Many of us remember those famous words from the movie “Jaws”, but, what does it have to do with business?

Recently we were in conversations with a potential client.  The discussion was centered in a marketing promotion effort to increase customer awareness and exposure.

After the meeting was over we made a rapid assessment of their company, service offering, value proposition, business image, and benchmarked their key competitors.  Our findings were staggering:

• Four companies offered comparable services in the area.  One visible leader, and three following from a distant behind at a similar level.
• Two competitors had facilities in prime locations, high traffic, high visibility.  Our prospective client was a few miles away from downtown in a less transited area.  We attempted to find their offices but we were unable to find them easily, no signs or ads leading to their facilities.
• Key competitors’ websites were vivid, colorful, modern and mobile-friendly; descriptions were clear and easy to understand.  Our prospective client’s website was outdated, lacked e-commerce capabilities, and was not mobile friendly.

We immediately realized that this client needed more than advertising.  Our rapid assessment showed areas that required immediate attention in order to drive client interest and conversion.  Investing in promotional marketing alone would very likely result in little or no economic impact.  This was the moment when we thought “You are going to need a bigger boat…”

The day after our initial meeting we discussed our findings with the prospective client, and after some consideration they decided to evaluate and expanded scope to their anticipated marketing plan.  These included business image and branding, services positioning and segmentation, pricing strategy, and client retention strategy.  We also identified opportunities in their physical address location and accessibility.

Our proposal was more elaborate than the client had originally envisioned; however, they understood the principles and by reviewing actual data they felt comfortable pursuing our recommended path.

Is your company currently considering investing in advertising and marketing? before taking this action explore the key elements of your business delivery model.  What is your business readiness to leverage the results of your campaign?  Is your product/service positioning clear to your customers and adequately differentiated from your competitors? Is your website ready to handle the increased traffic? Is your team ready and adequately prepared to address client requests or inquiries?

If you would like assistance answering these and other questions please contact us.

For some time we had been struggling with one of our business partners.  In general the relationship had been healthy; however, there had been some performance gaps… nothing urgent or a high priority… until one of their competitors called….

TOM, or Top of Mind, is one of the priorities and goals of marketing professionals.

But what is TOM? Simply described it is the brand that your clients will remember when they think about a product or service.  For example; think of social network and you will most likely think of Facebook; think of coffee shop and you may think Starbucks; or think about search engine and you may think Google… the first brands that come to your mind are in your TOM.

Why is this important? Because when clients make a purchase decision you want them to think of your product first.  Are you considering buying an action sports video camera? Any name comes to your mind? Perhaps…GoPro, and your first reaction will be to search GoPro.  Then other mechanisms jump in to facilitate the ultimate goal, the sale.

The challenge is how to reach that state and be on your client’s TOM.  Several strategies include:

1. Advertisement.  Traditional channels, printed mail, radio, TV, internet ads, social media.

2. Written communications.  Newsletters, press releases, articles, blogs, direct email or mail.

3. Promotions and campaigns.  Discount coupons, bundled offers, free shipping.

4. Direct calls.  Good old fashioned “touch-base” phone call.

5. Person-to-person contact.  What is better than a letter, email, or phone call? Visit in person, discuss opportunities, goals, and any outstanding projects.

Social media has greatly improved the ability to stay on top of your client’s mind; new channels such as Facebook, Instagram, Pinterest, YouTube, and Twitter make it easier and more cost-effective to reach your clients.  The competition is tough though, too much and you may receive that dreaded “unsubscribe” click, too little and you might miss your objectives.

Back to our situation, the competitor clearly knew that they were not in our top of mind and periodically called to check how things were going.  Their efforts may pay off, we are now at least considering potential opportunities with them.  If we are unable to improve performance of our existing supplier that timely phone call may open a door…

As you prepare to close 2015 and consolidate your 2016 operating plan consider what actions you can take to improve your TOM metrics.   Also, take the opportunity to assess  your relationship with your existing clients, making sure that it is bulletproof and airtight.

After all, you don’t want a competitor’s call to open doors that you might not be able to close…

1. Check work orders and delivery forecast

Depending on GAAP rules for revenue recognition applicable to your business products must be delivered in order to be recognized as revenue.  A tuned up value chain, starting from your suppliers to your manufacturing operations and distribution will be fundamental to achieve this goal.  Make an in-depth review of your current work orders and delivery forecast and validate that there are no anticipated bottlenecks, then, evaluate options to accelerate production and delivery.

2. Make an exhaustive dive in Billings

Once items are delivered a simple step before recognizing revenue is to issue invoices.  In organizations with mature, automated systems this is straightforward.  If this is your case, please move to the next item.  If on the contrary your processes are not automated then add extra eyes to your billing process, make sure that all delivered items are promptly billed, and there is no back-up issuing or delivering bills.

3. Evaluate opportunities in Discretionary Spending

Discretionary spending includes items such as travel and entertainment, advertising and marketing, information systems, temporary labor, energy, and more.  With two full months before the end of the year this is the best time to tighten on expenses if your plan is at risk.  Savings in these and other categories can range between 5 and 50%, which depending on your industry may expand your margins by up to 1%.

4. Challenge your Sales team

While your sales team must have been working hard during the year, is there still opportunity to close the year with additional sales? are you fully leveraging all your sales incentives? are there still any undecided clients who may say “yes” with the right incentive? Find out sooner than later and take action!

5. Reach out to your suppliers

While it may be late to implement any cost-reduction engineering changes it is never too late to request straight price reduction.  Evaluate your supply chain for suppliers who have not delivered productivity this year and have your supply chain team contact them immediately.  Focus on suppliers whose costs have evidently come down this year, i.e.  products that are dependent on oil prices and commodities (metals, plastics, and others).  Set a goal, and just ask.

This list is not exhaustive and may not apply to all businesses and industries.  For additional recommendations or to request a rapid assessment please contact us.

Amid all this uncertainty, what can you do as a manager to prepare for a potential slowdown?

As mentioned in prior deliveries, anticipate!  On your financial equation there are two elements, one you can’t control: revenues, but there is another element that you can control: costs.

Cost are represented by several components: cost of goods or services sold, direct labor, sales, general and administrative (SG&A) costs, and other discretionary expenses.  Assuming that you are not planning to reduce headcount your focus will likely start on all other items.

A strong culture of continuous improvement and innovation will help you improve your production costs, reduce manufacturing floor-plan, increase up-time, shorten set-up times, minimize use of consumables, and achieve other factory-related productivity gains.

Next in your list will be your cost of goods sold.  Your commodity team will be instrumental in adjusting your COGS position.  In some cases, a candid conversation with your key suppliers will help you improve your cost base; in other situations, dual-sourcing and Request for Proposal events will be key levers that will help you achieve your goals.

Last to evaluate will be SG&A expenses (excluding labor).  In many industries this category will represent a significant opportunity and first in the list to reduce costs.  Categories such as travel, sales expenses, marketing expenses, consulting and other outside services, among other can be managed more quickly than any other spending buckets.

Where to start?

The answer is, it depends.  Rapid results are usually achieved in SG&A and other discretionary expenses.  Manufacturing and Production productivity initiatives may take longer to execute.  Naturally its always best to start with the biggest opportunity, which may vary by industry and by company.

For recommendations on how to start a cost reduction program you can review our summary presentation “Reduce expenses, five steps to implement a discretionary spending reduction program”  located in our Education Center.  You can also visit an abridged version in Slideshare.net.  For additional details please contact us at your convenience.