considered, but will be a huge topic in the future. Who is better capable of teaching than those valued employees who made your success possible? You will find that they are more valuable as a teacher than potentially just playing out the string.

You have the opportunity to retain your memory with a few easy and painless steps…

• Institute a formal mentoring program. Train your veterans on how to show the young guns the ropes. Create joint accountabilities and engage all sides by showing them why it’s important to the organization and to them individually.
• Create redundancies for critical organizational information like passwords, client relationships, and crisis management. Businesses spend countless hours and money to design high tech redundancies for data. They spend less time establishing human redundancies that are caused by illness, injury, termination, retirement, or any other loss of services. Why would you leave your most valuable asset – the smarts inside your employees’’ heads – to chance?
• Avoid gravitational pull. On the road to any desired future state there lies many speed bumps and traps. I call it gravitational pull. It’s easy to go back to that place when time and patience are short; money is tight; or supervisors stop holding employees accountable. This final step is the most critical point.

Bottom line – if you have employees who hold institutional knowledge, then you are in danger of getting amnesia. The results of institutional amnesia include institutional death. The scary thing is it may be happening and you don’t know it until it’s too late.

What have you done to avoid being hit with “amnesia?” What are you prepared to do to retain your institutional “smarts?”

© 2012 Dan Weedin. All Rights Reserved

DAN WEEDIN

Dan Weedin helps turn his clients business risk into rewards. He is able to take the abstract concepts of risk and crisis management to help business owners prepare and respond more effectively and with less time and cost to crisis. Since he doesn’t work for an insurance company or agency, he is able to act as an unbiased advocate for his clients. You can lear ore about Dan and how he can help your business on his web site at www.DanWeedin.com.

Scorecards, Dashboards & KPIs - Oh My!

Today we have a guest blog from Elizabeth Andreini:

In Q4 we were all thinking about setting budgets and planning for the coming year. Now that we are in the first quarter of the year, are you making sure that the money you are spending on marketing is as effective as possible? Understanding how your marketing efforts are performing can be difficult but will help you better assess what’s working…and what’s not. Make this the year you make smarter marketing decisions!

If you haven’t put them in place, now’s the time to utilize scorecards, dashboards and other measurement tools to ensure that you are spending money most effectively – and making the biggest impact on your bottom line. Here is a quick briefing on scorecards and dashboards with five hints on using these tools:

•       Scorecards: help you understand performance relative to plan, and enable you to align operational execution with business strategy

•       Dashboards: tie to operational goals and leverage reports containing Key Performance Indicator data to help you gain insight into Key Performance Drivers so you can “pull the right levers”

5 important factors to consider when using scorecards and dashboards:

1. Have a clear purpose in what you are tracking and what you are going to do with it.
2. Be SMART (specific, measureable, achievable, realistic and time bound) in your data requirements.
   - Use “good” data. That means data that is not averages, is reasonably accurate, complete AND easy to get.
3. Align the use of the scorecards and dashboards with your company’s business processes so the information can get used in decision making to drive company behavior and decisions for optimal impact.
4. Look beyond outcome data showing history to gain insights on how your decisions and processes can be modified to get a different result – identify your Key Performance Drivers.
5. Provide a frame of reference using targets or benchmarks, whether internal and/or industry specific as a point of comparison.

As the CEO, the questions you should ask about your marketing efforts are:

1. What are the success measures of my marketing efforts? Do I know which marketing efforts are the most effective?
2. Do I have the right information easily accessible in the company so marketing can use it to track their marketing efforts and spend? How can I help ensure the company and those in it are helping capture the information we need?
3. Is my marketing more or less effective than my competitors? Is it more or less effective than others in my industry? Does my marketing department regularly track their progress and make adjustments based on the results so we are making better/smarter marketing decisions than last year?

Here’s hoping 2013 is the year your marketing efforts have even more impact on your company’s success!

ELIZABETH ANDREINI

As the President of Accelerate Marketing, LLC, Elizabeth Andreini, is the “secret weapon” CEOs turn to at key growth points when they need to transform marketing and product management to grow their customer base, increase revenue & scale their business. In addition to providing experienced executive insight and guidance, Elizabeth often works as an interim CMO or VP to provide the hands-on leadership needed to rearchitect marketing and product management and improve execution from the inside.

Elizabeth Andreini, founder & president of Accelerate Marketing, LLC 

Accelerate Marketing, LLC

206-769-3420 or elizabeth@accelerate-marketing.com

www.accelerate-marketing.com

Twitter: @acceler8mkting

LinkedIn: www.linkedin.com/in/elizabethandreini

We Don’t Need No Stinking Change!

Today we have a guest blog from Dan Weedin:

Change management is a hot buzzword in business circles today. Everywhere you turn, experts espouse ways to deal with change in the workplace, in the world, and even in your home. CEOs and executives want to learn how to manage change; implore change; beg for change; and even get exact change. Well, I’m here to tell you that you can stop. You don’t need no stinking change. You can go on forever doing just what you’ve been doing all these years. It’s your life and your business. No change!

