Glyn Mummery, specialist business adviser and insolvency expert in our Brentwood office, discusses the importance of a business getting its marketing strategy right to maximise success and longevity.
As a restructuring expert, I see many businesses falling into unexpected financial difficulty which can often make them beyond the point of salvation, by the time they seek my professional advice. We have an in depth understanding of what can lead a firm into difficult and distressing times, and what preventative steps can be taken earlier in the business cycle to avoid insolvency.
Understanding your customer base and having a clear plan to target them is the foundation of any organisation. This should be a starting point for any business plan and revisited at regular intervals. Having your finger on the pulse when it comes to what your target market wants and needs, is the only way to ensure sales success.
Take Airbnb for example, the business launched in San Francisco in 2008 and has revolutionised the way many consumers choose holiday accommodation. In 2015, it launched a global social media campaign, ‘#OneLessStranger’. The digital marketing activation was centred around ‘belonging’ and the idea that travellers want to feel part of a community wherever they visit in the world, tapping directly into the firm’s proposition to provide home from homes. In just three weeks, 3,000,000 people engaged with the activity, created content or spoke about the campaign on social media. Airbnb is currently estimated to be worth more than $31 billion.
While we see evidence of the transformational impact digital marketing can have on a business, recent research from learning platform Smart Insights shows that almost half of businesses do not have a defined digital marketing strategy in place .
Although we are talking about marketing campaigns on a global scale here, the same applies for every business. Having a clear strategy in place to directly reach your target market, and ways to measure its success, should be at the core of your business plan.
A good marketing strategy is developed one way – through research. Whether it is on a desktop, conducting surveys, holding focus groups, or simply getting out and about speaking to customers, all of this will help build an informed picture of your market. Similarly, staying alert to wider sector trends and macroeconomic issues that will directly impact your business is essential – it sounds like an obvious point but often management teams can be so consumed by the day-to-day, it becomes easy to forget the big picture.
Not only is it vital to understand what your customer base is doing, but you also need to be clued up on competitors. Having an overview of competitor activity will help you identify your own niche and help you stand out from the crowd.
Alongside what can be gleaned from Companies House, a proactive company will put much of its activity into the public domain. Simple online research or signing up to company news alerts will give a good overview of a competitor’s new business activity, new product launches, team growth and overall performance. Attending conferences is also a useful way of gathering industry insight. These events not only allow you to connect with peers, but also to be inspired to learn from the successes of firms that are thriving.
The route to reaching customers is constantly evolving. As we continue to rely more and more on technology and online platforms it is essential for management teams to embrace digital marketing. This is especially true for firms operating in the retail, wholesale or dining sectors. For them, integrating both traditional and online services is essential to the health of their business.
The modern-day consumer seeks convenience, with more people turning online to do their clothes or grocery shopping. Even in sectors like manufacturing and logistics, the first place any prospective client goes to is a website. That is why establishing a neat, user-friendly online presence is so important – first impressions count.
Having an online presence also opens you up to new markets. The web is an international marketplace, giving businesses access to corners of the world they may not have reached otherwise. When designing your website, think global, as you are visible in a much wider sphere than just your home market.
But, whilst a digital offering delivers convenience, ease and speed, there is still demand for a physical presence. Bricks and mortar still have an important role to play, with many customers wanting face to face interaction, particularly when exchanges are being made on high value goods.
Management teams should consider a multi-channel marketing strategy and online services, and how to best marry these to ensure a more beneficial outcome for the business.
The location of the bricks and mortar element of a business – whether it specialises in professional services, a restaurant or a manufacturer – is essential. Being in the right place, at the right time, is key to ensuring success and longevity.
Being in close proximity to transport links or located in the heart of a town will naturally help boost sales. For manufacturers, supply chain links are paramount. Marketing your business as a strategically located firm which operates at the core of an industry will make you an attractive choice for prospective customers.
For those operating in the retail, hospitality and leisure sectors, suitability and visibility of a location is essential for getting people through the door. Popular destinations include dining hotspots, those on the doorsteps of transport links and alongside other leisure venues.
Unsurprisingly, the rent and business rates in popular destinations are expensive. Ensuring these are all mapped into your cash flow forecasts, along with room for inevitable fluctuation, is key to keeping your business in good health. Management teams should consider the return on investment versus location costs, ensuring location is delivering tangible growth for their business.
We have worked with many businesses who have been hit with a rate rise or uplift in rental costs. This can place a burden on finances and dent cash flow, which can impact the day to day running of a business and impede growth. Factoring in room for manoeuvre in your budget, carefully assessing your overheads and negotiating new payment terms with your landlord, is an important part of future proofing a business and avoiding insolvency.
The business cycle operates in peaks and troughs, and is impacted by macroeconomic factors and geopolitical issues, such as inflation and Brexit. That’s why it’s important for management teams to shape and rethink their marketing strategies at regular intervals. It is what helps keep a proposition fresh and relevant, and ultimately will be an important factor in helping to safeguard a business from falling into financial difficulty.
It can also help a business to reshape its current proposition and structure. Diversifying through acquisitions is one route to enter adjacent markets or build on a current offering. Bringing in additional manpower, new intellectual property or extending a business’ footprint – whether that’s having an on-the-ground presence in a new area, or taking on additional assets – is also a good way to build scale and add value.
Often, making these decisions alone can be daunting, which is why having a specialist, independent adviser on hand can make establishing and executing a new strategy more manageable. In an increasingly complex business landscape, it is this support that can make all the difference when it comes to growing a business.
First published in the Essex Chronicle in August 2018.