Dilbert’s perception of marketing would imply that it’s an industry made of guesswork – throwing darts to see what sticks.
That would explain why many business leaders see marketing as a source of stress and frustration. As with most things in life, we want clear, undisputed answers – a surefire way to hit the bulls-eye every time. What works? What doesn’t? Which marketing tactics produce tangible results, and which are a waste of money? Answering these questions is a tall order, which is why many marketing initiatives don’t work.
The unfortunate reality is this: let’s say you’re able to iron out your company’s unique situation – taking into account your industry, company size, growth stage, competition, and ROI goals – and answer each of these questions with absolute certainty. You know, with unequivocal conviction, that XYZ is the solution to your marketing woes.
You’ll gather the resources, rally your team, and move full steam ahead on a congruent marketing strategy…
…And in all likelihood, a year from now those tactics will be deemed completely ineffective.
There’s a difference between throwing darts to a stationary target, and throwing them at a target on a moving train. The fact is, marketing is dynamic, complex, and in a perpetual state of flux. What produces tremendous ROI one year may very well fall flat the next, and a tactic that initially seemed to have no business relevance may become a primary revenue stream just a few months later.
Sadly, in the small business space, owners often don’t get the memo until it’s much too late – which is why many still think of Facebook as ‘the next big thing’.
To demonstrate this phenomenon, take a look at how B2B companies choose to distribute their marketing spend from year to year. Consider the data below from the Marketing Sherpa B2B Benchmark Report, which outlines the difference in marketing budget allocation for B2B companies from 2010 – 2011:
Take SEO, for example. In 2010, Search Engine Optimization (SEO) seemed like a sound marketing investment for B2B companies – ranking a respectable # 4 in investment percentage. It would be safe to assume, in 2010, that SEO was an effective and desirable marketing tactic.
One short year later, however, interest in SEO dropped. Search Engine Optimization claimed only 9% of budget allocation – less than half of its front-running competitors – and dollars were otherwise deployed toward paid search, tradeshows, and print advertising.
As you might expect, when asked about their perceived effectiveness of each of these tactics in the same survey, B2B companies reported SEO as being 7% less of an effective tactic in 2011 than in 2010.
Business leaders had similar sentiments toward virtual events and webinars: In 2010, a whopping 43% of B2B companies reported virtual events and webinars to be a “very effective” marketing tactic …whereas the very next year, less than half (19%) of those same companies reported feeling the same.
In other words, what produced results 12 months before was now being tossed aside as irrelevant.
The lesson? Trends in marketing – as in life – are perpetually evolving. New technologies are sprouting up daily, and marketing tactics are only as relevant as the customers who flock to them.
Unfortunately, when tackling marketing, many companies are still operating under the assumption that – like accounting, HR, and many other business functions – marketing must be a static entity. This leads to misguided marketing approaches, including:
In-house marketers are often the unsung heroes of an organization – wearing too many hats, stretched too thin, and typically relegated to administrative tasks and sales support. There are many reasons for the ineffectiveness of hiring a person to fill your marketing need – namely, it severely inhibits the company’s ability to think at a higher strategic level.
Because of this ‘task-master’ function, the in-house marketer rarely has the time (or ability) to pick their head up to see how the marketing landscape is changing. With no immediately discernable reason to adjust tactics, he/she will default to what they know or what they’ve done before – letting effective strategies grow stale, and often perpetuating bad habits.
Another common approach is to hire a marketing firm with an area of tactical expertise (in other words, “one trick ponies.” Examples include:
Companies like this are great for larger corporations – with a sophisticated marketing infrastructure, and the ability to hone in on a singular tactical need. Tactical agencies are also a reasonable solution for startups; with limited capital, these businesses can only afford taking on small projects one at a time. For growing businesses, however, the tactical approach is less than ideal. Small businesses often have a variety of diverse marketing needs, and a specialized firm will only solve one symptom of an often larger marketing problem.
Rather than utilizing a firm specializing in a tactic, look for marketing expertise in your industry. For example, if you’re in retail, hire a marketing firm with a track record of working with retailers; if you are a B2B service provider, look for a company with deep expertise in this arena. Whatever your specific offering, partner with a firm who knows how to market a company exactly like yours. This kind of deliberate focus provides a much more relevant expertise than specialized marketing tactics.
The fact is, if you’re a small to medium-sized business (or SMB), you’re part of a massive market. At last count, small businesses represent 46% of gross domestic product – making them a very attractive target for certain kinds of marketing service companies. However, it’s tough to turn SMBs into profit unless there’s a high number of transactions (think Wal-Mart here: it’s success is driven by high numbers, thin margins, and low quality). Most offerings for SMBs, sadly, are structured around the “one size fits none” ideology.
Take heed, there are actually dangers of partnering with these types of predatory businesses. And not metaphorical “dangers” like ugly design – actual monsters under the bed, and less-than-ethical business practices.
