For the last decade, I have focused on marketing apartment communities, turning failing properties into successes, and successful properties into market leaders. I have traveled the country, sometimes living in four states in one year, and while each community I am hired to turn around presents unique challenges, the path to prosperity remains the same.
There are five marketing mistakes business make, sometimes by commission and sometimes by omission. By eliminating these mistakes, businesses will not just succeed, they will excel.
Know Your Role
Many companies seek to expand sales by expanding into other businesses, which while they might seem complementary, draw focus away from the core product. Yes, these sidelines add revenue, but often these additional revenues mask declines which will eventually lead to failure.
If you have not read “Good to Great” by Jim Collins, it should be mandatory reading. Focus on the one thing you do best.
WM Wrigley Company did $5 billion in sales last year, selling gum and mints which cost much less than a dollar. It is not the price of what you sell, but how much, and how big a profit margin.
Know Your Competition
Many companies do not actively “shop” their competition. Do you know how much a competitor is selling a similar product for? Do you know what about their supply chain or distribution network allows them to sell for less than your price?
There is no shame in borrowing ideas or strategies from competitors and implementing them in your business.
Walmart was not a new concept. Discount chains like Kresge and McCrory’s and Woolworth’s had been around most of the century. Yet Walmart looked at their competitor’s business models, devised a strategy for buying in bulk and generating profits through sales volume and not through high margins. They wiped out the competition by beating them at their own game.
Know What Is Worth the Money
In my business, luxury apartments, I consider each marketing concept in terms of what it can produce. A campaign that might cost $10,000 can still be a good idea if it raises occupancy by as little as 2%. Yet something that only costs a few hundred dollars each month can be a waste if it generates no future revenue. It is not about cost, it is about return on your marketing dollars.
Automakers are the biggest spenders on television, print, and online advertising. Yet despite spending millions of dollars for a 30-second ad during the Super Bowl, they know that these ads work to generate buzz and to drive traffic to their showrooms.
Know When to Say When
I have worked at many communities where the advertising game plan had not changed once in the five years prior to my arrival. Every marketing effort needs to be tracked, quantified as to the return on investment, and be discussed with the sales representative or account manager responsible for these accounts.
Often, advertisers will provide free upgrades or better ad placement if you complain the ad is not generating results. It is easier for them to give you something additional for free than it is for them to accept losing you as a customer. But you have to know what the results are to have that discussion.
Put simply, would you go on a diet and not have a scale to weigh yourself as a means of tracking success? So why would you spend you marketing dollars that way?
Know Your Customers
Failing to provide good customer service is the death of many businesses. It is easier to keep existing customers than to acquire new, and for many businesses like hotels and restaurants, repeat customers comprise 80% or more of revenue.
If a business does not have a means of tracking customer retention, they will never know why one leaves their business. Paying attention to customer needs, following up when a faithful customer seems to stop patronizing your business, and addressing the issue so it does not happen again, are cornerstones of success many failed business never practiced.
By following these five “Knows” you will avoid making mistakes in your marketing plan and will keep your business on an upward path to success.