The Economy May Stall: Why That’s Good News
2019 is around the corner and the economy is showing signs of stalling. For small businesses, this is actually great news, as it opens the door to capturing market share from larger, less nimble competitors.
Preparing your small business for growth requires following some basic product positioning and brand building guidelines:
1. Have a great product/service (which takes time to develop).
2. Understand how to differentiate your brand in a crowded marketplace.
3. Implement a consistent demand generation engine.
The big “IF” however, is whether your brand is RELEVANT to your target market. Brand relevancy is more important than brand awareness today because it means your target market cares what you have to say, and is interested in what you do.
Key Elements to Brand Relevancy
1) Don’t Assume Advertising Creates Growth
2) Understand the Power of Demand (versus lead) Generation
3) Discounts and Promotions Kill Profit
Let’s break these three key concepts down:
Don’t Assume Advertising Creates Growth
Industry experts have said for the last 15 years that advertising was dead. The “advertising is dying” drumbeat started in November 2002 when Gallup released this study that proved traditional advertising expenditures were not generating results.
At the time, experts claimed that traditional ads would be replaced by digital advertising as Google started its rule over the internet. A few years later industry experts said social media would replace ads, then it was YouTube, and now the latest craze is Instagram.
Yet, companies are STILL spending money on advertisements that try to induce buyers into making a purchase. Guess what? It’s still not generating a return on investment.
Every small business needs to grow, and every business owner makes the same fated mistake; assuming advertising will singlehandedly change the company’s growth trajectory.
The key to small business growth isn’t more advertising. Period.
Understand the Power of Demand (versus Lead) Generation
Creating demand isn’t just a “build it and they will come” notion. Companies don’t just grow from random activity. Although there are certainly overnight sensations, they are extremely rare.
Creating demand requires a consistent focus on bringing new people to your website, engaging them with valuable content, cultivating a relationship with them over time, and giving them a reason to buy from you.
These are not easy things to do, and most of the time you’ll find marketing professionals are proficient in only one to two areas, rather than all of the components of demand.
Secondly, creating demand requires that you find ways to engage your satisfied customers in telling your story. Not by giving them a referral bonus, but rather by giving them a referral “gift” they can share with their community. Give them something of value that they can give away to people they care about.
Forget Discounts and Promotions: They Kill Profit
Every year around this time – it starts: endless holiday sales. It’s the same thing year after year. 60% OFF! Buy now!
Why do brands of all sizes assume that certain holidays will “get” their target market to buy a product? The truth is, people buy when they are ready, and they buy what they want, not when a holiday sale kicks in.
Sure, we all shop for the best price, but even for major holidays, a “sale” isn’t the motivation. Buyers are motivated by the need a holiday creates to make a purchase.
Think about it. You’re going to shop during these holidays anyway, so a “sale” doesn’t influence that behavior, and rarely does it influence where you shop. Customers flock to high-quality, high-convenience retailers (OK, I said it – Amazon), rather than retailers with sales, even during holidays.
So, if you want to grow revenue and successfully market your products and services, what do you do? First, slow down and shift your thinking from action to impact. What impact are you trying to make? Is it selling stuff or growing profitably? Impact is the key.
The truth is, you want to grow more profitably, so discounting doesn’t accomplish that objective. Give it up.
Second, find ways to start a relationship with your customers. Give them tools and information to help them shop. Find ways to engage them. Hold a contest or a challenge to add value after the holidays are over.
This article from an earlier The Startup Magazine issue contains some great ideas to help build relationships.
Here is what I know about entrepreneurship:
1) Next to raising a child, it’s the toughest thing you’ll do.
2) I wouldn’t trade it for the world. If you ever get discouraged about growing your business, stop and remember why you started. Then, get back into that state of mind.
In closing, if you are an entrepreneur, don’t let the idea of demand generation scare you. You launched your business because you had a vision of meeting market need in an innovative new way; don’t let your market community miss out on the opportunity of connecting with you, and the solution you can deliver to them.
About the author:
Terri Maxwell is CEO of Ignite on Purpose, an accelerator for founders, and Share On Purpose, an investment company that has created dozens of powerful brands. In a 25-year career, Terri has launched, owned, sold, or turned-around more than 40 firms, and now serves as a well-known consultant to companies competing in the new world of work.