Unfortunately, business owners are often taken advantage of by companies like this, seduced by “guarantees” of immediate results. But if something sounds too good to be true, it usually is. Here are just a few examples of unhappy customers who learned this lesson the hard way:
These ineffective marketing models don’t just waste your company’s time and money – they can actually affect your brand integrity. What’s worse, your business will see underwhelming marketing results in a gradual, non-dramatic way – a slow, steady decline easily blamed on other factors.
With the landscape constantly changing, and both internal and external options bringing obvious drawbacks, how can companies make sure they’re staying ahead of the marketing curve?
The answer is simple (but far from easy): The only way to hit a moving target is to travel at the same pace. Good marketers must have their finger on the pulse each and every day.
So the next time you’re wondering why your marketing isn’t up to speed, ask yourself – am I on the train? Or am I standing on the tracks watching it go by?
Want to learn more about how Kinesis is transforming the marketing paradigm? Visit our website or give us a call at 503.922.2289
One common misconception is that sales are made at the trade show. While this can be true, most attendees want to shop around before making their purchase decision. Therefore, the relationship you build with them during and after the convention is critical.
Here are the top 7 ways to transform interested attendees into leads, and ensure the best possible return on your investment:
I’m far from a sports buff, but even I know that a coach wouldn’t put his team on the field without a play in mind. The same goes for trade shows; without a set goal and a plan on how to achieve it, you’re hurting your chances of success. Determine how many leads you would like to get, and write a list of qualifying questions for your booth visitors to find out their interest level in your products or services. The secret to a successful trade show or exhibition is to know, in advance, exactly what you want to achieve – and then craft detailed plans to help you deliver.
Despite popular belief, all trade shows are not created equal. Instead of signing up for every trade show within 50 miles of your area, search for events that you can expect your target demographic and competitors to attend. You’ll get more potential customers from one or two targeted shows than you would from dozens of conventions that have little to nothing to do with your industry.
If your employees wear uniforms, make sure they are clean, pressed, and hole-free. If uniforms are not part of your everyday work attire, dress appropriately (business casual or suits), depending on the type of trade show. Keep in mind that exhibitors are on their feet for hours at a time, so comfortable shoes are also important. Your first impression is going to last with attendees, so make it a good one.
In addition to your team’s attire, the appearance of your booth can mean the difference between a qualified lead stopping to say hello or walking past without a second glance. Give some thought to how you would like to present your brand, product, and services at the show. Your signage, design, and words are a good place to start – make it abundantly obvious what your business does and who you serve at a glance.
Instead of collecting tons of business cards that could easily get misplaced or relying on attendee handwriting, use a digital form on a smart phone or tablet to easily and clearly record all of the contact information you will need to get in touch with them after the show.
Freebies are great for attracting attention, so long as they’re aligned with your lead generation strategy. Help interested attendees remember your company with a free item related to your industry, with your company’s information on it. Dentists, for example, might hand out floss or tooth brushes. It doesn’t have to be expensive, but should effectively communicate your brand and offering.
The final and most important step is to follow up after the show. Give your leads a week or two to soak up all of the information given to them at your booth, and then reach out to say hello, remind them who you are, and let them know how great it was to meet them. Don’t wait more than a couple of weeks, or your potential buyer may have time to forget about all the helpful information they were given.
Trade shows can be expensive. However, with the right preparation and strategy, you can use them to increase brand awareness, generate leads, and maximize your ROI. These tips should help you get the best results at your upcoming event – making them well worth the investment.
About the author: Kristin Hovde is the Marketing Manager for Smash Hit Displays, an online trade show display company. She is also a regular blogger for Smash Hit Displays and a number of other trade show and marketing websites.
A CEO was asked how many people work in his company: ‘About half of them,’ he responded.
Ivey Business Journal
This is a joke, of course, but it has an important undertone. Many business leaders struggle with creating an engaging work environment and motivating employees.
The most recent Gallup survey results indicate that 30 million people in the US – approximately 30% of the American workforce – reported being engaged or inspired at work. Of the remaining 70%, 20 million employees were actively disengaged – that is, they hate their bosses, are miserable, and (to quote the survey) “roam the halls spreading discontent.”
To put it bluntly, you cannot afford for your employees to not be profoundly connected with your company. Employee engagement has huge implications for productivity, quality, customer service, and overall profitability. Not to mention, Gallup indicates that more engaged employees have 50% fewer accidents and incur far less in healthcare costs.
It’s no secret that engaging your team is crucial to your company’s business performance. But how do you go about inspiring and motivating your employees?
When it comes to engaging your team, your core values are the first place you should start. As Roy Disney once said, “It’s not hard to make decisions when you know what your values are.” Your company values are more than just faded writing on the wall or tucked into a binder somewhere – they are the pillars of your company, and the foundation upon which strategy, goals and direction rest. These founding principles are the driving force behind everything that you do as an employee and organization. Writing powerful values is essential to creating employee engagement.
