“Innovate or die” seems to be the common mantra in business today. (more…)
Posts Tagged ‘business development’
The concept for an entrepreneurial guild came to me while researching a response to a recent request for proposal. I was searching for a Blue Ocean Strategy in which the community would make their competition irrelevant by creating a new paradigm. But, what I came up with was a two-fold approach.
First, it was a focus on open source economic development to establish a framework within which to operate where collaboration becomes the mantra rather than competition. Someone once said, Collaboration is what happens when completion fails. Be that it may, collaboration within a regional context may be the best strategy to accomplish their goal. A good example of this approach is the SPARK in Ann Arbor, MI (http://www.annarborusa.org/).
And second, while reading the book The Talent Code by Daniel Coyle, in which he investigates the geographic sources of pockets of talent, I conceptualized the idea of the entrepreneurial guild (eGuild). The eGuild would function much like the guilds of Florence, Italy during the Renaissance of the 1400′s. In these guilds, apprentices worked with master craftsmen for a period of time (five years) to learn the craft (http://en.wikipedia.org/wiki/Guild). The guilds of this period produced Michelangelo and Leonardo da Vinci. A modern day example of a guild is the work of Thomas Malone of the Massachusetts Institute of Technology who champions a variant of the guild structure for modern “e-lancers”, professionals who do mostly telework for multiple employers.
According to the Kauffman Index of Enterpreneurial Activity, there were 530,000 new businesses created per month in 2008. The high failure rates for startups (44% within the first two years) are well known. But, what if, there was an entrepreneurial guild (eGuild) in which a would-be entrepreneur served an apprenticeship to learn those skills to help their business thrive? What if the eGuild was given an equity interest in these firms to keep them engaged in the mentoring of the startup?
As we look across the entrepreneurial landscape, we see that most new business startups, did, in fact start from someone working within another firm, learning the trade and then starting their own firm. Perhaps existing companies operate as unintentional guilds already. But, what would happen if they did it by design? Could we create a structure that would generate a high success rate and provide the employment and expanding tax base that communities seek?
The rain maker is a mythical being (usually associated with the legal profession) who excels at generating new business. Several years ago an attorney introduced me to a new term ” the “rain broker.” The rain broker is a person who, due to his or her unique position in life, is able to connect you with many individuals with whom you could do business. Relationships with these individuals are critical to growing your business. Leads are great, but introductions to qualified prospects are golden. If you want to grow your business, you need to do all you can to identify and nurture relationships with rain brokers. There are several key steps to keep in mind when developing these relationships.
- Identify Industries with Overlapping Customers ” A prerequisite for rain brokers is their exposure to people who could become your clients. You can begin identifying these individuals by looking for companies that market non-competing products to prospects you want to reach. These people will be in a position to refer you to people who could become your clients.
- Search for Ways to Help Your Rain Broker ” Referral fees are nice, but rarely incentive enough to get you an introduction. Look for ways to help your rain brokers improve their core business. This approach has proven to be extremely successful for Conrin. Conrin’s first major marketing campaign targeted advertising agencies. Conrin did not intend to make these agencies major customers, but groomed them to become rain brokers. Ad agencies were targeted because they generate client leads that do not receive sales follow-up. Essentially, Conrin could provide proof (via its closed-loop qualification process) that sales reps for their ad clients weren’t following up on the promising leads the agencies had generated. This provided protection for the agency against claims of campaigns with poor ROI. The relationships this campaign built, on top of the business it generated, prompted a flood of business early in Conrin’s history.
- Say Thank You ” Always thank your rain broker. If you have a revenue-sharing agreement, cut a check immediately. If you do not, don’t be cheap. Take a moment and think, “would I have paid a couple of hundred dollars for that lead?” Of course you would have! Open your wallet and send your rain broker a nice gift.
Relationship selling is always easier than a cold call. By taking the time to develop a large group of rain brokers, you can be sure to have a steady stream of highly qualified leads, regardless of what people say about the economy.
