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The hidden champions of the business world

October 02, 2014 by Ron Immink

The hidden champions of the business world{{}}What do Baader, McIlhenny, International SOS, Hoganas, Tetra, Bobcat, Gallagher, Seas Getter, Hamamatsu, Arnold and Richter, Petzl, Lantal, Tandberg, WET, De La Rye, Belfor, Ulvac, Gartner and EOS have in common?

They are all companies you have probably never heard of. They have global market shares of over 50% in their sectors and have been around for a long time.

These are the “hidden champions” or “supernichists” according to Hermann Simon, author of Hidden Champions of the Twenty-First Century: The Success Strategies of Unknown World Market Leaders.

So what can we learn from them?

These businesses have embedded themselves in the value chain of their clients; and they are the undisputed market leaders in their niche. They focus on narrow, small markets and become the best in that market.

Their strategy is to dominate market niches by transforming general markets in which they are a nobody into market niches where they are somebody.

They are mostly family businesses. They are often based in rural communities. They have a long term perspective. They have CEOs that have been there for over 25 years. The CEO is most likely to be the owner. They are customer-focused and they look after their staff extremely well. They invest in training and innovation. They are ambitious but they stick to what they do best. Above all, they deliver superior quality.

They have grown by going global

All of the companies have an international focus. They focus on China, Russia, India. They know that Japan is a source of innovation (“What happens in Tokyo today happens in the rest of the world tomorrow”). All their managers speak at least three languages, and increasingly their people reflect the diversity of their client base.

Selling versus marketing

Approximately 70% of these hidden champions only sell directly and maintain intensive, lasting relationships with their customers and suppliers. They have five times more contact with regular contacts then “normal” businesses.

Innovation is key

They spend double the average spend on R&D. Because they involve staff in vision, values and strategy, innovation is easier. And of course they involve their customers in the innovation process. The main focus is on ongoing improvement versus breakthrough innovations.

Knowledge-based organisation

The typical “hidden champion” is a one-product, one-market company with limited organisational complexity. The top management is very lean and leaders tend to be promoted from within. They have high-performance cultures and are intolerant of shirkers. Shirkers get fired. If you stay, you stay for a long time. The average length of service is 37 years — which allows the organisation to retain knowledge and expertise.

Key lessons

  • Ambitious goals can only be achieved by focusing one’s resources;
  • High performance requires intolerance against shirking;
  • Uniqueness comes from within. It requires depth and a certain reserve toward outsourcing;
  • Globalisation opens up growth opportunities, even for small companies;
  • Innovation is the only effective long-term means of succeeding;
  • Closeness to customer almost automatically creates competitive advantages.

You can do it

The message is simple — you can do it too. Hidden champions teach us that instead of managing only one great thing brilliantly, good management means doing many small things better than the competitors. The sum of many small advantages ultimately leads to success. Genius is not required.

Copyright © 2014 Ron Immink, CEO and co-founder of Small Business Can and Book Buzz — the website devoted to business books.

Marketing - the real winner of the Scottish referendum

September 29, 2014 by James Walters

Scottish referendum{{}}The Scottish Independence vote was a once in a lifetime opportunity. It was a triumph of democracy and 97% of Scotland’s citizens are now on the electoral roll. This means that there are two real winners from the referendum, the people who organise the jury service (97% of people are now eligible for jury duty) and marketers.

Not only do we have almost all of Scotland’s population’s data available to access on the electoral roll, but we also get to examine a marketing case study like no other.

The key to marketing success: combining the rational with the emotional

The referendum was an example of two very different styles of marketing. The Yes campaign, headed up by Alex Salmond, was all about emotion. The Better Together campaign, headed by Alistair Darling, was all about rational considerations.

Despite the victory for the Better Together campaign, it’s not a clear that they ran the better campaign. The reality is that both campaigns were lacklustre in some ways.

The Yes campaign made a basic marketing mistake. It was all spin and no substance. You might think that’s a bit unfair, but when your campaign is basically the marketing equivalent of trying to re-create the “They cannae take our freedom” speech from Braveheart and you get accused of lying about things, then it’s a sign that on some level you have failed. In the end, their campaign lacked solid foundations and cost them victory.