If an employee is engaged with your company values, he/she will clearly understand what’s important and have confidence in their ability to make decisions on a daily basis. An engaged employee offers discretionary effort freely and works daily for the good of the company, in clear line with its values. They are dedicated not only to their own success within a role, but to the success of the company. They care about the future of the company and are emotionally connected to achieving its goals.
Engaged organizations have strong and authentic values, with clear evidence of trust and fairness based on mutual respect, where two way promises and commitments – between employers and staff – are understood, and are fulfilled.
Having strong company values is only half the battle. According to the Human Capital League, only 42% of employees know their organization’s vision, mission and values. How can you expect your employees to engage with your values, if they don’t know what those values are?
Take any steps necessary to communicate and demonstrate the core values of your company. Continuously reinforce the guiding mission to keep your employees on track.
Not only is employee engagement crucial for staff retention, productivity and individual performance, but it has a real impact on your bottom line. It is worth the time and effort to bring the goals and values of your employees in line with those of the company.
About the author: Ashley Freeman is Head of Sales and Marketing at employee engagement company INVOLVE. He spearheads employee engagement campaigns for some of the world’s leading businesses.
Results are in – and we’ve done it again! Kinesis is thrilled to announce that we’ve been recognized as one of Portland Business Journal’s fastest growing private companies of 2013!
Winning this award is no small feat, and co-founders Shawn Busse and Wendy Maynard led Kinesis to achieve it with flying colors – not once, not twice, but three years in a row.
So in light of this recent achievement, I sat down with CEO Shawn Busse, to find out just exactly how we pulled it off.
Hi Shawn, thanks for taking the opportunity to sit down with me! I know your time is valuable, so why don’t we just get to the million dollar question: I think everybody wants to know, what’s Kinesis’ secret to success? What’s the secret sauce? What are the magic words?
In 10 words or less? Hire great people and work with great clients. Honestly, I believe that’s the true cornerstone of a successful business. Take care of hiring, and focus on working with clients that appreciate you (and for whom you can bring a lot of value). If you can accomplish that, most of your problems evaporate – and it becomes all about shared success.
The longer answer, though, is that we also own the principles we teach to our clients. That authenticity has been instrumental in our process. When we discuss the importance of creating a great culture, we aren’t just reading it out of a book – we can show what a substantial impact a great culture can make within our own office. We market to our internal customer, set goals, review KPIs vigilantly, and reward performance… so that when we preach the significance of these ideals, it’s supported by personal experience and empirical data. If you don’t practice what you preach, why should anyone else?
Kinesis was around for 10 years before making the fastest growing list – but has made it every year since. Was there any turning point or “A ha” moment when things really started to change?
There’s a great book called Blue Ocean Strategy by Renée Mauborgne and W. Chan Kim – which exposes the pitfalls of overcrowded industries and head-to-head competition. In order to succeed in today’s increasingly competitive business world, you must meaningfully differentiate your company – thereby making competition irrelevant.
I absorbed its message right around the time of the recession in late 2009 / early 2010, which in many ways was our pivotal moment. I realized that our existing business model was not highly remarkable – while we created great work, we also had plenty of competitors producing similar work. It forced us to ask some tough questions and completely reinvent our business model.
Concurrently, the recession did us a giant favor in that it exposed how screwed up marketing was for SMBs. Businesses were struggling to survive – struggling for their very existence – and were simultaneously firing, disempowering, or cutting the budgets of their marketing people. This, of course, was completely counterintuitive – and Wendy and I realized that businesses couldn’t connect marketing to their P&L.
The recession showed us marketing was fundamentally broken, which lead to us creating our current business model to solve it. It also gave us the opportunity to examine our business operation and do a complete overhaul – establishing replicable, scalable systems and a subscription-based pricing model. I’m not sure we would’ve seen either of these shifts without the recession.
What is Kinesis’ greatest strength?
Can I have more than one? In order of importance: Tied for first, clients and employees. Without great customers none of this is possible, without great people we couldn’t have great customers.
A close second would be the processes we use. In case you haven’t noticed, I’m a big fan of borrowing good ideas – We have a stack of books in our office that provide a library of methodologies for strategic planning, change management, marketing…you name it. The cumulative knowledge of our entire team adds up to an ample collection of good ideas and practices. Kinesis’ job is to transform these ideas into processes and tools for small and medium-sized businesses.
That, in many ways, is our secret sauce – you can read a book on strategic planning, but that doesn’t make you a great strategic planner. It’s about cumulative knowledge and experience working with small businesses. Having applied those strategies, we’ve learned what works and what doesn’t. SMBs have to be nimble and able to pivot on a dime. You need processes and guiding documents that do that – while still providing accountability, metrics, and repeatability.
What is Kinesis’ greatest opportunity?
Ironically, it’s in marketing ourselves. It’s in getting the word out that there’s an alternative to traditional marketing models – one that performs substantially better, while still being financially competitive.
