Earn Profits via Innovation, Relationships and Local Marketing



Successfully operating a business has never been more difficult.

If your company is struggling as a result of declining profits, at least three factors are responsible.

Firstly, the clutter of competition gets more and more foreboding every year. So it’s crucial to implement continuous analysis and innovations.

MH900422730 young business womanSecondly, mismanagement of internal operations.

Thirdly, making it worse in marketing is the ever-expanding and head-scratching list of advertising options.

The trick is to pick your best marketing options — customized locally if you have multiple locations.

Innovation and due diligence

You can learn a surprising lesson in innovation and due diligence from Wal-Mart.

Wal-Mart’s stock has been tanking after it started suffering from declining sales.

The company has blamed its deteriorating profit situation on its highly publicized wage increases for its employees.

That’s nonsense. Nor is the tepid Obama economic recovery the reason for Wal-Mart’s demise.

But the Digital Age has brought us a new era in competition. Wal-Mart is being hit hard by companies that have made more recent innovations.

Ironically, the company made its mark by innovating.

— Wal-Mart was successful for six reasons:

— The company learned its suppliers’ costs

— Negotiated favorable prices from vendors

— Developed an excellent supply chain management

— Paid low wages to employees

— Sold products at low prices

— Later, it developed a good Web site

Personally, I have a lot of appreciation for what the company has done. So I wish the company well. Once, for example, at a family reunion, my elderly parents drove on a lengthy road trip to attend.

My parents grew up in the Great Depression of the 1930s, and learned to be very fugal. Frugality is good. But there is a point at which frugality does more harm than good. On a Saturday night, I discovered the tire treads on my parents’ car were too thin.

Finally that night, my parents reluctantly agreed to let me buy them new tires. But I had a scheduling problem as I was due to fly home the following evening.

The only tire store opened on the following day, Sunday, was a Wal-Mart. I was able to buy a set of four high-quality tires at a low price. That meant I was able to make my flight and my parents safely finished their long journey home.

And I have other positive, personal stories to regale you about Wal-Mart.

But if you go to an average Wal-Mart, it isn’t uncommon to encounter unfriendly employees and messy, poorly stocked shelves.

Seemingly, Wal-Mart has deviated from its original mission:

“Share your profits with all your associates, and treat them as partners. In turn, they will treat you as a partner, and together you will all perform beyond your wildest expectations,” said founder Sam Walton.

What Mr. Walton said many years ago is applicable for Wal-Mart and all businesses today. Wal-Mart has been overlooking a major profit driver – its employees.

If you want maximum profits, partner with your employees.

Meantime, as many American consumers have discovered, they can save money on good products by changing their buying habits – shopping elsewhere online.

The virtual marketplace provides shoppers with wider selections, competition that pushes prices downward as it eliminates supply-chain shipping to stores.

In a sense, it’s unfair because shoppers know what to buy after seeing products firsthand in brick-and-mortar stores like Wal-Mart.

Other than partnering with employees, there are two key lessons from Wal-Mart for similarly beleaguered companies: 1) Improve the shopping experience and customer service (see dozens of informative articles here); and 2) implement the best marketing customized for each locale.

Marketing

Always remember good PR – earned advertising – is an excellent complement with paid advertising.

The list of advertising options is endless. But even local brand names in advertising aren’t necessarily the best choices, if you’re not buying from the right person.

So if you don’t know where to invest your hard-earned dollars, the solution is simple: Buy only from the best knowledgeable people who are expert in local marketing.

In most medium to large markets, if your monthly marketing budget is $10,000 or more, hire from the best local marketing consultants. In reality, a marketing consultant can be free as the person works off the standard 15 percent advertising agency commission.

Otherwise, you can make the advertising buys yourself.

To pick the right consultant or make the right advertising buys, look for the best local marketing expert.

As you start considering whom to hire, here’s what you must consider:

1. Listening and observation skills

Evaluate whether the person knows your business and competition. Look for trustworthiness. Once you share information with the person then look for empathy and caring about your welfare.

2. Added value

Look for the person who shares timely trends about your industry, shopper trends, and overall marketing tips.

All kinds of national data is available, but only use it if it’s apropos for you locally. A savvy expert will give you data with local options via AdMall for consumer spending; ad spending by your local region via BIA/Kelsey, Borrell Associates or Kantar; and auto dealer spending and vehicle registrations via Polk.

3. Expert opinions

Working within your budget, a local marketing expert will make astute recommendations to increase your odds for success.

4. Complete sales person

A great marketing person knows how to get bonuses in radio and television advertising. A stellar media sales rep knows how to negotiate with the sales manager to get your business free, unsold commercial time.

Often, extra, free commercials will make a big difference for you to cut thru the clutter of your competitors’ advertising.

5. Cause-related marketing

Generate consumer goodwill by coordinating sales that will benefit local charities or nonprofits.

6. Participate with merchant association events

Consider being a sponsor in “Small business Saturday” and other local events. Look for ways to be the dominant sponsor.

7. Network

Join a local organization or associations that have businesspeople as members. A good example is your local Rotary club. You’ll experience positive camaraderie and sales.

The bottom-line: Do your best for your employees and customers, and make your go-to marketing person a quasi part of your team.

In the end, it’s all about relationships.

From the Coach’s Corner, more relevant strategies in innovation and marketing:

Cause-Related Marketing Can Increase Sales by Double Digits — The Biz Coach has long-advocated cause-related marketing. Customers love community-minded businesses. Now, he’s happy to report on a major study.

10 Innovation Tips to Boost Your Long-Term Customer Base — Businesspeople are constantly under pressure. Daily events make it challenging to make critical decisions for financial sustainability. Businesses must innovate to survive.

Tech Checklist to Provide the Best Customer Support — Ever wonder why big chains – from quick-service restaurants to electronic products – print invitations on sales receipts to entice customers to go the companies’ Web sites to comment online? They’re doing it for customer engagement. Businesses need insights on how they’re faring with customers.

Companies Profit Most by Investing in Customer Engagement — Better business performance results when CEOs show leadership in providing the best-possible customer experience. That’s confirmed in a global study.

Powerful Example for Business: Course Correcting in Sailing — Cunning and skill are paramount for success for both business and sailboat racing. A salient concept in sailing is course correcting. Here’s how to apply it in business.

“Treasure your relationships, not your possessions.”

-Anthony J. D’Angelo


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





Seattle business consultant Terry Corbell provides high-performance management services and strategies.