If you run a retail operation, chances are that you spend over 2,500 hours in your business, every year. A very serious question, how many of those hours do you devote to achieving rather than to simply doing?

How can you find the answer if you don’t know the question?

Fact –  your business can be more profitable. It can also be a much more interesting way to spend your day. What you need to do is put a whole lot more emphasis on what you achieve and less on what you do. Without some knowledge of your particular operation I cannot offer specific solutions or opportunities. What I can do is help guide you to the answer by clearly identifying the questions:

What do your customers see when they walk into your store?

Complacency and the comfort of the familiar will be your biggest challenge. When you go to work tomorrow, park a few blocks away and walk to your store front. What does your store front say about your business? Now clear up the clutter –  expired notices, manufacturer’s stickers, out-of-date trading hours. When was the last time you changed your window display? Your store front is your 24/7 advertisement –  what is it saying?

How can I improve my message and customer appeal?

Now here’s how to clean up your image and project a much clearer message to your customers. Place a black dot on a piece of white paper –  it’s simple, it has impact, everyone will know what it is, the message is clear. Now, cover the same paper in black dots and what do you get –  a grey piece of paper. The simplicity and impact have been lost. Using the Black Dot Rule, less is always more.

How do I reduce stock, improve my range and increase cash flow?

Apply the 80-20 rule to everything that you do – believe me, it works.

Fact – 20 per cent of the products you sell generates 80 per cent of your profits. Without knowing your business I am confident that this rule will apply. So, let’s see what we can do to reduce stocks of the other 80 per cent of your range, which ultimately will release that much needed cash.

During recent years you will have increased your inventory by adding new products. But, how many products have you eliminated during the same period?
If a product has not sold in the last month, sell it off at cost and don’t reorder.

Of this 80 per cent, many products will be very slow sellers. So why are you keeping shelves full? Sure, your suppliers are happy, but you should either order less frequently or reduce the size of your order.

A few years back we took a section within our stores and reduced the range of products by 24 per cent. Cash flow improved but so did sales. We were amazed and had to find out why. When our research came back, it indicated that our customers thought we had actually increased the selection of products. We had turned a grey piece of paper into a Black Dot. And I have been applying that rule ever since.

How can I add a little life and excitement to my store?

Easy, just be a little livelier and exciting. Start to see your store through your customer’s eyes.

Smarten up your store front and change your window display at least once every month. Clear the clutter from the cash desk and regularly change the products that you display near the cash register.

Promoting your business is a diverse topic worthy of an article all its own, but the real point is to look for opportunities to promote. When was the last time that you asked your suppliers for promotional support? You may be surprised by their response.

How can I survive if my margin reduces?

If there is one black dot that I hope you will remember it is this “20 per cent of nothing is still nothing.” Many retailers seem to disagree, but I would much rather sell three products at a margin of seven per cent than one of that product at 20 per cent. I am not proposing that you become a discount operation, but I am suggesting that the protection of an imaginary per-cent margin has much less value than the generation of cash.

Retail is a hard business but it can also be exciting. Even today I find it impossible to walk into a store without looking for ways to improve that operation. There really is no place for complacency in retail. If you address the questions that I have set, then you will add a little excitement to your day and maybe a little more profit, too.

There is ample evidence from past downturns that the company that maintains its marketing spend through the downturn exits the downturn in a far better position than its competition. Even in the worst of times, there is still business to be written, markets to be taken and customers to be won. And a downturn, when many of your competitors may well be going quiet, often represents an unprecedented opportunity to grab a much larger share of voice.

2. Recalibrate your strategy and recast your budget strategically as opposed to simply cutting x% across the board.

People often look for the one thing that companies should do in response to a downturn. I resist being so binary since a downturn represents doom to some but incredible opportunity to others. And even for those for whom it’s a challenge, an across-the-board response is rarely the right one.