And what is that competitive advantage?
The ability to connect the dots between marketing and the owner’s overall vision – and then communicating it to both internal and external audiences. That means marketing from the inside out: Developing engaged employees who then interact more effectively with your customers.
That’s a tremendous differentiator from most other marketing firms: Producing new revenues is paramount, but acquiring a customer is 6-7X more expensive than selling more services to your current clients. We help our clients grow these existing customer relationships by creating an internal culture that maximizes employee engagement.
What was the biggest challenge you faced, and how have you overcome it?
When you invent a new model, people have nothing to compare it to… and that sometimes makes it difficult to communicate your offering.
The most successful strategy for tackling this has been to adopt a more conversational approach – I engage potential clients in a longer dialogue about strategic marketing. I determine whether they’re actually interested in making marketing an integral component of the company, or if they’re just looking for a tactical add-on.
Some will opt out – which is okay, because those customers are right for a different kind of business than Kinesis. But when I find the folks who are thinking strategically about a longer-term marketing partnership, that’s when we have meaningful conversations… and most of them become Kinesis clients.
What has been your proudest moment in your career with Kinesis?
Any time a client says to us: “You’ve helped our company grow,” or, “We’re different than we were a year ago.” Or even better: “We had no idea what we were getting when we started working with you.” That’s a huge moment, and however often we hear it – it never gets old.
What would you say is the most common mistake made by small business owners?
I’ve seen a lot of businesses over the years. Each one is different, but they face a set of common challenges. One of the biggest hurdles I see is leaders getting so caught up in running the business that they lose sight of their initial passion and purpose.
Without a strategic planning process and metrics for measuring success, your company will end up somewhere. But is it really where you wanted to go?
Many business owners become so absorbed in the operation, they forget why they started the company to begin with and they don’t have a longer-term plan for performance. As you grow, you have to be deliberate about maintaining that connection – both to your purpose and to your people.
So without getting too deeply into Kinesis’ specific approach, how do you solve the problem of that disconnect between leaders and their workforce?
There’s no silver bullet – we have some great processes that help people work through those challenges, but it doesn’t happen overnight. I will say that one of the great things about Kinesis is our ability to hone in on what the owner is passionate about and what they’re trying to do with their business. We help them set aside everything that has clouded their vision, and get them back to their true purpose. Our process is designed to do just that, and communicate this passion in an effective and authentic way to their employees and customers.
What advice would you give to a business looking for the same growth and success Kinesis has seen in the last three years?
I used to joke that companies who make the fastest growing list, are a lot of the same companies to file bankruptcy three years later. Ironically, fast-paced growth can sometimes lead to the wheels coming off the bus… lapses in quality, high turnover, cash-flow shortages, you name it – there are a lot of dangers to fast growth.
Pacing yourself is just as important as growth speed. While we’ve grown quickly, it’s also been measured and strategic. We aren’t growing so fast that our employees are hurting or quality is suffering, and I’m a big believer in marathons over sprints.
That’s why the companies I admire most aren’t those who make the # 1 spot, it’s those who’ve made the list five years or longer. They know how to create sustainable growth, which is remarkable – and that list is a lot smaller. So if I were to give advice around fast growth, it would be to make sure it’s deliberate and sustainable.
What’s next for Kinesis / What are your goals for the future?
When we were suffering the blows of recession, we did an exercise called the Painted Picture – it’s a narrative description for the future state of Kinesis. The challenge now is that I think we need to repaint that picture. In many ways we’ve reached our objectives sooner than I thought we would, and the talent we’ve brought onboard is ambitious enough to take on a higher level of challenges. So, the next step for Kinesis is reframing that company vision.
Any other closing thoughts?
I would say that Wendy and I owe a debt to a lot of people; success isn’t about us. I talk about our customers and employees, of course, but there’s also a whole group of people who have helped me along the way. In many cases it’s one person who said something, shared an experience, or gave me a small piece of offhanded advice – and I thought about it, implemented it, and saw massive change in my company as a result. Many of those people probably don’t even have any idea of the effect they’ve had.
I think if I were to identify a common theme, it would be to surround yourself with people who are similar to you in approach. For me, that’s people who have a win-win mentality and a desire to live with purpose. Surround yourself with those people, and if you give to them, they’ll give back to you. That’s a pretty important idea. If you can engage in selfless giving, there’s no elevation you can’t reach.
Interested in learning more about how Kinesis is transforming the marketing paradigm for small businesses? Visit our website or give us a call at 503.922.2289]]>
Allie started with Kinesis as an intern in June 2012, aligning this promotion with her two-year anniversary. It wasn’t long before she transitioned from an internship to a full-time junior designer position, where she created phenomenal design work for our clients’ diverse visual needs.
Before joining the Kinesis family, Allie studied graphic design at Cal Poly in San Luis Obispo, following her lifetime passion for art. She produced design work for the Campus Dining program, and even spearheaded the visual efforts and layout design for Cal Poly’s Byzantium, an annual literary journal. Needless to say, design was in Allie’s blood right from the start.
