Case Study: From Red to Black, Generate Double-Digit Sales Increases Through Strategic Marketing

Conventional wisdom states that when times are bad and sales are down, management should cut all expenses except sales and marketing. And when things get really bad, management must cut everything but sales because selling is the fastest way to increase revenues.

This business-to-business case study illustrates how, if executed properly, strategic marketing can sometimes be a quicker, more efficient and more effective way to grow sales.

The Situation

A manufacturing firm’s brand enjoyed high name recognition, and the longstanding business had survived and often thrived through multiple business cycles during its storied history. A competent management team had been assembled and was balancing operational needs with cash-flow requirements.

However, sales of the manufacturer’s primary division were declining and the market for its products was in a severe depression. The lack of volume meant the company was not covering its overhead. Escalating energy and raw material costs were eroding profit margins.

Product and Distribution Channels

Market perceptions of its products were mixed. The company had a strong reputation as a manufacturer of “green” building products, but it was not well regarded for solving end-user problems. The firm was not in a position to compete on price.

Although the company’s products were esteemed by specifiers and designers for being sustainable and other specific performance attributes, many end-users were put off by the high cost of the products, and sometimes found these products to be difficult to work with and of questionable quality.

Low sales volume and slow inventory turns decreased the company’s value to channel members and kept new distributors from taking on the line. To cut costs, existing distributors reduced their inventories of the company’s products, and dropped slower-moving niche items manufactured by the firm entirely.

In response, management hired a full-service marketing firm and undertook a full-blown marketing and advertising campaign. The marketing message trumpeted the environmental friendliness of the firm’s products but failed to communicate their other performance values.

Choosing Strategic Priorities

Rather than simply initiating a typical marketing campaign, the company needed to find:

· A high-volume application…

· In which it could be cost-competitive…

· In which it had a different story to tell…

· In an expanding market, enabling growth without having to take market share…

· And reestablish its value to distributors.

Internal Assessment

The company’s primary product is a fiber board used for various purposes by construction trades. Reducing sound transmission in buildings appeared to be the company’s best opportunity to generate volume. Multi-family projects that required sound reduction could require multiple truckloads of product. The firm already marketed this application but was not emphasizing it.

The company’s sound-reduction product performed well and was cost-competitive in flooring applications. It was installed very differently than the products dominating the market. Competing products were sold directly to specialty contractors, bypassing traditional distributors and contractors.

The housing market had collapsed with no recovery in sight. The lack of money for down payments, overly strict mortgage requirements, and fear of declining home values crippled demand.

Still, people needed places to live. Apartment construction, while also down, remained viable, and increased demand was forecast for the foreseeable future. Demographic changes predicted surging demand for student housing and assisted living. Changing consumer tastes were boosting the desire for urban living. The Federal government’s spending on affordable housing, often in the form of apartments, was increasing in an effort spur economic growth.

Executing the Strategy

A volume application had been identified that met the company’s strategic imperatives. The marketing group now needed to focus all its resources on implementing the initiative as quickly and inexpensively as possible against larger, better-capitalized competitors that dominated the market. Every problem perceived by customers that could hold back sales needed to be solved.

How

The marketing team implemented a wide array of tactics to support the new strategy:

Brought It Inside. To reduce cost, the firm terminated its engagement with the full-service outside marketing agency and brought marketing in-house, with assistance from independent professionals.

Aligned the Messaging. The marketing team developed a compelling tag line aligned with the new strategy. The message was simple and specific, yet universal to the company’s other product lines.

Developed Aligned Materials. The team conveyed its solution and addressed all known obstacles through new marketing tools in a wide variety of mediums, including video, website, packaging, sales aides, installation graphics, product sheets, trade show booths and more.

Accessed All Available Channels. The team tapped all available cost-effective channels to disseminate the message, including the company website, YouTube and industry related third-party websites.

Quality Improvements. The marketing team communicated quality improvements needed to increase market acceptance to operations. The Operations Department innovated and made improvements. Third-party testing labs were engaged to refute end-user performance concerns and induce confidence.

Bottom Line

The shift in marketing strategy contributed significantly to turning around declining revenues into consecutive year-over-year sales increases of 20% and beyond. Identifying and targeting an expanding market segment supported this growth in sales. Increased market share remained a goal but was not required for significant recurring revenue increases.

