How to Rebuild Your Company Brand

How to regain pricing power when customer loyalty starts to slip or competitors are gaining more of your market share. Lorraine Rieger McGregor was invited to write an article for Business Review Canada’s blog for the July edition. Read it here.

The Five Essential Elements of a Growth Strategy

1. Customer Focused – It’s based on market research. You’ve got the right product, packaged in the right solution with well thought out support systems that the right target market really needs and wants and you can prove it.

2. The Company is Oriented to Performance – Your people have the kinds of conversations that lead to process improvements through respectful collaborative idea generation. Incentives are aligned to self-responsibility, authority, accountability  and ability to take risks. You provide support and training for those elements to be accessible to all.

3. You’ve Removed the Rub Points – There is a smooth communication flow from what is promised to the customer all the way from sales through order processing, production, billing, delivery and after sales support. You have a feedback loop to ensure what was expected was delivered. And you have policies that set out boundaries for the negotiables and the non-negotiables. You don’t expect your people to dance to the customer always being right (or wrong). Who to blame isn’t a daily way of life in your company: how to solve the right problem with the right solution is.

4. Your People Understand how the Company Makes Money -Sounds simple but it’s not often done. Everyone should know how their expertise and efforts contribute to the bottom line and where they fit in the financial equation. Even the receptionist and the shipper. Each person has a role to play in the efficient delivery of the promise to the customer.

5. You Focus on and Make Decisions Based on the Right Key Performance Indicators – Forward looking, gross margin driven, utilization rates, cash flow and labour tracking. Your indicators should show you where you have cash leaks in the system, before you have to start bailing. First place to look? Do your estimate gross margins on each product become your actual gross margins. Got a variance? Find out why and fix the systemic problems that cause it. (Hint - most problems are systemic, not personal, not one individual’s fault.)

How to Increase Distribution in a Fragmented Market

Case Study Project Description

A manufacturer and designer of wastewater treatment systems for small municipal sites and property developments. The company had emerged from a series of difficult situations and now wanted to expand their marketing efforts. They had one distributor left who was effective at getting this proprietary system sold and several others that had not had a sale.

Project Problem

The company had not had much of a marketing program in place. Their focus was on technical execution and project management rather than marketing and sales. In their industry, competition is ferocious and there are numerous gate keepers and influencers affecting the selection and sale of a system. Standing out from the crowd is challenging without a brand name and reference installations to demonstrate capability and effectiveness. Then the company won a coveted industry award as a result of their customers and competitors nomination. With this opportunity as a spring board, now seemed like the right time to leverage the publicity to find better reps.

Solution

It is always a difficult decision for a company in that business to decide between having their own direct sales force or using manufacturers’ representatives. Wastewater treatment systems are long sales cycle products that require consultative sales rather than order taking. There is a lot of ‘missionary work’ involved in gaining awareness amongst all the influencers. Target marketing can reduce the time to sale by focusing on developers versus municipal sales which can take a lot more effort. However, finding developers is challenging. We helped the company through this decision. In the end, the decision was fairly easy: it would take years for the networks to be built in the US market if the company hired their sales force. Reps would ostensibly have these networks already built.

We set up a recruitment program to find the right reps and develop a territory system and rep support program. We developed a criteria to identify the types of reps we wanted and then arranged to interview them at an international trade show that most attended. Understanding the system technically was the first challenge in the interview and then telling us how they would support the system came next. It became fairly obvious who could take this product on successfully.

Results

Nine new reps were selected. A public relations support program was designed and put in place. The reps received some training and technical manuals. The company won some other awards and this publicity was also leveraged. The biggest challenge the reps faced was getting the first installation in their jurisdiction to prove to authorities the system worked. This process is still under way and can take years. In the meantime, the markets where the system is already installed are continuing to enjoy reference sales.

We’re Growing Faster than Our People Are

Case Study Project Problem

A large sub contractor had the largest market share in their region. They won lots of jobs, were the first pick of many general contractors and were often voted the best place to work amongst journeymen and project managers. Yet, inside the company, the owners were tap dancing as fast as they could. With a shortage of trained people and more and more opportunities coming their way, the management team was working over time, getting increasingly frustrated at their people’s inability to take responsibility to lead and manage. Crises management created a powder keg of issues and tempers were short.

The good news was that revenue growth was through the roof. But were the owners getting any more out of the bottom line besides mental, physical and emotional stress? Was it worth it?

Solution

The first step that we took is to analyze their financial situation. They were unable to get the kind of reports from their financial software that would reveal where they were losing money so we pieced together a trail of documentation to be able to track the variances from year to year. What we discovered was that the gross margin variance was getting larger each year: what they estimated they would earn on each job differed from the actual accounting at the close of the job.