Last year, Allie began to shift from training and shadowing, to taking ownership of design projects and leading creative strategy. In short, she was given the opportunity to spread her wings – and we (and our clients) were floored with the results.
“I’m really fortunate to be able to be creative every day,” Allie reflects, “And seeing your work make a difference is so rewarding.” When asked about her ‘WHY,’ she responded, “Helping transform our clients with the work we do. It’s a powerful thing to watch and experience.” (Allie must be a Kinesian through and through, since Kinesis’ core mission is transformation)
Allie explains that this career milestone represents a lot of learning. “The biggest thing I had to learn was how to be as efficient as possible with my work.” As with any position, it took time and practice to perfect her craft. But the more design work she did – the more quickly she could create a final product. “I learned to take the time to put pencil to paper instead of going straight to the computer. It seems counterintuitive at first, since everything has such a tight turnaround time, but creating a sketch and laying out your ideas is so beneficial, and ultimately more efficient. It was hard to stop and make myself do it.”
When asked if she had any advice to give the budding designers of the world, Allie had this to say:
“Work for a small company. I used to think I wanted to work for a bigger company – and now I’m not sure why. I’ve spoken with designers at larger companies, and their project scope is so limited. Smaller organizations bring their own struggles and challenges, but I love having the opportunity to collaborate with our entire team (designers, copywriters, and strategists) and to be a part of a project from start to finish.
Also, get involved in your local design community. I’ve been a member of AIGA for years, both in Cal Poly and here in Portland. It helped me participate in portfolio reviews, meet local designers, and conduct informational interviews with as many people as I could – which I think was really helpful.”
This promotion is no doubt just one stepping stone in what is sure to be a long and successful career. We are so thrilled to have Allie on Team Kinesis, contributing her extraordinary talents to our clients’ marketing efforts.
Allie’s closing thoughts? “Kinesis, specifically, has been the reason for my growth. Michelle has been my mentor, and everyone else has been so supportive. I’m just so grateful to have had this opportunity to grow, especially at Kinesis… well, because Kinesis is just so awesome.”
Interested in joining the Kinesis family? Check out our Career Center for open positions, or visit our website to learn more about who we are.]]>
Marcella hit the ground running when she joined Kinesis, and has had an extraordinary impact on our company. In her role as Senior Strategist, she works with business leaders to develop actionable marketing and business strategies.
When asked what makes her tick, Marcella responded, “I love the complex and ever changing world of business, and the true impact authentic and consistent leadership makes. We live in high pressure times – when almost anything, including the best products & services, can be replicated. The only way to truly stay differentiated is by building a phenomenal culture full of engaged people, who deliver on a clear and remarkable brand promise. I love helping business leaders discover the power of this convergence as they work hard to create not just a business, but a legacy.”
And her efforts haven’t gone unnoticed – one of Marcella’s clients recently had this to say: “We’re huge fans of Marcella. I commend her on the heart and soul she puts into our engagement… it means a lot to us, to have someone in our camp and watching our backs.”
Marcella’s influence extends beyond the walls of her professional life – She has also been a volunteer for Albertina Kerr’s Restaurant & Shops Marketing & PR Committee since 2012. Recognized as one of Oregon’s top ten nonprofits, Albertina Kerr partners with families and the community to support people with developmental disabilities and mental challenges to realize their full potential. Marcella lead all rebranding efforts for the new “Albertina’s Place,” and even received the 2013 Silver Circle award as recognition for her contribution.
Marcella was also a long-time volunteer at our local AMA chapter, sitting on the board for both Community Outreach and MAX Awards committees. In fact, she was selected as an incoming AMA President for 2012, but had to forego the role to become a mom!
Prior to joining the Kinesis family, Marcella directed marketing strategy at Perkins & Co, Portland’s largest locally owned accounting firm. She worked closely with the executive team and assisted with the firm’s overall business strategy – which ignited her passion for helping businesses thrive. Before that, she spearheaded the marketing efforts at Storables, after spending almost two years as a VP at Washington Mutual Bank – where she served on the both the marketing and employee engagement teams. In short, Marcella has been championing internal culture and remarkable marketing for her entire career.
When not in the office, you can find her at home with her husband and adorable daughter, or hitting the pavement training for her next marathon.
We are so thrilled to be able to share in the celebration for Marcella, please join us in extending our congratulations!
You can follow Marcella on Twitter @MarcellaVail or connect with her on LinkedIn.]]>
If you find yourself on that train of thought, let us stop you right there. The US Small Business Administration probably says it best: “Your marketing budget should never be based on what’s left over after all your other business expenses.” In other words, if you view marketing as an “afterthought expense” on the P&L, you’re tying your company’s shoelaces together.
