Posts tagged with: revenue curve
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.