What can you learn from the Yes campaign?

Emotional appeals aren’t everything. You need facts and figures.

The Better Together campaign was about the rational. Alistair Darling quizzed Alex Salmond about the economy, what currency we would use, what the impact on jobs would be. This is important, of course, but it’s boring. There wasn’t any emotional appeal. It was a total snoozefest. This failure meant that polls started to show leads for the Yes campaign and caused Better Together to panic.

What can you learn from the No campaign?

No matter what YouGov says, quantitative surveys aren’t all they are cracked up to be. Dan Hodges put it best during the referendum when he pointed out that the poll which showed the Yes campaign had its first lead was the result of just 13 people saying they would be voting yes. If you’d asked them on a different day, got them in a different mood, or asked others, the results could have changed drastically and the entire narrative of the campaign would have been very different.

With surveys, you need to back up the data. Look at search trends and combine this with some qualitative analysis from interviews and focus groups to get a much stronger idea of what your results mean.

The turnout for Scotland in the 2010 General Election was almost 64%. For the Independence Referendum it was almost 90%. What’s more, 97% of Scottish citizens registered to vote. In marketing speak, 97% of Scotland entered the sales funnel and 85% of them responded. I’d kill for those sorts of stats.

So, what’s the difference between the referendum and the general election? The referendum was seen as important — it would have a tangible effect on people’s lives.

That’s why you need to find out what matters to your target audience and use it as a hook to solve their pains.

Copyright © 2014 Steve Haynes, SEO and site optimisation consultant for inbound marketing agency, Tomorrow People.

The essential ingredient that marketers overlook

August 21, 2014 by Richard Edwards

Flowers{{}}Business advertising spend in the UK hit a new high of almost £14bn in 2013 and is set to increase to £14.8bn this year. But are businesses getting their money’s worth?

Personally, I doubt it. And the reason is that most businesses will miss out on one essential ingredient: experience.

Experiential marketing helps consumers contextualise the narrative behind your product and service.

Let’s take perfume as an example. Perfumes are, functionally speaking, a mixture of ingredients that produce a pleasant smell.

But people don’t wear perfume for the constituent parts; they buy it for the experience, they buy it in the hopes that they will feel attractive and desirable, and they buy it to give them a sense of confidence.

How is this experience achieved? By creating a holistic experience of the product.

It starts with advertising. Perfume ads usually feature a model sauntering around looking sexy; there is usually a husky voice saying abstract words like “adored” or “eternal”; and there is either lots of colour, for fun adventurous brands (think Joop!), or black and white, for brands that focus on being sexy and powerful (such as CK).

Next comes the in-store experience. The bright lights of each perfume shelf, the imagery displayed nearby — all are designed to continue the experience.

The bottle is also key — it takes the experience from store to home. Some are rough and jagged, others are sleek and curved.

And every time the customer uses the product, they experience that vision.

How does this translate to my business?

You might say: “But my business is in accounting software, not perfume.”

But you can still apply the same thinking. Experiential marketing relies on bringing together five distinct dimensions into one holistic experience:

Feeling. What will it feel like to use your product or service?

Sensing. How do customers physically sense your product?

Thinking. The experience still needs to take into account the rational, logical value of your product or service. How obvious can you make the benefits of your product? Can you illustrate its potential with a demo?

Acting. What behaviours will your product help to facilitate? Changes in behaviour can be highly motivational and empowering, such as Nike’s classic Just do it tagline.

Relating. How does your product or service link the customer to others, or even to a projection of their future self?

As the Chinese proverb goes: “Tell me and I'll forget; show me and I may remember; involve me and I'll understand.”

Copyright © 2014 Richard Edwards, director of event and customer experience specialist Quatreus.

Can your marketing make people feel good?

July 07, 2014 by Sharon Tanton

Feel good clouds{{}}Many small business owners feel uncomfortable about marketing. Some positively hate it.

A new client of ours — the head of a very successful consultancy — has shied away from marketing for years because to him, it feels intrinsically wrong. In his eyes, markeing is putting on an act, pretending to be something you’re not. Like many people, he thinks there’s a dishonesty at the heart of marketing that doesn’t sit easily with the way he feels about himself or his business.

