The New Big Three Economic Drivers
Bill Warner Sunday, July 12, 2009
How could curiosity, imagination and failure possibly be economic drivers? They certainly seem like important business factors, among many others, in running a business. Read the details in Open Forum.
How so?
Think about it. We are reading about companies that are circling the wagons on cost and expense reductions and driving current sales operations to bleed every ounce out of the stone of their current products and services. What makes the difference is recognizing when a product or service has reached the point of failure in its market. The idea is that failures drive the need for new innovations. Executives need to have the curiosity about their markets and customers to see when the failure milestone is being reached. Simultaneously, they have to have the imagination and innovativeness to create new products and services that address new market needs. Even in a recession, new innovation continues to play an essential role.
Identify failure and thrive
The lesson here is that business owners need to be courageous enough to recognize and act as they see failure approaching. Just responding to a failure that has already occurred is a death blow. Recognize the signals that indicate your business is failing:
- Loss of cost competitiveness
- Price reductions due to competitive offerings
- Changing customer priorities
- New market trends that weaken your market segment
- Strong competitive offerings impacting sales
Seeing failure coming gives you time to act and take a new direction. Have processes in place that give you the information you need to foresee failure.
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Business Owners Don’t Need Stimulus Money
Bill Warner Wednesday, July 08, 2009
That’s right. Business owners, you are on your own, and that’s OK. In its recent survey of 1,000 customers, Intuit discovered that an overwhelming number are relying on themselves, and not the government, to survive this recession.
What’s the situation?
An unbelievable 94 percent of small business owners say that they depend on themselves the old fashioned way. They use the same operational strategy they did when they bootstrapped their businesses in the first place. Almost none of them have received any stimulus money and don’t believe that the government’s stimulus plan will benefit them.
In fact, sources of financing have declined as shown by the Small Business Administration backing 30 percent fewer loans than it did a year ago. It is still unclear how this situation will change under the Americas Recovery Capital program.
So what are small businesses doing?
Small businesses are again demonstrating why they are the heart of America’s economy.
- Most of the surveyed companies see new opportunities for their companies, showing the adaptability, innovativeness and responsiveness of entrepreneurs, even in the face of continued recession.
- More than half of those surveyed expect to see business growth over the next 12 months, driven by their focus on marketing and sales.
- They also say that now is a good time to invest in a small business, exploiting new opportunities and innovative ideas.
What do entrepreneurs need to do?
Successful entrepreneurs are those that act decisively and quickly. They put their instincts and innovativeness to work to deal with the changes that have occurred in their markets. Some of the keys to success are:
- Financing is still available, but harder to find. In many cases, entrepreneurs need to go back to basics of identifying potential investors within their own scope of influence (friends and family). Strategic partnerships should be purposefully pursued to join with established companies who have the cash to invest in new products and services.
- Don’t let all the media hype get you down. Look deeply into your market segments and see what is really going on and respond to it. Let the facts that face you direct your decisions.
- Recessions also bring changes to markets. Make sure you understand the changes in yours and find the ways to exploit them with changes to what you are currently offering and providing new products and services.
- By all means, act. Do not simply let circumstances overtake you.
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Twitter For Marketing Reach
Bill Warner Monday, May 18, 2009
Twitter has taken mass marketing to a new level. Like I hear from many people I meet, Twitter is being viewed as a toy for people to share what they are doing right now and other assorted nonsense. “I don’t want to know that much information about people.” “Who cares that they are mowing their lawn?” “Why do I need to know when someone is going to a soccer practice?”
Twitter is more than you think
Think again. Twitter is a tool, if utilized intelligently, can produce a huge contact network of people that is actually interested in hearing from you. After all, they had to actively decide to “follow” you. The mass marketing advantage of this is that you can create a following of thousands and thousands of people. At the usual marketing hit rates of mass mailing of 1% or less, you can reach a lot of people nearly instantly and for no money. It is far better than buying an email list.
Creating followers
I am no expert at this, but in a matter of days, I was able to create over 500 followers. At this rate, I will have 10’s of thousands in a matter of weeks. I did this by simply intelligently following the people that are followed by people I know and have followed. Interesting enough, most of them decided to follow me too. Then I started to selectively send my blog notices to all those who followed me, giving them something meaningful to read. I also responded to tweets from people I was following, giving them recognition and giving me more reach that produced even more people who decided to follow me. This continues every day as more and more people decide to follow me as I feed them more content.
Yes, you have to weed out some undesirable people you are following, but followers start to respond to your tweets. Dialogs get started that all followers are watching and sometimes also participate. This whole process explodes into more and more followers as you get more and more involved.
The power of the masses
Once you have created a large enough network of followers, say 10,000 or more, you can start to exploit its marketing power by reaching out to your followers with products and services that might be of interest to them. At traditional hit rates, a network of 10,000 followers might produce 100 leads. At 100,000, that would be a 1,000 leads produced by a very inexpensive mass marketing program. Networks of this size and more are prevalent on Twitter. I started to get interest from some people even at the low level I have achieved so far.
Twitter now
It is not a lot of work to get started, but you have to grow your reach by actively following people. You do have to have some good content that would be of interest to maintain their interest. I have a tremendous amount of blog content that is serving as a basis for feeding the Twitter network. Give it a try. You do meet some interesting people and have some fun while doing it.