At times like this, strategy becomes more valuable than ever. Know where you’re trying to go, the best way to get there, and how you’re going to know that you’ve arrived. Cut those marketing tactics that won’t help get you there and re-invest the money in the tactics that will.

3. Negotiate pricing.

All the vectors you use to communicate to your marketplace are feeling the pinch right now. There is no better time to play hardball on pricing, or to negotiate added extras that usually cost a lot more. Most media outlets will cut their line rates or give you valuable extras like a free newsletter distribution, web conference, white paper distribution or even additional insertions. Trade show organizers may agree to a bigger booth space for the same price or throw in sponsorship opportunities or show guide advertising that in better times might cost you thousands more. Even if your supplier must hold the line on fundamentals, see if you can’t snag some of the valuable extras.

4. If you have channel or other partners, consider pooling budgets and activities to make your dollars go further.

Can you share a trade show booth with partners? Can you initiate a co-op advertising program that sees you put up some of the cost while your channel partners put up the rest? Is the opposite available to you — are you a channel for an OEM with a co-op program?

5. Do not abandon measurement.

If marketing is seen as the easiest thing for companies to cut during a downturn, then measurement is seen as the easiest thing for marketers to cut. After all, it doesn’t really contribute anything, right? Wrong. Harken back to tip No. 2: If you’re not measuring, you have no idea where you are or what got you there, you don’t know what’s working and what isn’t, and you simply can’t be strategic about your marketing spend. When times are good and there’s budget to spare, you might be able to afford to have some things work a little less effectively. When times are tough and every dollar must produce a result, you need to be measuring so you know which tactics are delivering and which ones aren’t.

6. Be transactional if there’s an immediate opportunity.

As I’ve already noted, a downturn means different things for different companies. If there is good business that can be immediately secured, be highly transactional in going after it. Alter all your messaging to “Buy now,” and focus on tactics, like advertising and direct marketing, that communicate transactional messaging best.

7. If there isn’t an immediate opportunity, go long.

It’s far more likely, however, that your customer’s buying cycle has stalled; it almost certainly has lengthened. So if your customers have hunkered down waiting for the storm to pass, there’s no point in blaring the hard sell at them or offering them discounts and other incentives to immediately do something they’re simply not going to. Does this mean you, too, should hunker down and draw the blinds until things blow over? No, it means your messaging should shift to support longer-term objectives such as awareness building, thought leadership and marketplace education. Tactics like media relations, content marketing, trade shows and white papers that establish your authority and expertise are a better use of your resources if this is your reality.

8. In all communications, employ story telling that emphasizes how your product or service saves money or drives additional immediate revenue for your customers. Speak to the pain they’re feeling in a recession.

Whatever the economic conditions, your marketing and communications messaging should be all about your customer, not you. You should always be speaking to the pain your customer feels and how your product or service solves that pain. In a recession, your customer’s pain is almost certainly all about revenue — making more of it or keeping more of it. Make sure you’re speaking to this.

9. Be overly attentive to your existing revenue base.

“Love the one you’re with,” says the old song, and that’s never more relevant than in a downturn, when new customers are hardest to acquire. Your current customers are keeping you in business and it’s almost always cheaper to maintain and build business with existing customers than to find new ones. Lavish your existing customers with attention, look for low-cost ways to improve the value you create for them, and communicate, communicate, communicate — let them know you love them.

10. Effective relationships never expire, so keep talking.

Keep talking to everyone in your value chain, including suppliers, service providers, channels, influencers and, of course, customers and prospects. Even if they can’t use your services or you theirs just now, keeping those lines of communication open and full of useful information will serve you very well when the economy recovers.

When considering any kind of partnering arrangement, be it for sales, marketing, distribution, R&D or any of the functional areas involved in bringing a product from concept to the end user, you as the leader of the organization must carefully consider your strategy. What is it you are trying to achieve? What unique value do you bring to the market?

Look at all aspects of your business, the full range of skills and functions required to make it fire on all cylinders. Break these into two categories: what you will keep in-house and what you will outsource or seek to execute with an outside partner.

