Why market in a tight economy?
This article was written by Ed Hatton for Entrepreneur Magazine (South African edition), as the My Mentor column published in September 2016 and is posted here by their kind permission
Times are tough, sales are down, is marketing the best way to spend scarce cash?
The economy is limping along and lower sales means having to save costs. The marketing budget is a tempting target for cuts. Developing the company and product brands is a long term investment, and it is difficult to show returns on expenditure. Even lead generating marketing has a time lag between spending marketing funds and bringing in cash from sales. Cost cutting is usually driven by accountants who may have little understanding of customer needs or branding.
Should you cut marketing expenditure? Only as a last resort to ensure survival and then for a defined time, otherwise emphatically no. There are better ways to cut costs. See the July 2016 My Mentor column in Entrepreneur “Cutting Costs”
There is plenty of evidence to suggest that cutting marketing spend in a recession is a seriously bad idea. A Wall Street Journal study of the last recession showed that companies which cut back on marketing lost sales and market share, while those that held their marketing increased profits compared to those which reduced marketing. Repeated studies going as far back as the Great Depression have shown the same results. Savings you make from reduced marketing may be more than wiped out by lower sales. You need every sale and every customer you can get in these times. Some studies have shown that it even pays to increase marketing in bad times. Recessions can be a great time to go on the offensive, to grab customers and market share from competitors. Continue reading
Channel choices
This article was written by Ed Hatton for Entrepreneur Magazine (South African edition), as the My Mentor column published in June 2016 and is posted here by their kind permission
Which channel will achieve the best returns for your business?
You face many choices of how best to get your products and services sold. The most common channels include a field or counter direct sales force, various models of reseller from freelance agents to sub distributors with their own resellers. E-Commerce is becoming a significant channel and self-service in stores has been around for years. Inbound and outbound telesales offers very wide reach; exhibition and catalogue sales work in many sectors like spare parts and curios. Then there are many mixed models; telemarketing followed up by salespeople is one example. For some the best or only channel may be defined by the product. High end cars need a network of showrooms and salespeople so branches or resellers are required, but music is distributed primarily over the internet. For most entrepreneurs making the right choice is difficult and may come with some risk; many companies stay with traditional methods even if that is not the best model for them.
Generally there is a trade-off between cost and control so if you want tight control be prepared to pay for it. Continue reading
How important is your brand?
This article was written by Ed Hatton for Entrepreneur Magazine (South African edition), as the My Mentor column published in May 2016 and is posted here by their kind permission
What does brand really mean to SMEs?
Brands and branding have become the focus of much marketing attention and some hype. Hands up all who recognise all or most of these brands: PrivateProperty™; Sorbet™; Rocking the Daisies™; Turrito Networks™; GetSmarter™; The Creative Counsel™; MiX Telematics™ and Paycorp™? These are all highly successful fast growing businesses which have featured as success stories in Entrepreneur in the past twelve months. Their chosen markets must have valued their brand for them to have achieved such remarkable successes, and yet they are far from household names. So just how important is your brand to your entrepreneurial business? Who should be familiar with it? What values should it portray?
Back to basics
A brand derives from the brand mark burned on livestock to mark ownership. Technically it is a trademark for a company or product, but in the modern sense it is the value which consumers place on the advantages or qualities of the person, company or product. There are many definitions of brand and branding and this adds to the confusion about what to do about branding your business and products. This is a good one: “Brand is the image people have of your company or product. It’s who people think you are.” Anne Handley with CC Chapman. Continue reading
Good mentors worth their weight in gold
This article was published in a Business Partners newsletter of 24 November 2015, and appears here as a guest post by Christo Botes, then Executive Director of Business Partners Ltd. Business Partners Ltd is an African risk based Finance house and Venture capitalist focused on SME’s. The company has a mentors arm staffed by experienced specialists, and co-manages the South African SME toolkit.
There is no shortage of business advice in the world. It comes in the form of consultants, coaches, advisors, professors, management gurus and self-help celebrities. Each has its place, but for Christo Botes, executive director of Business Partners Limited (BUSINESS/PARTNERS), there is a special breed of business adviser who are worth their weight in gold: the business mentor.
For Botes, the distinction between a business mentor and other forms of business advisers is subtle, because a mentor can play any number of roles, sometimes that of strategic adviser, technical expert or business consultant, and sometimes all of them at once. But the key characteristics of a mentor has to do with their experience, attitude and approach. They practice the science and the art of business, not merely the science, says Botes.
An ordinary business consultant usually has a clinical approach, coming into a business to solve a specific problem and impart formal, defined pieces of knowledge or procedural know-how. A mentor can do this, but also strives to impart wisdom based not on textbook learning but on his or her experience.
The ordinary consultant keeps within his scope of work, and his interest stretches as far as the settlement of his invoice. A mentor can also work with a defined plan and for a fee, but gains his satisfaction from seeing his client succeed as a result of his work. Even if he is brought in to implement a technical process in a business, he does so with passion, and with a broader view to empowering the entrepreneur and the business.
A consultant can be a fresh-faced graduate with an MBA. A mentor can also have an MBA, but can only be someone with experience, or “scars and medals” earned in the real business world, says Botes. Continue reading
Are you driving your business or is it driving you?
This article was written by Ed Hatton for Entrepreneur Magazine (South African edition), as the My Mentor column published in February 2016 and is posted here by their kind permission
Why so many strategies fail to deliver and what can be done about it
It is almost a caricature. The executives go away on a strategy planning weekend. They have a successful think tank and come back fired up with great strategies and enormous enthusiasm. Then the day-to-day tasks demand attention and three months later nothing has changed. The idea may still be discussed in management meetings but this is becoming embarrassing. Why did it all go wrong?
It is a lot easier to think about how to grasp opportunities and solve problems than it is to implement the plans. A central problem of implementing new strategy is that it usually relies on people who already have busy jobs with little time or energy to execute additional demanding tasks. The planning session seldom takes this factor into account so strategy implementation remains project-based and dependant on spare time availability within the busy management team. Nothing changes and the company drifts on as it always has.
Entrepreneur style
The style of many entrepreneurs may also be the root cause behind failure to implement strategy. The phrase ‘working in your business instead of on your business’ is almost universal. Entrepreneurs naturally fix problems, manage people on a daily basis, sell, manage the finances, pacify irate customers and liaise with suppliers because they have always done so, and are now very good at these tasks. They work long hours doing things that others would be less effective at doing. Working in the business becomes a comfort zone, and the area they gravitate to when the business faces problems. Continue reading
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