Posts tagged with: marketing
A Strategic Time To Start Or Increase Marketing
Louis Gudema has dedicated his 30+ year career to marketing, sales and business development; starting with work for Coleco Toys at the height of Cabbage Patch Kids craze. He has worked with a wide range of companies from small companies and startups up to the Fortune 25. For a dozen years he owned and ran his own marketing agency, which he sold in 2009, so he is very personally familiar with running and successfully exiting a small business. Since then he has been VP of Business Development for two other digital marketing agencies, and for companies in the edtech and mobile application development spaces, while also working with other client companies on their business growth.
Louie joins us here today on Exit This Way™ to address a topic that if owners were to pursue it before transitioning out of their business, could reap them higher rewards than if they settle for selling their business as is.
That topic is marketing. As Louis says, most companies don’t market well, if at all, but by doing so they could significantly increase their revenues, profits – and sale price.
Louis first explained that most owners think their business is worth more than it is. But when they seek that sale price, they won’t get it. But if in those last 6 months to 2 years, if they start or increase their marketing efforts, then they can ‘bend the revenue curve’ and increase profits. With that, an owner will have a different story to tell buyers. ‘We did $x over the last ten years, and $XX in the last couple years with some marketing, as the buyer, you can do even better.’
Louis described the situation where half of all sellers are disappointed in the price they get at sale.
The benefits of marketing now to the seller is an increase in value leading to a happier retirement. That increase in value benefits the company for a long time, and is worth the sprint to the finish line.
The reason to bother, is that there is a clear return on investment in marketing in the last six month to deliver more profits (highest profits) and transform company value to command a higher sales price.
Louis presented a number of approaches and quick fixes to increase leads and sales by marketing to existing customers, quick changes to get more conversions from your website, and just talking to current customers. Check out what he has to say about email frequency – it will surprise you.
His advice to owners getting ready to sell their business is do not learn to do marketing yourself at this point. Rather, hire an expert, who can help you determine what tactics will work best for you and fast hitting.
Louis outlined his three stage approach to strategic marketing using the concept of a bull’s eye. The inner circle of that bull’s eye includes those approaches that are the fastest way to new leads using to best advantage the assets you already have. He listed and positioned a number of options. The second circle is to reach those prospects already seeking what you offer/deliver – that’s where online search marketing comes in. And the third circle/ the outermost circle takes the longest to build – because you are building for long term awareness among customers, using social media, event marketing, etc.
Depending on the program, owners can expect to see measurable results from these new marketing programs in weeks to months. Online conversion tools can build leads within weeks. Customer interviews can produce results in months. Remarketing programs can work quickly too.
According to Louis, there are good measurable results owners should aim for that will strengthen their selling position when negotiating with buyers. He shared what to look for.
Louis says there are two ‘biggest mistakes’ that companies make around marketing and growth strategies.
- They don’t understand the strategic value of marketing. The first step is understanding the customer, the market and the competition – which is harder than ever today.
- Too many companies don’t do marketing at all at any level. They don’t do the strategic work, the advertising and promotions that have an impact on both topline and bottom-line results.
Listen to Louis’s full interview here.
Listen to Keith Loris on Exit This Way™
Keith Loris, President and CEO of Sales Renewal Corporation in Concord, MA joined host Kerri Salls on Exit This Way™ to discuss The Challenges of Small Business Marketing and Why It’s Important Before You Sell Your Business.
Keith Loris is adept at leveraging marketing and technology to efficiently and effectively drive leads and sales. Prior to founding Sales Renewal, Keith, during his 29 year career, has held executive level sales, marketing & technology positions at technology companies such as Sageful, SoftLock, ServiceSoft, Xerox and NYNEX. Keith earned a bachelor’s degree in biology from Vassar College, and a master’s degree in computer science from New York University. In addition, Keith holds three patents in the use of neural networks and lexical analysis for image & pattern recognition.
The Challenges of Small Business Marketing and Why It’s Important Before You Sell Your Business
Historically, marketing has been seen as a cost center and businesses have consistently under-invested in this area, when it’s marketing that can increase topline or bottomline results, revenue and profitability. As a marketing expert, Keith explained a bit about the importance of growing revenue in the year or two before you sell your business.
He referenced guidelines from the US Small Business Administration which say you should budget for 7-10% of revenues to be applied to marketing efforts. He also identified competitive strengths as being marketing assets to include in your marketing strategy.
Keith used the analogy of retirement account investing – that asset allocation is key in portfolio theory. In the same way, a company’s marketing strategy should be to invest in a diverse portfolio of marketing assets, not just focused on a few tactics. He said each company needs to look at their marketing effort to see where you can maximize your strengths and minimize your weaknesses.
Risk/Value Tradeoffs in Marketing
Just like in other operations and leadership area, before you sell, Keith emphasized the need to ‘fix’ marketing procedures that are based on the owner or one person’s personality. He talked about the risk/value tradeoff of one person being integral to all marketing efforts. Instead, he suggested building out a system, policies and procedures to evaluate and appraise marketing efforts to externalize the owner’s expertise and experience. When you use metrics, your marketing efforts are like a machine, those metrics can be measured and become predictive.
Beyond growing topline revenue, Keith explained how putting in place tangible systems and processes for marketing that can be appraised, gives you a basis for analysis. Historically, because analysis is hard, owners settle for listening to their gut. Or worse, as Keith’s story goes, they get a referral to a marketing person who works with different kinds of companies in a totally different industry, and they wonder why they don’t get a return on their investment in marketing.
Keith talked about three categories of businesses in terms of how they grow their revenue- which is a factor buyers want to understand. He described in real estate vernacular as: ‘fixer-upper’, ‘as is’ and ‘best in class’. Good analysis and use of big data for marketing can position a business as ‘best in class’.
Keith made a distinction between the people you hire to do marketing as ‘good guys’ vs. the marketing team that is aligned with your economic interests. Just because they are good guys does not mean you will see the ROI you seek from their efforts. In contrast, a marketing approach that is tied to you topline and bottom line financial interests can be found and expected. This is the basis of his unique business model, because he believes benchmarking results of all marketing efforts helps you identify who your target market really is, where to find them, and to develop a coherent plan to reach them.
He went on to compare different marketing models, the mistakes of single tactic marketing approaches, and missed opportunities if marketing stagnates in the year or two before you sell your business.
Listen to the full interview here.