When, and when not, to keep it in the family

What you keep in house is known as your core competencies. This group should be characterized by only those skills that are specific to your organization, add significant value to the customer, and differentiate you from your competitors. These are the ingredients of the secret sauce that define your unique value proposition.

What’s left are you non-core competencies. These are skills that may still be critical to getting a product to market and encouraging a customer to buy, but they are not significant differentiators. They may in fact be quite commoditized and standard for your industry. The question that must be applied here is if it is more cost-effective to find an outside partner who can do the job for you.

For example, if you are a software developer, does it make financial sense to have internal resources on the payroll focused on manufacturing and distribution of shrink-wrapped product? If you’re in the hardware business, should you be stamping sheet metal enclosures and fabricating optic cable when there are suppliers who specialize in these components?

Once you have taken a hard look at your business and separated your core from your non-core competencies, what then? How do you go about establishing a relationship of mutual benefit?

The building blocks for lucrative partnerships

You have to let go. Sometimes this can be difficult. Key individuals within the organization may feel quite possessive about a specific skillset or function. This is particularly common in high-tech companies with product R&D. But again, it comes back to having a clearly defined focus for your business and understanding what does not have to be kept in-house. If it doesn’t differentiate you, don’t waste internal resources on it. The right partner can bring your product to market faster and allow you to better leverage limited resources against your core competencies.

Partners can add value in multiple ways. For example a partner with an established presence in a market you wish to pursue can validate your offering as a reference customer.

What’s in it for them? It’s easy to look at a partnership arrangement purely from the perspective of “what’s in it for me?” But to build a truly beneficial relationship, consider “What’s in it for them?” What is going to make the arrangement work for the person on the other side of the table?

Once the deal is done, the real work begins. The partnership requires ongoing care and feeding. Too often, organizations will close a deal and move on to the next one without putting the resources in place to ensure value flows both ways as intended. This is crucial to preventing the arrangement from going south and driving your partner to a competitor. For example, it can take 12 to 18 months of dedicated effort to see returns from a distribution deal.

Trust is critical. There must be a relationship of trust that goes beyond the fine print of a contract and the threat of legal action if there is a breach. If you are in the midst of negotiating an agreement and there is a persistent and obsessive focus on the granular details of legal rights and obligations, this should be a red flag that this prospective partner may not be the best choice for you. Once the deal is struck, continue to act in a way that engenders trust and goes beyond the terms of a contract. For example, in distribution arrangements, companies will often damage the relationship by doing an end run around their distribution partner and selling directly to the end client.  If you plan to go direct under certain circumstances, outline them at the outset – setting the right expectations in any relationship reaps huge rewards.

Have a mechanism for discussion. Prevent the relationship from jumping the tracks by assigning an individual who owns the relationship and having your partner do the same. The idea is that these representatives of the two organizations have a personal, eyeball-to-eyeball dialogue and a clear communication channel to put issues on the table.

Outsourcing. Invariably, a partnership arrangement is a form of outsourcing. The time, effort and resources required to effectively manage the arrangement may, in some cases, be more costly and distracting to the organization than simply keeping the competency in house. This can often by the case in situations such as outsourcing complex R&D outside the company.

To conclude, handing off a non-core competency to a partner is not an abdication of responsibility but rather an opportunity to focus on your strengths. There must be trust and a commitment to feed and nurture the relationship to ensure it is profitable for both parties. Finally, for a partnership to be successful, there must individuals on both sides of the table dedicated to maintaining a regular and open dialogue.

It takes a significant commitment of time and resources to provide adequate answers to these questions and determine if there is in fact an opportunity worthy of the pursuit. If your organization is challenged by lagging sales, consider first if you are in fact doing all you can to a maximize revenues from your existing customer base.

