In our experience marketing for businesses, we have been asked to help bail out a few companies who are struggling to survive or return to their heyday. While there are many lessons you learn, here are the top 3 things these experiences taught us.
1. Know your business model.
Without exception, each business who has approached us because they were suffering 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 the number of appearances you do per year will likely reduce your sales. If you rely on significant ad spends on tv, switching to all internet marketing may save you money but will also vastly change your target audience (statistically from an older to younger audience).
Lesson: Plan your business model before you launch. If you already are in business, figure out what is working and codify it. 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. 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 which sets you and your product apart from the competition.
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 do take outside advice, they put their spin on the fundamental elements of the decisions. The problem is that for change occur something has to shift. Not groundbreaking but true. If you are a decision maker, or crown wearer, at your business and revenues are down let someone else wear it for a season. Choose someone or put together a team you trust and give them space to make some waves. You don’t have much to lose, it will not be forever, and you will likely learn in the process.
Lesson: Pass your authority to others when more of the same cannot possibly 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.