Companies that follow conventional wisdom run the risk of leaving core problems undiagnosed and fail to turn sales around. The strategic marketing process avoids this pitfall. Strategic marketing effectively gives the sales force an improved product to sell and a better market to sell it into, thereby propelling increased sales at a rapid rate.

The company could not have sold its way out of declining revenues without first changing its go-to-market strategies. It needed to find a market opportunity that met its strategic imperatives and provided a focus point for success. Compelling marketing messages provided efficient market penetration in a way that selling by individuals or teams could not.

If done innovatively, with an eye on costs, strategic marketing can be the fastest way to spur sales growth.

Why Inexperience Will Cause Newbie Internet Marketers to Fail

Failure. The one thing all Internet marketers never want to hear. And that is understandable Nobody wants to fail, right?

I have researched some of the reasons why most newbie internet marketers fail. In this article, you may identify yourself – or others you know. This article is not meant to be one of condemnation. It is being delivered so you can identify what areas you can improve and avoid the dreaded “F” word!

First, let me state up front that I mean nothing derogatory with the term “newbie.” Everyone was a newbie at some point in time. It is kind of like being a called a “rookie” in major league sports. Once you have that first year under your belt, you are no longer a rookie. The same for internet marketing. However, a “newbie” could mean a 5 year marketer if that person continues to make “rookie mistakes.” I am using the term “newbie” simply because most new comers to internet marketing are looking for the “quick buck” and most tend to make the same mistakes – “rookie mistakes.”

It is my intention to provide you with the information I have discovered and identified my own shortcoming with as well. I may not have made all of the mistakes I will get into, but I have made more than one of them (I can attest to that)! But I am including a few of the others I have not made (phew!) because I have found there are many people who have made them.

The Number 1 Reason Why Newbie Internet Marketers Fail:

They Do Not Have the Experience

That is pretty clear, right?

Most newbies lack the experience of marketing a product in which they never have a face to face interaction with their clients. Most people understand about face-to-face marketing and the art of “smiling, agreeing with the statements made by the customer, etc.” Internet marketing is a completely different environment.

Experience in this area is the only way to gain the skill set necessary to be successful. Does that mean the newbie marketer is already destined to fail? No. It means the newbie marketer must make the extra effort to ensure success.

By learning the methods needed to capture the attention of the buyer; learning what the potential preferences are of the buyer; learning the reasons why the buyer desires their product; learning how to communicate the advantages of their product to satisfy the buyer’s needs – all without any verbal interaction. Only using the written word (and in audio or video marketing as well – but the newbie will never “see” the client).

This means the new internet marketer must make a concentrated effort to study the market; study the products; study the tactics used by the experts. This takes time and dedication. It means admitting you do not know everything. It means admitting you cannot do it on your own (as least not right away). It means accepting the fact that immediate riches will probably not be flooding into your back account right way.

Now, there are exceptions to every rule. But those exceptions are few and far between. But most newbie marketers (myself included when I first started out) think “they” will be the exception and will reach financial independence ahead of their peers. This mindset will almost always result in discouragement and failure.

What are the ways to overcome this “Inexperience Factor?”

Probably the best way to gain experience is by “doing.” That sounds simple enough, right? But let me explain…

The worst thing a newbie can do is to enter the highly competitive field of internet marketing and think he or she is going to become rich overnight while competing against some marketers who have been doing this for years. The best solution to this situation is to team up with an experienced marketer who can guide them through the first stages of internet marketing and help the newbie avoid some of the pitfalls that plague newbies and drive them from success straight into failure.

There are numerous places to gain that type of experience and information. It would take volumes to write about each one. My intent here is simply to make the newbie marketer aware that “you are not destined to failure.” As a matter of fact, failure in and of itself is also a learning tool. Thomas Edison was quoted as saying, when questioned by a reporter as to why he was not discouraged after failing 10,000 times in making the light bulb, his answer was, “Why should I be discouraged? I found 10,000 ways it would not work!”

So it is with gaining experience in internet marketing. You can go the way of 10,000 failures on your own, just so you know not to try it that way again, or you can read about the one or two ways a person who has had success did it and then follow the same path. I’m not talking about “copying” the person (though some advocate that). I’m talking about seeing what your comfort zone is; I’m talking about what “clicks” with your personality, experiences, desires and goals.

Not every method works for every person. If you examine successful marketers, almost all of them utilize the fundamentals but then they tend to specialize in certain areas. Take, for example, a football team. You see the players all decked out in their uniforms and you can rationally say about any one individual, “He is a football player.” And that statement would be true.