It is far easier to retain existing customers than to acquire new ones. I have seen examples where having the sales team devote 25 per cent of their time upselling existing customers has boosted revenues by 30 to 40 per cent. Get to know your customers, understand what they need, and how they can derive more benefit from what you have to offer. Odds are, you have a product or service that could be of interest to an existing customer and they are not even aware of it.

If you do identify a new market opportunity to pursue, don’t lose sight of how important this established client base is to your business. Avoid the pitfall of devoting so much of your time and resources to developing a new market that you neglect your existing customers. Otherwise, you may be leaving money on the table, or even worse, giving customers reason to embrace overtures from your competitors. Customers always need to feel the love.

When looking at a new market

Address it as narrowly as possible. The more you understand your market, the better you can target your marketing. How to go about this depends on the scale of your business. Are you a local retailer looking to open a new location on the other side of town? Are you a growing software company with a solution that has an established track record in the banking industry that you believe can help manufacturers improve their supply chain logistics?

Biggest is seldom best. Expanding companies often think they should go after the largest market. But it is often the smaller niche market that can provide higher margins and greater profitability. A large share of a small market is often more desirable than a small share of a large market where there may already be well-established incumbents. If you control the market, you will see a greater return on the investment. Competitors will be at a disadvantage and will find it difficult to undercut you.

Get to know your customers. It’s one thing to identify an untapped market opportunity, but quite another to understand how you should address it. Talk to prospective customers, ask them what pain points they are trying to address for which there isn’t an adequate solution, then tailor your offering to fulfill these needs. Don’t even bother proceeding with new product or service development until you have obtained this intelligence from the field. Customers should first be consulted at the earliest stages of product/service development, rather than asked to critique something that is about to roll out.

Where do I find new markets?

A new market can be one based on geography, industry or price point. The type of business you operate and the nature of the new market will dictate how you should go about defining and capturing it:

By sector/industry. This generally involves targeting an existing product or service at a new industry or sector. It may involve customization by tweaking functionality and features, simply retooling your promotional literature to highlight the product/service’s relevance to this new market (case studies with established customers in this market are great marketing tools in this regard), or some combination of both.

By geography. In this circumstance, you may be targeting the same customer profile, but in a different part of town, country or continent. Geography obviously means different things to different kinds of businesses. For a retailer, it could mean the other side of town, or a neighbouring community. For a high tech firm, it can mean another continent. Whatever the individual circumstance, the same rules apply – you must identify and qualify the market opportunity and in the case of international expansion, the culture of your target market.

If you are an export-oriented business, the further away the new market is from your home base, the greater the likelihood that you will have to establish a satellite sales office. When operating in other countries, there are obvious differences in culture, customs and language that necessitate an on-the-ground presence.

By price point. This involves tweaking your product or service to provide customers with different price options, such as the deluxe version with all the bells and whistles and the most scalability, versus the stripped down, more economical version appropriate to a smaller customer with basic needs and fewer staff. In a challenging economy, being able to provide customers with that economy version can make a significant difference to the bottom line.

“The reason I choose to work with women is because when my Mom was 54-years-old, my Dad passed away suddenly,” says Rice. “My Mom was a housewife and Dad was a truck driver. There was no big life insurance payout, no big bank accounts or RRSPs. Mom was responsible for my brother and I and we watched her struggle to find work and when she did she worked long hours at multiple jobs just to make ends meet.”

When Rice began work as a financial advisor in 1994, he decided to help other women avoid his mother’s situation. He set out to educate women through wealth seminars on how to create a sound financial plan to protect themselves and their families.

Since then, Rice’s reputation as a reliable and trusted advisor among many women business owners and others, has steadily grown. He continues to grow his business by providing customized investment solutions to women business owners. His efforts have earned him distinctions such as an Ottawa Business Journal Forty under 40 award.

