Driving the vehicle for business success

admin — Mon, 31 Aug 2009 21:52:42 +0000

Driving the vehicle for business success

Posted: August 31, 2009 - 3:52pm

Most of the companies I meet with already know that an effective marketing strategy is key to reaching their revenue goals. Either they are brand-new to the industry, they have "hit the wall" (the way they used to get new business isn't working anymore), or they recognize the opportunity to slingshot their business forward by proactively marketing in a down economy.

But despite understanding the importance of marketing and its correlation to revenue, meeting with a marketing firm for the first time can still feel like you're stepping onto that stereotypical 1970s used car lot. You're nervous. But lots of people buy cars - great cars - all the time.

If you don't know much about cars, however, it's going to be hard to tell what you're looking at. You're not really sure you know the difference between the "nuts and bolts" and the "bells and whistles." You wish you knew whether it was running well or just running. And then you've got this sales guy, some guy named Doug, asking you how much you can spend.

What is your budget?

If you don't know, you're definitely not alone. In marketing, just like in the automotive world, there is a solution to meet your needs. But without a clear idea of your budget and your expectations, you run the risk of either feeling let down or ripped off. After all, if you know where you ultimately want to go, it's going to be much easier to identify the best vehicle to get you there.

When setting a marketing budget, there are no hard and fast rules for how much you should invest. Generally, companies look at marketing as a percentage of their gross revenues and spend anywhere from 2 percent to 20 percent on marketing, which includes a whole spectrum of activities that will (a) create satisfied customers and (b) produce the profits that allow you to continue doing business.

With a marketing budget of any size, it's important to keep in mind that your marketing dollar is supporting two types of investments: the initial investment of establishing or upgrading your presence, and the ongoing investment of maintaining your presence in the market.

In car terms, your annual budget will buy the car you need and put gas in it. If you decide that your goals will be better satisfied through greater visibility, your budget should leave room for the spoiler, lift kit, winch or iridescent paint job that gets the results you want.

Key budget variables

To determine what's appropriate to meet your business development goals, give yourself a theoretical starting budget of 10 percent (which is a general recommendation by the U.S. Small Business Administration and SCORE) and then consider this list of key variables as you add and subtract percentage points to or from the budget:

How big is your business? Small companies add; large companies subtract.

A company with $2 million in gross revenues may invest 8 percent to 10 percent in order to make a worthwhile impact. That $160,000 to $200,000 per year is working hard with the sole purpose of attracting the customers who create your bottom line. In larger companies, a smaller percentage of the gross goes farther. A $100 million company investing 2 percent is still devoting $2 million to marketing, on top of the visibility a company of that size already has working in its favor.

Who is your audience? General audience add; specific audience subtract.

Companies that occupy a very specific niche or deal exclusively with government contracts will likely invest less than average, while companies that have to vie aggressively for business-to-business or business-to-consumer loyalty will have to invest more.

How long have you been at it? New marketing efforts add; established marketing efforts subtract.

If you're launching a new business or new product, or if you haven't had an active marketing presence, it will take more time and money to register in the consumer's mind. A strong first impression can be the key to success. For example, McDonald's set aside more than $100 million in marketing to support the May 2009 launch of its premium coffee product, McCafé. By July, according to Brandweek.com, McDonald's sales had risen 3.5 percent nationally and 4.8 percent worldwide, while overall restaurant traffic declined by 2.6 percent from the previous year.

What is your competition doing? Active competitors add; complacent or non-existent competitors subtract.

It's always good to know what your competition is doing. Determine what your competitive advantage is and then broadcast that message. Consider the above McCafé example from the perspective of Starbucks.

If the percentage of your revenue dedicated to marketing ends up being on the high end of the range, you are likely a small business that serves a general audience and faces healthy competition. You may either be new to the market, have a new offering or never needed to market much in the past.

As your business grows, as your ideal customer crystallizes and as you establish a stronger market presence, your percentage of revenue invested in marketing efforts can decrease. Many successful organizations, however, choose to maintain that "new to market" mode even though they have established a firm footing in the marketplace.

Regardless of your position, a continuous audit of your marketing efforts' effectiveness will ensure the best allocation of your resources.

Doug Hay is Linden's business development manager.

View the original the Northern Colorado Business Report article at ncbr.com.

Odell, SAFEBuilt among Best to Work For in Colorado

kendra — Wed, 05 Aug 2009 21:36:55 +0000

Odell, SAFEBuilt among Best to Work For in Colorado

Posted: August 5, 2009 - 3:36pm

DENVER - Two Northern Colorado companies made the 2009 list of Best Companies to Work for in Colorado by Colorado Biz magazine.

Odell Brewing Co. of Fort Collins ranked ninth and SAFEBuilt of Loveland came in at 14th among small companies with 25 to 99 employees in the magazine's August issue. Both companies were new to the annual list.

Among the things that make Odell a special workplace, according to the magazine, are classes conducted for co-workers at "Odell U;" a weekly beer allotment; and a five-part class for all new employees conducted by Founder and CEO Wynne Odel.

SAFEBuilt, which provides third-party building department services to government entities, stands out for its family-oriented newsletter; company credit cards, cellphones for business use, cars that employees can drive home and a $100 logo clothing allowance at Land's End e-store.

Incidentally, both Odell and SAFEBuilt were honored in March by the Northern Colorado Business Report with Bravo! Entrepreneur Awards for 2008.

Source: Northern Colorado Business Report

News Posts from August 2009

Driving the vehicle for business success