Sunday, January 30, 2011

2 questions on modern marketing

Based on my recent columns on marketing in the National Post, I received a brief email asking me two questions:

1. What percentage of sales should be spent on a marketing budget?

2. What are the criteria in choosing a marketing agency? Because everybody promises you everything underneath the sun.

The author didn't tell me anything about his business, so I answered rather generically.

1. I don't think there are any hard and fast rules, but I don't think your marketing budget should generally be more than 5% to 8% of sales revenues. Of course in some industries (movies, soft drinks), it's much more. It basically depends on what you sell, how you sell it, and what kind of margins you get.

2. "Marketing agencies" can be very different things: PR agencies, web marketers, etc. I think the best thing to do is talk to some of the agency's other clients to find out what the agency accomplished for them.

Make sure you inquire about the sort of work that you're interested in buying. For instance, your questions would be very different depending on whether you just wanted a pretty website, or you wanted to boost sales through your website.

Marketing should always have goals and metrics attached. So make sure you find an agency that meets objectives and creates results for its clients.

All the best.

Tuesday, January 11, 2011

Best Entrepreneurship Quotes, Week 35

“The problem with first impressions isn’t that they're not important (They are important! They're critical!), but that we have no idea at all when that first impression is going to occur… That’s why authenticity matters.”

Seth Godin, numero uno marketing guru, explains in his 2005 book, All Marketers Are Liars, why authenticity and consistency matter so much to your brand or business.

The customer is not a passive consumer of your marketing; they interpret it the way they want to. Or as Seth says, "The reason authenticity matters is that we don't know which inputs the consumer will use to invent the story he tells himself."

Front & Centre: Canada's Future in a Global Marketplace

My Financial Post columns lately have dealt with an unusually weighty subject: the future of the Canadian economy in a global marketplace.

I have just had too many conversations lately with people who despair of the current economy and think that the way ahead is to return to the high-tariff world of the 1970s, when jobs were steady and black clouds of smoke belched from prosperous, stable factories on the outskirts of town.

There is no going back. Nor should we want to. The global economy may have taken our low-skill manufacturing jobs, and may be gunning for the high-skill jobs next. But it puts us right where we want to be: selling civilization to the rest of the world.

Canadians are in an enviable position to sell the goods and services that can build cities and developing nations: dams, roads, public services, skyscrapers, malls, governance institutions, stock markets, schools, mines, refineries, even (ironically) factories. So many developing nations are ready to splurge on high-quality infrastructure, and who better to sell it to them than us – who have built such a great country at 20 below zero?

Our economic future lies in selling services and high-end products to an emerging class of countries that want these products and can pay for them. We’re not the only people who are trying to sell this stuff – think of Europe and the Americans. But we have unique advantages – a more multicultural society than any in Europe, and a stronger and more respectful “worldview” than the Americans.

Look at the success of companies such as SNC Lavalin, which has become a global powerhouse building superhighways in Britain, ports in Spain, power-management systems in India, Central America and the Balkans, power plants in Algeria, refineries in Venezuela, gas plants in Oman... This is our future.

This opportunity is ours to seize. Or lose.

We need more entrepreneurs. People who see the opportunities in change, not the drawbacks. Skilled people who confident of their abilities and able to build trust with customers in all parts of the world. Instilling these skills and values in Canadians should be Job 1 for our governments and schools.

We can change the world.

You can click here to read my Jan. 3 column, “Prepare for the great global tournament.”

Click here for this week’s follow-up column, “Canada's future lies in knowledge.”

Saturday, January 01, 2011

Your 2011 Guide to Business Resolutions

Just in time for your New Year’s makeover, here is my list of 11 resolutions for business owners in 2011. (Top 10 lists are so Old Year.)

1. Make this a year of opportunities. Look for ways to expand your market reach, develop new products, or deepen your relationships with customers and suppliers. Most of your competition is still waiting for the economy to conclusively improve before taking chances and investing in the future. Now is your chance to seize the initiative and establish clear market leadership.

2. Leverage your strengths. If you have strong credibility in your market, look for opportunities to offer more in-depth services for current customers; they trust you and want to do more business with you. If you're a whiz at product development, accelerate upgrades that offer additional features and benefits – then promote the heck out of them.

3. Explore new geographic markets. Pick a promising country or region and get to know what makes it different. Study its culture and business practices, get out and meet business people from that region, and chat up other Canadians who have tapped that market and learned valuable lessons. The future of Canadian business lies in selling to the rest of the world.

4. Look for ways to add more value. In tough times, most marketers look for ways to claw back some of the value they offer their customers, as a way to preserve margins; you can stand out by offering more. Henry Ford said it best: “The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed.”

5. Appoint someone on your team to explore opportunities in social media. I'm pretty sure I said this last year, but now I really mean it. Facebook, Twitter, YouTube and Groupon are growing faster than anyone dreamed. They are changing the way we communicate, and you have to learn to make them work for you.

6. Focus on corporate culture. More and more entrepreneurs I know are recognizing that their best most enduring, and possibly their only competitive advantage is their companies’ culture. With the right culture, you can move faster, out-serve and out-innovate the competition. And you’ll hold on to more of your best people and naturally attract more of the right people.

7. Hire better people. To grow the company, you have to recruit more senior people with greater skills and experience. You may have to pay some of them more than you pay yourself. But that’s okay – you have equity.

8. Invest in your best employees. Some of your staff aren't going anywhere and don't deserve any coddling But the best of them deserve more attention and nurturing than they're likely getting now. Help them upgrade their skills; give them new challenges to tackle. Help them learn, grow, and prove themselves.

9. Give your staff a big audacious goal to focus on this coming year. Present them with a challenge that will compel them to dream bigger, think harder, and innovate and collaborate in new and energizing ways. Be prepared for lots of new ideas and suggestions. While you can't be expected to follow up on them all, be aware that you will be expected to put your weight behind the best ones.

10. Find a mentor. Join your industry association. Create an advisory council or a customer advisory board. As you upgrade your company, you have to become much smarter and more resilient – and only other business people can help you do that.

11. Make yourself more interesting. Book a die-for vacation, take up an adventure sport, hone your artistic talents, set yourself an impossible challenge. The more interesting and memorable you are, the more other people will want to be around you. It will also make you a happier, more confident and well-rounded leader. Why, 2011 could be your best year yet.

(Adapted from my National Post column, Dec. 27, 2010)