This financial fact pointed to a problem in the systems and processes that their people followed. We found that each person had a somewhat different understanding of reporting and some used software and some didn’t. The fact that the systems were not followed magnified problems and people often blamed one another for not following or using different systems. This created a culture where people would not be motivated to take responsibility for their actions.

By identifying the root of the problem on both the operational and cultural fronts, we worked with the owners and managers on both issues, instituting key performance indicators, performance bonuses tied to producing the indicator information and focused on helping get all systems onto a single software platform. Senior managers and owners all were coached on running effective meetings, their attitudes, methods of dealing with problems, managing clients, holding others accountable, delegation, leadership, decision making, having productive discussions and working with each other’s strengths rather than pointing out their weaknesses.

Result

With a variance reduction goal motivating the owners and the opportunity to clear up many of the systemic problems that have frustrated everyone, the future seems brighter. The company is able to hold more productive meetings resolving issues face to face that would in the past, have resulted in project problems that cause the variances.

Is there a Growth Path for a 20 Year Old Product?

Case Study Project Description

HR Payroll software programs abound. After industry consolidation, most of the small companies had either been bought by the larger firms or gone out of business. This software company had one great product, service and maintenance revenue and a crack software development and technical support team. But their focus had been on research and development for years, and servicing existing clients, not sales. With a new web interface completed and a ground breaking but difficult to understand second product, was there still a future for the HR Payroll system? There were a lot of pluses and a lot of challenges. Was it time for this company to fold? Was there an opportunity to be acquired? Or could growth still be an option?

Project Problem

ERP solutions for human resources, payroll and performance are dominated by the large ERP vendors. In this business, the old adage that ‘those that choose to buy IBM don’t go wrong’ seemed to dominate the purchasing decisions. How could this stable and proven software company get into new markets without being PeopleSoft or IBM? Further, the company had pursued many unrelated markets so reference clients were dotted across the spectrum of industries and geographies. There seemed to be no natural fit into any one target market despite the superb reputation they enjoyed for service amongst their great reference clients. The CEO and the COO were concerned about focusing on only one or two markets unsure as to whether they would yield any results.

Solution

The solution to this problem was to teach them about marketing, market research and market development so that they would understand how to build their own plan. We worked together on the process of uncovering what this product did that other products couldn’t do. It can be hard to look at your own product and spot what others see as the ‘thing that solves the real problem’. By interviewing existing clients, looking at competitors, understanding challenges in various industries, we finally found three distinct claims that everyone ignored that actually had the greatest value for a certain group of prospects.

Additionally after 20 years in business, the product had some very robust functionality and it did not price out after implementation nearly as high as its brand name competitors. When this research was done, then we had to find those organizations that had these problems where the company actually had reference clients and build out a database.

When a company doesn’t have a well known brand name and there is a lot of competition which results in noise in the distribution channel, advertising is a waste of time. Public relations is the best tool. An integrated marketing strategy using PR, Web 2.0, direct email and immediate ‘taste tests’ direct experience is vital. Together we shaped a marketing message, case studies, press releases, a web 2.0 strategy, measurement, KPIs and a lead generation system that tied together to become their call to action. We then coached the senior team in how to work with and use the message, how to build capacity to manage the growth and how to constantly evolve and improve the messaging system so that it would attract motivated buyers within two different and fragmented target markets.

Result

The time-intensive research and market focused discipline combined with a dedication to web 2.0 and public relations approach rather than expensive advertising started to pay dividends. In the first year, they achieved 400% growth in their sales calls and started winning business from much larger competitors. Because of this company’s dedication to service and responsiveness over the years, their few reference clients were willing to become champions for the company. One even voted the software client the most valued vendor amongst numerous other government vendors. Most importantly, we proved that there is a future and that revenue and gross margin growth are possible, even when it looks impossible.

Growth Case Studies

All companies want to grow. Companies that make it to the $10 – $20 million mark often find themselves on a plateau. Revenues keep increasing but the profit margin does not. It is easy to paint a rosy picture but the more you grow the more resources you need to service that growth. Resources consume profit margin.

Managing costs is of course important. Of greater importance is understanding how to increase your gross margin and your offering to the market place. Can you say for sure whether your top ten customers will keep buying year after year from you? Do you know which products make you money and which don’t? Is revenue one off or reliable? Would your customers tell you if aspects of working with your company are a hassle?

There are opportunities for growth where you would never know to look. Want to find out how to rebalance your company and get off the plateau? Call 604-306-7707

Company Growth Case Studies

• Is there a Growth Path for a 20 Year Old Product
• We’re Growing Faster Than Our People Are
• How to Increase Distribution in a Fragmented Market