If you go that route, you need to know what you’re in for. In all decisions that we make, there are consequences. Let’s see what happens when we avoid making change in our organizations…

• You become stale and obsolete. You can only sell the same “stuff” to the same people for so long. Daily newspapers, phone book ad executives, and video stores all found it out too late. There’s always a bigger and better ship coming around the corner. You need vision and the ability to be nimble to stay relevant.
• Your people leave. Without change, people get bored. They don’t see growth or potential and will find greener grass. Maybe an even bigger problem is that they get complacent and just decline in efficiency and ability.
• You can’t recruit new talent. This goes along with good people leaving your business. You have a certain “street cred” (credibility for all you non-changers). Your reputation gets around and the perception of you as being dull or dynamic will either bring in young talent or repel it.
•  You lose business. People want to work with cutting edge and vibrant organizations. If you are stale; can’t keep quality people; or run ineffective operations, then you’re yesterday’s news (which happens quicker today than ever before).

 You don’t have to change in business. You also don’t have to brush your teeth, eat healthy, exercise, read books, or wear sunscreen. Those all have consequences, too.

If you do find yourself wanting to avoid those calamities I’ve listed, here’s a short and sweet guide to affecting change management in your organization.

•  Do a pulse check on yourself as a leader. What do your key employees think about how well you run the organization and treat them? You have to start at the top if you plan on effectively leading change.
• Be very clear about your vision. Your employees, your customer base, and your entire supply chain need to know the destination. Change without vision is doomed to failure.
•  Be patient. Change is a slow moving beast, especially as the organization gets larger. There is bound to be “gravitational pull” to default back to the good old days. Be patient, yet firm in the transition.
•  Don’t quit. The worst thing that can happen is that when the going gets tough, you capitulate. This is terrible role modeling and the quickest way to slide back. In the end, the decline would be worse than had you not tried to change at all!
• Celebrate successes. I fear that one of the things we as humans are worst at is complimenting and rewarding good behavior. Recognize and applaud positive effort. Pretty soon, you will find others trying to do the same.

 We live in a global, highly technological, and fluid business world. The economy and business practices are going to change whether you’re on board or not. You don’t have to change, but not being prepared and skilled in change management will lead to dire consequences at some point.

Those businesses that embrace change, and know how to effectively manage it within their organizations, will ultimately be successful regardless of where and how the world turns.

Hey can you spare some change, pal?

© 2012 Dan Weedin. All Rights Reserved

DAN WEEDIN

Dan Weedin helps turn his clients business risk into rewards. He is able to take the abstract concepts of risk and crisis management to help business owners prepare and respond more effectively and with less time and cost to crisis. Since he doesn’t work for an insurance company or agency, he is able to act as an unbiased advocate for his clients. You can lear ore about Dan and how he can help your business on his web site at www.DanWeedin.com.

Six Sigma marketing, a formula for success

Today we have a guest blog from Andrew Ballard:

Six Sigma is no longer just for large manufacturers. Smaller service companies can benefit too. The term Six Sigma refers to a measure of quality within six standard deviations, which translates to a maximum of 3.4 defects (or errors) per million...near perfection.

Near perfection may sound intimidating; however, in terms of applying Six Sigma to your business, I’m referring to more of a mindset than a metric. A customary Six Sigma exercise, which translates well to the functions of marketing and sales, involves process mapping.

Michael J. Webb, president of Sales Performance Consulting, put it well (in an iSix Sigma Magazine article), “Effective sales process mapping focuses on the goals and problems of buyers and sellers.”

The objective is to define the challenges and opportunities in the process of 1) identifying responsive segments, and making them aware of (and interested) in your product or service – the function of marketing; and 2) qualifying prospects’ needs and satisfying them – the function of sales.

We had a client that was unsatisfied with their sales numbers; their remedy was to increase the budget to pull more leads through the pipeline. Using process mapping we found that their weak link was conversion, and had nothing to do with quantity of leads. The real issue was sales training and tools. In essence, they were burning leads and would have thrown more good money after bad.

Begin the mapping process by defining and grouping your seller inputs (marketing and sales stimulus), and buyer outputs (prospects’ response). Using a flowchart format, map the linear progression from lead generation through customer service. Process maps differ by industry, business situation, objectives and resources. Customize your map by using MS Excel (it has an adequate flowchart tool).

Use Six Sigma as a philosophical and data driven approach toward improving your marketing and sales processes. It’s not just about generating more revenue; process improvement encompasses reducing costs, mistakes and time-to-market as well.

Near perfection may not be realistic for your business, but improving your marketing and sales process will likely lead to better customer experiences…which is the formula for success in any enterprise.

How do you detect your company’s strengths and weaknesses, with regard to marketing and selling processes? And, how would you use process mapping to identify opportunities that may improve your customers’ experience? Give process mapping a try…you won’t be disappointed. 

ANDREW BALLARD

Andrew Ballard is the president of Marketing Solutions, a Seattle area agency that develops research-based growth strategies for small to midsize businesses.  He has over 30 years experience specializing in marketing research, strategic planning, brand development and revenue generation.  Ballard has helped hundreds of organizations (from startups through Fortune 500 companies) realize significant growth.

Andrew is a graduate of the Ford Marketing Institute and Certified in Six Sigma.  He is also a respected author and educator.  His articles on marketing strategy have been published in business journals through all 50 States.  His first book, entitled Your Opinion Doesn’t Matter, recently released to rave reviews in both corporate and academic circles.  In addition, he is adjunct faculty at the University of Washington.

 He can be reached at 425-337-1100 or www.mktg-solutions.com