The late great Peter Drucker – who is credited with the philosophical and practical foundations of the modern business corporation – held this deep-seated belief:
“The business enterprise has two — and only two — basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.”
To put this another way: Functions such as administration, finance, accounting, HR, IT, and operations are all costs necessary to run the business. While many of these arenas deliver savings, performance improvements, and profit maximization, marketing’s function is to drive new revenue.
With that in mind, setting the budget for any marketing effort should be based on the potential return of that effort.
Sometimes the potential return can be tricky to quantify, however, and in that case the most straightforward approach to calculating a marketing budget is to use the Marketing Budget Ratio (MBR). This is determined by dividing your marketing investment by total revenue, and is expressed as a percentage of your total gross sales. A target MBR can range anywhere from 2-20% depending on your industry, business lifecycle, and competitive pressures.
What do we recommend at Kinesis? The short answer: 5-11%. But the truth is, it depends on a number of factors.
First and foremost, your marketing budget should be predominantly informed by your product offering. For example, most of our clients work in the professional services arena. This can be broken down further, however, into business technology, business services, and industrial/manufacturing:
As you can see, business services lead the charge in marketing spend at 11%, while industrial and manufacturing are a little behind the curve compared to their peers. This could be partly due to a high cost of goods sold in the manufacturing industry – and when you back out the costs of materials, raw goods, etc., gross profit becomes a more relevant figure from which to draw the MBR.
But even within those specific classifications, there is further differentiation from company to company, with other factors that greatly influence investment. Such as…
Another important consideration when determining your marketing budget is the size of your company. Marketing Sherpa cites the following averages by organization size:
It may come as a surprise that as a company grows in size, their MBR decreases. There are two different factors at play here:
Obviously startup companies with huge growth goals have a lot more marketing to do than a more established brand would. For those initial brand building years, the US Small Business Administration estimates that many businesses’ MBR is upwards of 20%.
Even aside from the early years of branding, however, any company with aggressive growth plans should see marketing as a very high priority.
It’s also a good idea to look at industry trends – how your competitors are sizing up and deploying their marketing dollars. How competitive is your company in your market, and what share of brand awareness do you have? With marketing becoming a more prevalent dialogue in every industry, it is safe to assume that your competition is having this conversation internally as well.
Moreover, almost 60% of companies reported plans to increase their marketing budgets this year. So even if your competitors are not yet devoting much thought or budget dollars to marketing yet, chances are that this will change – and soon.
So before sitting down to write a marketing budget, make sure you’re taking all of these key factors into consideration. But more importantly, consider it an investment in revenue generation – thereby aligning your marketing with bottom-line profitability, and propelling your company across the finish line.
Want to learn more about how Kinesis is transforming the marketing paradigm? Visit our website or give us a call at 503.922.2289
The Blazers started the season in good standing, but few expected them to go far. And yet despite the team’s youth and inexperience, the Blazers proved many of the doubters wrong. For a brief moment, they seemed to be so much more than a playoff door mat.
In fact, even if you’re not a basketball fan, you owe it to yourself to watch the clip of the Damian Lillard’s .9 second buzzer-beating, series winning shot:
This shot is incredible for so many reasons that it’s hard to know where to begin. For starters, the basket clinched the win for a team that hasn’t made it past the first round of the playoffs in 14 years. Also, while many players have made clutch shots, never before has a Trail Blazer managed to send his team to round 2 with a buzzer-beater. In fact, advancing to the next round with a last-second shot hasn’t happened even once, by any team, in the last 17 years. Perhaps that’s why even in light of the Blazers’ season coming to a close, the media is still calling Lillard’s effort the greatest shot in Trail Blazers history.
Now, for some confessions: as a kid, I was an awful athlete. I took a few stabs at soccer and baseball but couldn’t manage to overcome my introverted nature and awkward growth spurts. So, I gravitated toward obscure individual sports like racquetball, badminton, and martial arts.
However, as I advanced in my professional career and started to understand how businesses worked, my appreciation for the value of teamwork grew as well. And over time, I did begin to play (and even study) team sports like volleyball and ultimate frisbee. Simultaneously, my nightstand started to become a resting place for books on coaching and business strategy – and my worlds of business and sports began to converge.
I learned an important lesson: What held true in the office was usually transferable to the teams that won on the field. So, inspired by Lillard’s brilliant 3-pointer, here are 6 observations I’ve made from leading teams both on and off the court.
Remember the “Jail Blazers”? In the early 2000s, when the Trail Blazers made the news, it was not for their athleticism but for their criminal activity – fighting in public, drugs, felonies… you name it. While this group had some very real individual talent, the self-serving nature of the “team” ensured that they lost most of their games, and guaranteed the demise of Portland’s basketball hopes for nearly a decade. Which leads to fundamental #2…
The detrimental influence of the “Jail Blazers” malcontent had an echo effect on the team’s revenue for years to come. The graph below illustrates the cost of the “Jail Blazers” in game attendance alone – but that doesn’t even scratch the surface of additional losses in ticket prices, sponsorships, food sales, etc… In short, the franchise lost over $140 million in ticket sales and took nearly 7 years to regain its pre-Jail Blazer success.