Rice credits his success to several best practices applicable to any business seeking to establish itself:

• Identify a clearly defined market that you can dominate.
• Engage with prospective customers in that market to understand their needs and tailor what you have to offer accordingly
• Seek out or create venues that allow you to demonstrate your expertise and provide something of value to your target audience to encourage their interest in becoming clients/customers

“Word of mouth, networking and my charity work have been critical to securing a stable client base,” Rice says. “But building long-term client relationships and earning referrals depends solely on the level of service you provide. In my business, I’m known for my ability to listen carefully, and fully understand the client’s needs, concerns and goals. I create investment plans that are easy to understand and simple to follow. Busy people like it when an advisor makes it easy for them.”

The marketing techniques Rice has used to capture this niche market fall into three areas:

1) Develop a Website. Rice understood that business owners are very busy and wear many hats. His web presence allows a new client to go online and do her own research about himself and Raymond James Ltd. so that when he sits down with the client to talk about her personal financial situation, she is already comfortable working with him and the Raymond James organization.

2) Be Involved in the Community. Getting out in the community and being involved in the issues and causes that he cares about has been a great way for Rice to network and meet people.

3) Create Your Own Community. Rice created in 2004 the Women in Business Owners IDEX (Ideas Exchange Forum). A guest speaker will address a small gathering of six to 14 other women to share her experiences and teach at least one relevant skill in a relaxed atmosphere that encourages networking. Topics have ranged from how to dress for success, time management, to proper networking and etiquette techniques.

Rice says his exclusive focus on women business owners has been very rewarding in more ways than money and business.

“Strong relationships, friendships and loyal clients have developed as a result and added more meaning to my life … My business is more holistic now because I help people to grow their businesses through networking and referral AND I grow their investments so they can focus their energy on business and other more important things like family and community work.”

“We knew we had to proactively re-engage with existing customers and expand our outreach efforts to get traction with different groups we hadn’t sold to before,” Larter says. “And we had to go looking where prospects were likely to be. That meant going beyond advertising and promotion in traditional outlets such as newspapers and radio to engaging in two-way conversations with our target audience through social media outlets such as Facebook.”

There is no denying the strategy has demanded significant time, effort and commitment from staff, but Parlez Wireless is seeing the results. The key has been keeping the team involved.

“Transparency is key in engaging team members,” Larter says. “I have taken the time to share with them how the business is doing, and ask for feedback on how to impact sales and minimize costs. We win as a team and we lose as a team, so in order for the overall plan to be successful and work, the team has to be involved.  They may not always like the decisions that are being made, but at least they understand why they are being made.”

Her team’s efforts to promote the business and grow revenues have focused on three key areas:

Sell more to your existing client base

“When the market is soft, it is easier to sell to people who have already experienced your service,” says Larter. “We chose to actively contact clients who had made purchases two years prior and invited them back to our location with a special offer.”

To build this database, Parlez Wireless as a policy asks clients for all their relevant contact information. This information is used for programs such as one in which people are notified when a warranty is up or they have the option to renew a contract.

“We started this outreach program with an incentive to get people to come back to our specific location to buy,” Larter says. “We opted to do this instead of spending the dollars on advertising. This way our ROI is guaranteed and our clients benefit from that spend.”

Sell to a different group

“We realized that if we relied on retail consumers only we were at risk, so we embarked upon a new program to sell to other businesses,” Larter says. “This created opportunities for us to sell one-on-many versus one-on-one.”

To support this strategy, Parlez Wireless created a new part-time position focused exclusively on outbound sales. This sales person was responsible for going out in the community and door knocking to try and garner new business.

“We offered free services such as complimentary annual bill assessments, number portability, set up of e-mail on Blackberry devices, in-store or on-site training, single point of contact for all account needs, and bilingual service and support,” Larter says. “This initiative has gone from one day a week to a full-time position.”

Utilize Social Media

Larter is quick to emphasize the value of social media as a marketing tool that can be used to grow a business and a brand for free.

“Social media is fun, free and happening,” she says. “We spent more time focusing on being present in areas such as Twitter and Facebook, updating our website to include a blog, and focusing on delivering quality information to our clients via email.”

