Customers should be beating down your door to buy what you sell. If they’re not, that’s a sign that you need to overhaul your strategy -- right away.
When I work with growth companies, one of the biggest warning signs of a weak strategy is that customers aren’t raving fans, addicted to what they sell. Instead, their sales are flat or declining.
Poor gross margins are another red flag. If customers aren’t willing to pay your prices -- and you have to give your product away to generate top-line revenue -- that means your product has become commoditized. You’re not specialized enough for customers to recognize what’s different about you from everyone else, so they turn to whoever has the cheapest prices.
If these situations have snuck up on you, now is the perfect time to tackle them. You’re probably planning or holding your annual strategy session now. At growth companies, the company’s marketing strategy is usually synonymous with its overall strategy, so that’s where your focus should likely be. The marketing committee was the only one Steve Jobs chaired at Apple (aapl). He showed up for its weekly meeting every Wednesday afternoon.
When you look for holes in your strategy, consider how you’re tackling the four Ps of marketing: Product, Place, Price, and Promotion. These are all areas where you can differentiate yourself. You may need to fix your problems by focusing on a different P. Look at Netflix (nflx). It upset its customers by changing its pricing and began to lose them. It got out of that mess by focusing more on its product, by offering more original programming, following the HBO model.
But you also need to look at the 4Es of marketing, as Ogilvy defines them (Experience, Everyplace, Exchange, Evangelism). These days, customers have more choices over when and where they buy things, so every company should look for ways to stand out. The experience a customer has in buying and using your product is a critical component. Ogilvy’s article should be required reading for every growth company CEO.
Fixing a problem with your marketing strategy takes commitment. Don’t expect to solve it at your annual strategy session. You and your leadership team need to lock yourself in a room once a week for breakfast or lunch and talk about it until you get it right. Strategy isn’t something you should expect to tackle once a year.
How do you know if a new strategy is working? That’s the easy part. Customers will start flocking, and sales will feel effortless. Your biggest problem will be keeping up with all of the new business that’s flowing your way. Then you’ll face a new problem: making sure the execution of your strategy is spot-on. If you want to have a strong bottom line, you’ve got to get that part right, too.