We have all heard the story of General McAuliffe’s response to the German’s surrender ultimatum in WWII. His answer was simple: “Nuts.” The message did not translate very well, but the General went on to win the day. While we are not facing such dire issues today, the economy is not as robust as we would like. We constantly hear about how bad things are: We need government support or the banking industry will shrivel and die. The stimulus is desperately needed or else we are headed to the next Great Depression. Constant news reports on the stock market, unemployment, and general doom and gloom. My recommendation: Turn off the radio. Limit your time on the news websites. Skip cable news altogether. In short, “just say “Nuts.” Focus on two things you can do to improve your situation: your existing customers and potential opportunities presented by the current economic climate.
Your existing customers are the lifeblood of your company in good times. In tough economic times they are the entire cardio-vascular system (and the lifeblood, too). We have all heard about how much easier it is to retain a client versus acquire new customers. Take the extra time to pick up the phone and call your clients. It is a fact that more competitors will be moving into your turf. It is also a fact that people prefer to purchase from someone they like. This is a factor that economists still seem to have trouble quantifying. Quick “how are you doing?” calls can provide a great deal of business intelligence. You might learn about a way you can help your client with financing or creative shipping, or discover other ways that you can be of service during difficult times. This extra service level can help to insulate you against future intrusions by the competition and help you gain market share in the long run. If nothing more, you might buy yourself a second chance in a competitive situation. Financial issues might still rule the day, but a relationship might give you the inside track on a competitive deal.
Regardless of the economic climate, there are always opportunities to do big things. HP and Disney are prime examples of Depression Era success stories. The key is the same as it is in good times. Find a product or service the market needs and provide it with the best possible service. Look for opportunities to leverage your core competencies to provide goods and services in ways you have not previously considered. Also, make sure everything is delivered with the highest level of quality and customer service. When the economy does rebound, you will be in a much better position to fend off the global competition that is sure to be nipping at your heels. Like it or not, those folks are here to stay.
In closing, surround yourself with positive people, shut off the news and make something happen. Someone is going to do it. It might as well be you.
Without a doubt, the economy is not booming these days. Every day brings news of another government bailout plan designed to prop up another failing industry. Record numbers of layoffs provide feature stories on news websites and cable news channels. All of this doom and gloom can lead one to believe that cutting all costs to the bone—and this includes marketing expenditures–is key to weathering the storm. But paring down your marketing agenda is not necessarily the way to go.
Sure, you will want to consider cuts in production when inventory is high. But you should also take advantage of this opportunity to gain market share from your competitors. First, focus on delivering excellent service to your existing customer base. The last thing you need is to lose existing clients at any time, but especially during a time of economic distress. Actively search out ways to help your clients protect their customer bases and increase their sales. There is no better way to get on a client’s good side than to help them survive the downturn.
Once you’ve done that, maintain your marketing and sales activities. The time to expand market share is now, while your competitors are cutting marketing and sales activities to the bare minimum. This may not pay off immediately, but it positions you for expansion when the economy turns around. A Pennsylvania State University Smeal College of Business newsletter, which refers to a newly relevant 2005 Smeal and University of Texas article in the International Journal for Research in Marketing, compares the best businesses to the best-trained athletes: “’athletes often choose times of stress to mount attacks: strong runners and bicycle racers may increase their pace on hills or under other challenging conditions’ to beat out weaker opponents during the most difficult leg of their race.”
So take a chance. Be smart and measure your ROI on your marketing investments. But don’t simply close up shop and wait for the storm to pass. Your staff will appreciate your “take charge” attitude and you will position yourself well for the recovery, or possibly, for the present.
As a refugee of three tech start-up companies, I had the “opportunity” to learn about running a company where expenses exceeded revenues. Several of these previous employers went bankrupt or had their assets sold for much less than the original investment. In all three cases we spent millions of dollars to hire quality people, develop great products and services, and create an all-encompassing killer marketing plan. All of the millions in investment went for naught. We eventually had to cut jobs and costs to stay afloat. No matter what we did we had to face the fact that our sales plan did not reach expectations. While the lessons were learned were in a growing economy, the practical applications remain valid. You can extend the misery by cutting costs, but to survive long-term, you need to have a successful sales plan.
While these concepts are simple in nature, execution and management over an extended period of time can be difficult. The following checklist will give you a place to start:
- Expectations of Sales Personnel – This sounds simple enough, right? It would be wise to confirm this with your staff. I have frequently found that a major disconnect exists between sales teams and management with regards to expectations. Be sure that everyone understands what is expected of them and hold them accountable.