The lesson here is that even the relatively brief duration of this “bad apple” team has had astronomical financial consequences. The same can be said for your business – studies put the negative productivity impact of just one Bad Apple at 30-40%, and we’ve written extensively on the other direct costs of a bad employee. The “Jail Blazers” serve as proof that the implications of a bad hire can be severe – as a business leader, don’t make the same mistake.
When watching that legendary game against Houston, take a look at two of the most dominant players from opposing teams – the Blazers’ LaMarcus Aldrige and Houston’s Dwight Howard. Both are incredible athletes and capable of game-changing plays, but Aldridge conveys a sense of optimism and camaraderie that was missing from the Houston bench. If you watch closely, nearly every game highlights the difference between these two teams – Houston is actually a more experienced team with “better” players…but they seldom lift each other up and elevate one another in difficult times.
Business is no different. We all have ups and downs; we win sales, we lose sales. However, if you empower leaders to cultivate a culture of mutual respect, camaraderie, and shared objectives, you are setting your company up for success.
Even though Lillard made one hell of a shot, the real story is how the whole Blazer’s roster created that opportunity for him. In the business world, even the best salesperson will do better if they have the full support of marketing, customer service, and operations.
In the video, you can see Lillard streaking across the court, clapping his hands together. That sense of engagement and urgency is the hallmark of a top-performer, whether in the NBA or working as an entry-level employee. And engagement is meaningful to the bottom line: studies show that highly engaged employees contribute more than 30% more to profits than those who merely “show up.”
At the end of the day, the Blazers have a great coach and a team that can execute. While they ultimately fell to another team, their ability to reach as far as they have is a combination of coaching, practice, and culture. Likewise, most businesses have some mix of great players – but it takes a leader with maniacal focus to ensure their team has the right mix of talent, camaraderie, and discipline to win week in and week out.
As a diehard fan, I would rather be writing this season-wrap up about the Blazers’ epic victory over San Antonio… but, for now, I am content with the knowledge that this young team has the potential to grow into a great team like the Spurs. In the meantime, I’m going to focus my game on exactly the same things the Blazers have done right: great coaching, top-notch recruiting, smart strategy, and a laser-like focus on company culture. That’s how my team, Kinesis, will keep on winning.
The cost is surprising – not only in dollars due to underperformance, but also in the attitudes and morale of your other team members. Your weakest-link employee can quickly turn a positive working environment (and that great culture you’ve worked so hard to build) into one that is divisive and negative.
Let’s take a look at the true cost a bad employee can have on your business.
Coming up with reasons to keep a bad apple isn’t hard – avoiding confrontation, emotional attachment to the person, optimism about their ability and desire to improve… the list goes on.
You’ve devoted time, energy, and training to this individual, and you want to protect that investment. And it becomes especially difficult when you genuinely like the person who is underperforming. In the end we’re all human, and it’s in our nature to want to give second (and third, and fifth, and ninth…) chances.
But every dollar you spend keeping a problem employee on payroll is furthering the severely harmful effects they can have on your business. If the bad apple conducts unprofessional interactions with clients, those relationships will suffer. Additionally, if they bring excessive drama into the mix or if other team members have to pick up the slack from their poor work ethic, you can expect a substantial drop in morale.
While many don’t realize it, the financial impact that a bad apple employee can have on your company is truly staggering. Whether they are “bad” because they are underperforming, pessimistic, or unpleasant – studies show that just one bad apple in an otherwise high-performing group can bring down productivity by as much as 30-40%.
It is tempting to assume that an effective team can overcome the influence of a single bad apple, but test after test has shown that this is simply not true. As the Wall Street Journal puts it, “The negative thoughts, feelings, and performance [bad apples] trigger in others are far larger and longer lasting than the positive responses generated by more constructive colleagues.”
To put this in fiscal terms: Many of our clients work in the professional services arena, where each employee represents roughly $100-$200k in annual top-line revenue. Assuming any bad apple would be sub-grouped with 3 or 4 others, their influence could span roughly $500,000 per year. At only 60% efficiency, this could translate to over $300,000 in annual revenue lost – all a result of just one person.
In addition to the direct costs affecting co-workers’ performance, there are additional “weak performer” soft costs that you must factor into the equation. These include:
Removing bad apples would be a lot easier if all problem employees were nasty, insubordinate, or severely affecting workplace morale. But the truth is, often times the “bad apple” is a genuinely good person, whose longevity with the company makes them feel like a part of the family. Or perhaps they were a good performer for years, but can’t keep up with the changing dynamics of your business. In these cases, letting someone go is a much more painful task for leaders.