This “quality information” includes insights into new products and applications, software upgrades on existing products, and tips and tricks on how to better utilize a technology purchase.

“Clients regularly talk about us – praise our service on both of these mediums unsolicited. They just do it because of the relationship we have built with them,” Larter says. 

“You can read our blog and product page to see what we write about. I also blog at LisaLarter.com and have a lot of clients who read my updates regularly.”

While the use of social media has certainly increased Parlez Wireless’ visibility, more importantly, it has grown revenues.

“We’ve enjoyed incremental sales growth and even created a wait list for new products before they have launched,” says Larter. “We have utilized social media for recruiting, sharing updates with our clients and announcing special promotions and contests … We have also used search functions to find key words that our clients might be talking about in order to position ourselves as experts in our market.”

The 4 Bees

Four interdependent steps are required to make this happen. I call these the 4 Bees of Successful Online Marketing:

• Be Found. Ensure that your target audience can find you online.
• Be Convincing. Engage with your audience and convert site visitors to prospects.
• Be Analytical. Use the insights of web traffic statistics to understand visitor behaviour and to further improve your ability to be found and to be convincing.
• Be Integrated. Tie traffic into your business processes. Feed leads into your back-office systems for lead nurturing and follow-up.

The remainder of this article describes the individual ‘Bees’ in more detail.

Be Found

Successful online marketing turns the old “broadcast” marketing model on its head. Rather than focusing on outbound activities attempting to find buyers, the “inbound marketing” model lets buyers find you. This requires that your site uses the keyword phrases that your prospects use when they search for you in Google and other search engines. Keyword analysis tools such as the Google Keyword Tool help you understand which terms are being used by your audience. Working these terms into your web site content to create relevant content is just the first step in being found. The other equally important step is the acquisition of quality links pointing to your content.

Search engines evaluate both the relevance of your content and its importance, measured by how many other pages link to your content. These links come from many different sources – industry portals and online magazines, social media venues that discuss your industry, and many others. A proactive PR campaign and social media outreach is therefore a critical element of your online marketing strategy. An authentic presence in social media also lets you engage in conversations, learn what concerns your audience and become a trusted market participant.

I explore this topic in more detail in this accompanying video.

Be Convincing

Attracting targeted traffic from search engines, blogs and third party sites is not enough. Raw traffic is nearly pointless. It’s the resulting conversions (such as white paper downloads, webinar registrations or product purchases) that matter. Online visitors to your site are in a hurry. No one reads your lengthy prose – no matter how much effort you spent crafting it. Most of the time, a visitor will “scan” the page, look for visual clues, highlights, links and calls to action. This in turn means that content has to be easily “scannable”— can you look at your page for two or three seconds and “get” what it is all about? Make sure that your pages answer the following questions:  What is this page about? Is this content authentic? What’s In It for Me (WIIFM)? What should I do next?

Be Analytical

Web analytics are a critical component of successful online marketing. Properly configured web analytics allow you to easily understand where your visitors came from, how long they stayed, whether they followed the intended navigation and “converted” or left without a trace. This insight then enables you to modify those pages that didn’t perform adequately, improve your visibility on referring sites that have proved valuable, adjust your online advertising campaigns and much more. Systematically measuring Return on Marketing Investment lets you improve on past marketing activities and justify your next campaign. An easy (free) way to get started is Google Analytics.

Be Integrated

Leads from your website are rarely ready for hand-off to your sales department. They need to be nurtured with a series of complementary activities. Capturing leads in a systematic fashion via a CRM or other defined process allows for prompt and context-rich follow-up that satisfies both the visitor (with additional information) and your sales department (looking for qualified leads).

Lather-Rinse-Repeat

Feedback from each of these ‘4 Bees’ can in turn be used to improve each aspect of online marketing. Deep customer insight has never been more important than in the online world. While many tools are available to help you along the way, the old adage “Know Your Customer” remains as powerful as ever.