He’s not the only one. Pretending to be something you’re not is never a good feeling.

Don’t be a pushy marketer

We all have a short fuse when it comes to being marketed at by pushy marketers — cold callers, spammy emails, incessant amazing never-to-be-repeated deals (until tomorrow, that is, when you get them again). And that means we don’t want to be that pushy person ourselves 

We say look at marketing differently. When you approach marketing from the standpoint of ‘how can we help our customers better?’ rather than ‘how can we sell more stuff?’ it becomes easier. And, it works more effectively. It’s easy to switch off from a marketing message, it’s not so easy to switch off from something that genuinely answers a question that’s been really bugging you.

Right now, it would be impossible for me not to click on something that showed me how to get my 16-year-old son to revise.

You’ll stop seeing it as pushing, lying, or manipulation if you don’t push, lie or manipulate. Create marketing content that is genuinely helpful and you take the pressure off yourself.

Of course feel-good marketing is only possible if what you’re selling makes a difference. But that doesn’t mean you have to be Greenpeace, it just means you genuinely want to improve your customers’ lives.

Do good to feel good. That’s feel-good marketing.

Sharon Tanton is an expert contributor to Marketing Donut, creative director at Valuable Content and co-author, with Sonja Jefferson, of Valuable Content Marketing. 

The true value of a drink in the pub

May 28, 2014 by Grant Leboff

The true value of a drink in the pub/Pouring whisky into glass full of ice cubes{{}}It was while enjoying a series of single malt whiskies, in the Three Crowns Pub, that I was reminded of a marketing lesson that too many businesses are missing in this new digital world.

On finishing our drinks, I asked my brother if he wanted another round. After agreeing to have “one more for the road”, I duly went to the bar and ordered another couple of doubles of Glenlivet. The price I was charged would have made the bottle of Glenlivet just over £100. Yet it is widely available to buy by the bottle for around £30.

Why spend so much extra? I could have easily bought a bottle of Glenlivet in my local supermarket and sat at home with my brother. The drink would have been of equal quality.

What is value?

The point is that the value was not in what this pub supplied — the drink. There are other pubs that sell the same brand, and there are also many other ways I could have purchased the whisky, many of which would have been more cost-effective.

Rather, the value was in how the pub delivered the product. In supplying pleasant surroundings, a comfortable place to sit, a good atmosphere, a log fire and showing the football, the pub created an experience that was bigger than just the quality whisky. The totality of the experience made the cost of the product acceptable at that moment in time.

Moreover, although this particular pub’s main product is beverages, the landlord had thought about other items a customer may want during their visit. Snacks including crisps, nuts and bowls of chips were available. There was also a quiz machine to play. OK, this is pretty standard inventory for a pub, so why the big deal?

The digital economy has seen the increasing commoditisation of products and services — whether you are a business-to-business company, or a business supplying consumers. We are all now working in the experience economy. Of course, products and services have to be delivered to a high standard in order to compete. However, today that is just the price of entry into any particular market.

The customer experience

The value for the customer is no longer in what you do. Your clients will, more than likely, have a multitude of options, of which you will be just one. The value is in how you deliver the product or service. It is the experience that will differentiate your business. It is also the experience that is more likely to be talked about, shared and which will generate referrals.

Moreover, what you deliver is likely to be the same as a number of other suppliers. This being the case, this is not where the value lies in your business. The most precious resource today is people’s attention. So the value in your business is more likely to exist in data and the customers you supply.

In other words, the real worth of your business is in the engagement and trust you have with your client base. The more you can deepen this, the more valuable your business becomes. Being able to provide added value to “the experience” enables an organisation to earn more money while creating more engagement and value for the customer.

Understanding your customers’ challenges and the contexts in which these occur, will enable you to create new offerings and obtain a greater share of a customer’s wallet. It means being truly customer centric and understanding what else a customer may require when they engage with your business. In other words, what is the equivalent of your crisps and nuts?

When jazz musicians Melvin “Sy” Oliver and James “Trummy” Young wrote the song ‘T’ain’t What You Do (It’s The Way That You Do It) in the 1930s, little did they know they would be providing the perfect comment on marketing in the digital economy.