- Driving New Business – Most sales people absolutely hate prospecting. The grind and rejection of prospecting definitely is not on the top of anyone’s list of enjoyable things. That said, prospecting for new clients is critical in a slow economy. Take the time to work with your sales team to identify specific companies to target for the upcoming year. Provide clear guidance on expectations and follow up with your team monthly to ensure activity levels are appropriate.
- Use the Internet – search engine optimization and paid Internet advertising is a very cost-effective way to immediately generate sales leads. What’s more, you can target specific geographic areas that match up with your business strategy. You will want to be sure to consider potential customers in other parts of the country even if you do not currently have a sales representative in those areas. Some regions of the US are still doing quite well economically. You can identify prospects in those regions via the Internet and make your presentation from your home office using a web-conferencing tool.
- Look for “Rain Brokers” – An attorney once told me that while a rain maker is great, it is better to have rain brokers. These are people who have significant contact with those prospects to whom you want to sell. Look for ways your rain brokers can solve their problems by referring you to their customers and contacts. These solutions can be as simple as providing information to their customers as a service to helping them solve a specific issue.
These steps will help you generate additional business with limited additional investment. They will not work, however, unless you regularly measure their effectiveness. Things that get measured tend to happen. Things that do not get measured are almost always forgotten.
For most communities, your best prospects are different than they were 2 years ago, and most companies are thinking differently than they were 2 years ago. So if you’re implementing your marketing strategies the same way you were 2 years ago, you should think again. You need to quickly adapt to the changing economic environment.
We are experiencing a time of tight budgets, overworked staff, and information overload. This not only applies to us as ED professionals, but also our prospects. This will change–maybe sooner or maybe later–but for the time being, how are you changing your marketing efforts to meet your goals during this time? Cost-effective marketing is a must for 2009. Here are a couple of ideas that have been discussed around the office lately:
It is becoming increasingly tough to get the attention of the decision-makers of companies. This is usually due the mass quantities of solicitation attempts throughout the day in any given corporate environment. Our partners and clients who have proven to be most successful at reaching decision-makers have gone to some lengths to infiltrate the administrative shield.
Many marketing experts will advise you that building a relationship with the gatekeeper is truly a necessary step in reaching your target. This can be done a number of ways. Routinely sending informational 2-dimensional materials such as brochures and letters followed up by a phone call is a traditional way that has worked. This is especially effective when mixed with a charming tone or when a great amount of graphic design is incorporated into the materials.
A more effective way to differentiate your materials from the rest of the information in front of the gatekeeper is to send a 3-dimensional item that may trigger an emotion. This creates a memory in the brain that can be a point of reference for a future follow-up. An idea we had for one of our clients with a strong Irish heritage was to have them send a live Shamrock to companies that are suspected of having relocation or expansion needs. Building on their branding theme, a Shamrock is directly related to the region and gives the emotional feeling of “growing.” A Shamrock is an item that will most likely not be discarded with other marketing materials. It will most likely be placed on a desk and enjoyed. The call that you make to this company is no longer cold, as you have now established a reference point.
You could even go the extra mile by sending a watering can, followed-up by a planter, followed-up by a soil and seed mixture. This adds an element of humor and eager anticipation for the next item that will definitely be memorable. The more memorable you are, the more effective your marketing can be. The outcome of this investment is well worth the minor cost incurred.
Other cost-effective things to think about:
- How much will you PAY a potential prospect to visit your town or have a 1-hour meeting with you? How about a $100 donation to a designated charity of the prospect’s choice?
- Attract more visitors to your website by setting up a Scavenger Hunt, where the participants are asked questions about your community. Establish a prize, such as an iPod, for the winner.
- Hire a seasonal intern from a local university to develop a complete Web 2.0 marketing campaign. Social media outlets like YouTube and Facebook are literally free ways to market not only to current executives, but up-and-coming future executives. (Very proactive communities are targeting Millennials and younger on Facebook.)
- Are you promoting your local banks, which were not as affected by the mortgage crisis and still have lending power? Companies are looking for this.
- Your best prospects may have changed without you knowing. We’re very interested in discussing marketing ideas. We’re also very interested in assisting our clients in discovering which industries are shifting in this economic time. If you’d like to join the conversation, call us.