The important thing to remember is that keeping a bad apple on staff is not only hurting your company, but hurting that person as well. The majority of bad employees already know that they are not the best person for the job, and coming to work every day with that knowledge is frustrating and stressful. By coming to terms with this realization together, you can help both parties find a better fit.
Addressing this issue isn’t easy – and the best preventative measure you can take is to hire the right fit employees and implement an effective recruitment and training process. But no system is foolproof – and if those measures fail, the next piece of the puzzle is identifying when it’s time to rid yourself of a bad apple.
While a painful endeavor, it’s the best decision for the business, client base, and brand you’ve worked so hard to build.
Want to learn more about how Kinesis can help your business thrive? Visit our website or call us at 503-922-2289.
But how does a B2B business go about getting an ongoing stream of people who are interested in your services and products? And what are the best ways convert them to customers? Unfortunately, it isn’t easy. It necessitates ongoing, multi-faceted marketing efforts to attract qualified leads and a well-defined sales process to close them.
To guide you in your need for new customers, here are 7 marketing tips to help you generate more leads:
You already have a network of people who know your brand and appreciate what you do. Call your current and past customers and ask them about their needs. Tell them about new service and product offerings you have added. Contact past customers on a regular basis to nurture those relationships. In the B2B space, this one effort alone brought one of our clients a new $600,000 contract.
You cannot operate in a bubble. If you sit behind your computer every day and hope that oodles of people will magically find you, you will be very disappointed. Instead, get out of your office and connect! Pressing flesh with your network of people is the shortest path to new work through meeting new people and getting referrals. (If you must stay behind the computer, at least make contact with 3 people via the phone, email, or LinkedIn).
Invite clients to lunch or coffee. Attend networking events. Grow a local business network and get together with these friends over a beer. If you commit to talking with 3 people about your business every day, you’ll be amazed at how much new business it will bring in.
Some of your people are great networkers. These individuals are your frontline – allocate a portion of their time each week to getting out in your community and evangelizing your company. The CEO or even the sales team do NOT have to be the only ones communicating your value. Get your connectors out there to events.
And even if your other employees are not the consummate networkers, they can still be brand ambassadors. After all, they are regularly interacting with people on the phone, at meetings, on their computer, and after they leave your facility. Make sure you train all of your people how to talk about your company so that they spread the word and get others excited about what you do.
Studies show that about 40-50% of all inbound sales leads are never followed up on. That’s shocking, isn’t it? To develop an effective lead follow-up process, it’s essential to follow up and fast. Of the ones who do follow up, many firms are slow to respond.
According to the Harvard Business Review, companies that follow up with potential customers within an hour of receiving an inquiry are nearly 7 times as likely to have meaningful conversations with key decision makers. And meaningful conversations result in conversions.
Conversely, every minute you delay gives your competitors (aka the hungry vultures) ample time to swoop in and get the sale. Because your prospect is doing an active search, she wants to buy. If all you do as a result of reading this article is to implement a fast follow up with inbound leads, you can significantly increase your conversion rates.
Beyond the initial conversation, there’s the ongoing follow-up. You may have great conversations with a person at another company but they aren’t ready to buy – or they have significant hurdles to overcome within their organization in order to pave the way for bringing your company in. Make sure you use a customer relationship management software (or just set reminders in Outlook or your smart phone) to call and email these individuals back.
I’ve already written in-depth articles about referrals here and here so I won’t go too deeply into this here. However, the main point I want to emphasize is to develop a systematized approach of asking for referrals. For most companies, it’s an ad hoc, when-we-remember kind of effort. And if you are asking for referrals in that manner, you aren’t fully digging into your gold mine. Asking for referrals costs next to nothing, and the resulting names you get are typically easy to close and a great fit for your company.
Most of your potential buyers are doing extensive research on your website long before they ever contact you. Almost three quarters (72%) of B2B buyers planning to purchase a business product begin their research online according to recent research by IDG Connect, NetLine, and Salesforce.com’s Pardot. What’s more, after an initial search, 70% of buyers then return online 2-3 times to do additional research, and 12% return online more than three times. Content is extremely important in the B2B buyer’s decision-making journey.
So to help your buyer make their decision, equip them with tools to learn about your company’s differentiation, value, and full gamut of offerings. Provide White Papers, articles, blog posts, guides, webinars, and other content on your website that your sales team can email to prospects to help them make their decision. In a typical B2B cycle, the actual sale takes months to close and you want to be able to have multiple tools to not only nurture the relationship, but to arm your buyer with information to internally “pitch” your services to peers and leaders within their company.
Consistent acquisition of new customers is crucial to the success of any business, and the importance of proactive lead generation efforts cannot be overstated. Don’t let your company fall into the trap of waiting for sales opportunities to land on your desk. Following these tips will help you shift your marketing focus from passive to proactive – and the result will be a steady stream of qualified leads, continued growth for your company, and much fewer sleepless nights.
Interested in learning more about how to help your business succeed? Subscribe to our newsletter for free tips on marketing, leadership, and sales.