Ultimately, what you do allows you to exist, how you do it enables you to compete and differentiate. Too many companies focus all their energies on what they do, rather than how they do it and for whom.

Now that is sorted, I am off for a well-deserved single malt! Three Crowns anyone?

Grant LeBoff is an expert contributor to Marketing Donut and CEO of the Sticky Marketing Club.

Key ways to motivate and retain your best staff

April 09, 2014 by Andy Preston

Key ways to motivate and retain your best staff/Many mugs with I love my staff. I love my boss{{}}In the current market conditions, businesses rely on their key members of staff more than ever — especially as organisations downsize, cut costs and freeze recruitment plans.

However, what plans do companies have in place to retain, motivate and inspire their key members of staff? Or are you taking those members of staff for granted? What about the staff who seem to have been around forever or the people that have been ultra-reliable, that you count on and put a lot of faith in?

These are the people who have been working harder than most for a long time. They are the people who put in extra hours without question — the people you can leave to handle things when you’re away from the office; the people who you can rely on to give you an honest assessment of what’s going on.

Yet these are also the people who often get overlooked or taken for granted. They get disillusioned, lose motivation and start looking for other opportunities.

Who are your key members of staff?

For some firms, it’s the head of accounts or credit control who keeps late-payers in check and makes sure the cash flow is where it should be. For others, it’s the top salesperson that outperforms the rest and brings in large amounts of profit to the organisation. It could also be the head of the admin department or office manager that keeps everything running smoothly.

Now, more than ever it’s important to motivate, inspire and retain these key members of staff to ensure business efficiency, productivity and profitability.  So how does your company measure up?

How can you identify the key players?

As conditions change, the key players in your team may well be different than the key players in the past. So how do we identify the key players now as well as the likely key players in the future? As businesses evolve, it can be difficult, but you can accomplish it with a simple exercise.

Exercise: Get out a pen and a sheet of paper. Imagine you’re starting the business again today — one that is designed to succeed in today’s market. Draw up an organisational chart of what the business would look like, with the key positions in it. Now step back and have a look at it. How different is it from the company you have now?

If you were to fill in names for those positions on the chart, who are the key players — the essential people you couldn’t do without? How do they compare to your key players today?

As businesses re-engineer their offering, the key players may change. Are your team on board with the changes? How do they feel about it? Can you rely on them to deliver under a new structure?

Motivating and leading the team

People need leadership now more than ever. As a leader, people will look to you for direction, motivation and inspiration. If you’re implementing changes in the business, you need the buy-in of your staff members, and particularly your key players for the changes to succeed.

Many change management programmes have failed because they didn’t get the key players on board — those who prefer things the way they were — and the longer they have been in the business, the more likely they are to prefer it the old way.

You need to sit down with them and discuss the changes, the reasons why changes have to be made and what you’re trying to achieve and then get their buy in. Failure to do this properly could lead to people sabotaging the project or stiff resistance at the very least.

Setting up and managing the perfect team

If you’re planning on setting up a new team, or re-engineering the business and the people within it, you have a great chance to take a fresh look at the business and set up the perfect teams within it. So what does a perfect team look like?

Right now you need people who are proactive, who will do things without you having to prompt them or stand over them to make sure it happens. You need people who are determined to make things happen and see things through. You need people that are on your side, who you can rely on to perform, no matter what.

Motivating your sales team

Nowhere is this more important than your sales team. Your sales team are always an important part of your business, but now they’re more important than ever. They have a direct influence on your profits and the potential survival of your business.

So right now, who are the members of your sales team that are regularly demonstrating the right traits? They’re going to be facing more objections from clients than ever before — things like "we’ve got no budget", "things are on hold for the moment" and "we need to get a few more quotes" — and these are from clients that would have ordered without a quibble before.

They’re going to be facing more objections from new business prospects. There are going to be more competitors; more projects are going to be cancelled; and more companies are going to be closing their doors. How are your sales team placed to cope? And how are you supporting them now?

You need to work on your sales team and their attitude, skills and abilities — to ensure their sales skills stay sharp and to make sure they have tenacity, determination, resilience, self-motivation, confidence and all the successful traits associated with top sales people.

Andy Preston is an expert contributor to Marketing Donut and a leading expert on sales. His website is at www.andypreston.com.

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