But if you look at the individual players and analyze their strengths and weaknesses, you soon realize that some of them weigh 300+ pounds. That person probably is not a wide receiver or a running back. Most likely, he is a lineman. Another is short and lanky and you see him out kicking field goals all practice long. You see a player throwing balls through tires hung at different levels and different yardages – he is probably a quarterback. Each person has a unique set of skills they bring to the “football team.”

So it is with internet marketing. You may not be cut out to be a marketer in the self-help niche. You may be more of a hands on type of person who enjoys working on cars or building houses, making you uniquely qualified to assist others in that niche. People looking for information on “How to fix their car” or “How to remodel their kitchen.” Others may be more uniquely qualified to give “relationship advice.” Others on “How to build a website.”

You see, there are 1,001 different ways (actually more than that) to make a living as an online marketer. YOU have a special skill set that somebody needs to know. And you have the opportunity to share the experience you already possess in that area – and be paid for it! You need to sit down and ask yourself (and give an honest answer), “What do I know that other people always ask me about?”

It could be anything from repairing a clogged drain to fixing a car engine; from hanging dry wall to installing landscaping. Whatever you enjoy doing; whatever you are always helping someone with; whatever people are always seeking your advice on – these are the areas you need to focus. This is probably going to be your niche market. This is the area you will probably be the most successful.

The successful marketers are able to identify what they did wrong and begin to take corrective action to put them on the path to success. Failure to identify weak areas will just mean the marketer is more likely to repeat the same mistakes over and over again.

The 2 Most Deadly Sins of B2B Marketing

There are two major reasons why marketing is failing at your small- or medium-sized B2B firm:

You view marketing as business triage. Your company applies a collection of tactics (often labeled as a “marketing campaign”) only in response to a problem; typically involving the loss of a key client, or decline in revenue. When business is good, little or no time is invested in marketing. When business (inevitably) takes a dip, only then does marketing becomes a priority.

You expect marketing to deliver immediate results. Either because your company always views marketing on a “cause & effect” tactical basis, or because marketing triage must be applied quickly to revive an ailing company, the marketing function is given insufficient time to produce tangible results. It’s no surprise that marketing professionals have the shortest tenure of any corporate function in the asset management business.

The hard truth is that very few B2B business owners either understand the marketing function, or have the discipline to design, implement, measure and adhere to a consistent marketing approach that builds brand equity and market engagement over a sustained period.

To establish the infrastructure and internal culture necessary for the marketing discipline to succeed, we offer the following simple path:

  • Create a Written Marketing Plan. This need not be in a 3-inch binder; a two-page document is often sufficient. Include goals, strategies, responsibilities, timelines, budgets and ways to measure results. Without a Marketing Plan you’ll waste lots of time and money. And unless it’s a written document, you won’t have commitment or accountability.
  • Gain Senior Level Commitment. The honcho in corner office (which might be you) must understand, endorse and support the Marketing Plan. This involves more than lip service. If your Plan isn’t properly staffed and funded at the outset, there’s no real commitment to marketing.
  • Do a Few Things Very Well.Your marketing success will be based on the quality and effectiveness of a limited number of strategies / tactics. Firms sometimes go overboard, thinking there’s a correlation between the size of its marketing investment and business results. But less is usually more, in terms of marketing ROI.
  • Build and Nurture your Database.Direct and easy access to your company’s clients, prospects, referral sources and opinion leaders is essential. Without an email pipeline, the marketing value of the content you create is close to zero. If your firm’s thought leadership simply sits on its website or social media, you’re missing the opportunity to build relationships with people in your target audiences.
  • Create Meaningful Content. Self-serving, long-winded white papers and research reports have very limited appeal. Generate content that validates your company’s intellectual capital, that’s easy to read, and focuses on timely topics that people have a genuine interest in.
  • Drive Top-of-Mind Awareness. To be included on the short list of candidates for an assignment or sale, you need to build awareness with key decision-makers. To accomplish that goal, share your content directly with target audiences on a quarterly basis. (More frequently than that, and you may be viewed as a pest.)

Most importantly – with apologies to Glengarry Glen Ross – B2B firms must commit to:

A… Always

B… Be

M… Marketing

… for the discipline to be effective. Otherwise, the traditional short-term, hair-on-fire approach to business development will keep your company from ever reaching its full potential, regardless of its quality or reputation.