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Internet Commerce - Weathering the Storm
Bill Warner Saturday, November 29, 2008
At the recent Internet Summit in Research Triangle Park, the kick-off presentation was a sobering look at the business status of internet commerce given by comScore, a global Internet information provider to which leading companies turn for consumer behavior insight that drives their marketing, sales and trading strategies. comScore maintains massive proprietary databases that provide a continuous, real-time measurement of the myriad ways in which the Internet is used and the wide variety of activities that are occurring online, giving them a comprehensive view of consumer behavior. In other words, this is company that is watching your every mouse click and key stroke.
Intuition would tell you that internet commerce is suffering just as much as the rest of the industry in this market downturn. However, your intuition might not tell you the deeper insights that you need to know. Through the 3rd quarter 2008, ecommerce is up 10 percent over 2007. That is less than half the annual growth that has occurred since 2002, but nevertheless is growing. This can be broken down by consumer income segment, observing that spending by people whose income is less than $100,000 per year is actually declining, while those above $100,000 is increasing 14% over 2007. Clearly, the economic downturn is affecting the lower income group the most.
This can mostly be attributed to higher prices, led by the over 30 percent increase in motor fuel, all of which has significantly squeezed discretionary spending. But, fuel prices over the last several weeks has fallen to less than $2.00 per gallon and food prices are starting to drop as well. One might think that ecommerce is going resume its 20 plus percentage growth again, but that is not what is going to happen. When asked what their major issue is now, the concern about rising prices of consumers whose income is greater than $100,000 is being replaced by a significant concern about the financial markets. For consumers whose income is less than $100,000, their concern is about inflation; including prices, jobs and financial markets.
When asked what they thought their spending for the holiday season would be, about 60 percent of consumers whose income is less than $100,000 said they would be spending less than last year, while 43 percent of those greater than $100,000 said the same.
comScore can only tell us what has occurred, not what will occur. So they have no crystal ball. They did ask about the effect of the presidential election showing that over one third of the consumers are either not sure or have less confidence in making near-term expenditures. The Obama effect is a big unknown and the markets are hanging on every word he says or doesn’t say as well as what the administration says about the various bail-outs that are being proposed.
We certainly have not seen the end of the trend setting for consumer spending as the situation is still very volatile with more shoes to fall with the change in administration.
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Know the Buyer’s Food Chain
Bill Warner Saturday, March 22, 2008
Knowing that you have, or will have, a winning product does not give you time to rest. You have to grease the skids by making your buyers aware that you have a product that solves an important problem that they have. Founded upon your in-depth understanding of your buyers, you need to structure the appropriate marketing campaigns that raise buyer awareness of the product’s value and availability. This can be mind numbing work, but is very necessary in order to not have surprises that could stop your business later. Many hours spent on understanding the distribution channel can save you from a whole lot of costly mistakes later when you are trying to get the revenue for your hard work.
Know How the Buyer Buys
Almost always, it is not obvious how the buyer actually buys. Knowing this is the subject of millions of dollars that some companies spend in order to introduce products to the consumer retail industries. Advertising agencies and research firms get rich figuring this stuff out. The best way, and a lot cheaper, is to ask them yourself. Approach representative examples of your buyers and ask them how they purchase products in your market segment. Answer these questions:
- Who do they buy from
- Where do they learn about new products
- What are the payment requirements
- What incentives are offered
- What are the terms and conditions for the purchase
- Is credit required
- What are the price ranges
- How is the delivered
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Telemarketing in Perspective
Bill Warner Monday, February 25, 2008
What is marketing all about? It’s all about generating qualified sales leads with whom your sales team can proceed with the sales process. Marketing gurus will tell you a dozen more things that marketing is about, but they all boil down to generating sales leads. That’s it, and it’s very important, and the measure of marketing success is how many qualified sales leads are generated.
Telemarketing is an effective and efficient way to generate sales leads when performed correctly by the right people. Let’s focus on what it takes to do this successfully.
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Be Referable
Bill Warner Saturday, February 23, 2008
We have all heard the old saying, “it’s not what you know, it’s who you know.” Well, there is a lot to be said about that. Look back on the business you have won recently. How much of it came by referral from someone you know, versus a cold call to a prospect or an inquiry directly to you or through your website? Like many of the business people I meet, the majority of their business comes by referral.
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Know Your Buyer
Bill Warner Monday, February 04, 2008
Before you ever approach an angel investor, you absolutely need to understand your business and have done the research and analysis necessary to write a business plan. One of the first questions you will get from any investor is, “who will buy your product or service?” You need to have a crystal clear answer to that question or the investor will conclude that you do not understand your business.
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Know Your Market
Bill Warner Wednesday, January 16, 2008
Whether you are starting a new company, launching a new business initiative or spinning out a company, the first and most important thing you must do is know your business. I think there are two constituencies that you have to convince, other than yourself. First, you have to know your business concisely enough so that you can quickly explain it to your grandmother; so that she understands it. The second is you have to comprehensively explain it to sophisticated investors so that they are convinced it’s an attractive investment. If you can do this successfully, you understand the business.
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Who Are Your Buyers, and Who Feeds Them
Bill Warner Tuesday, January 15, 2008
Once you have the overall industry landscape figured out, the next step is to go deeper and describe who the buyers, suppliers and distributors are, and what drives them. This is the food chain that some researchers refer to. Start with the buyer; your customer. Within a company, who is the buyer? Is it a CIO? Is it a VP of service? Is it the purchasing manager? Is it the buyer for a retail store? Is it the VP of development? Whoever it is, describe the buyer’s recognition of the problem you solve, the criteria that will be used to determine the purchase, the likely availability of resources to support the purchase, and the decision process that you will be confronted with.
