Two of the most critical components to selling your products and services are what you are selling, and how you are selling. This article first talks about your product and what you are selling, and then moves to the personal assets that allow you to effectively sell that product. If you are selling the right product, in the right niche, with the right motivation and attitude, then we can begin to address the right promotion which we’d love to discuss with you on an introduction call.
Generally speaking, a weak market means that your product isn’t suited for the market. Story: I knew two men who ran a TV repair business for many years, and most of those years were a financial struggle. Up until the late 90s, the cost of new televisions was still relatively high, for example in 1997 the cost for a TV was around $30/square inch. In 2017, the cost was around $1.78 / square inch (source). The result? Less and less people are repairing TVs – instead, they just buy new. For a TV repair business, this means that you are going to have to adapt. As a marketing consultant, I would ask: What skill sets does it take to repair TVs? Maybe as TVs get cheaper, consumers buy more systems to support them (surround sound, gaming systems, etc.) and will need help setting these systems up. Let’s do some research on this trend using readily available data and see if it’s a good direction to move in. If that doesn’t work, what about computers? It might be a similar skill set to repair basic computer components, so let’s reposition as a computer repair business. Regardless of whether either of these alternate routes are viable or not, the point is, that if a business is good at something, a slight course shift might make all the difference in the world.
Did the owners change course? Nope. Why? Because they didn’t want to adapt, it seemed too painful. If you’re seeing a weak market for your products, but are the kind of owner or executive that thinks it’s more painful to watch your business die a slow death than to take a few months to change course, then we have a great starting point. However, if I take a look at the market for your product and show you it’s dying, but you still want to sell the same product the same way, we won’t be able to produce a good result.
To make this more relatable to increasing sales for manufacturers, distributors, and other B2B companies, you may be using a process that has been declining in use, and are hesitating to make the equipment investment to utilize the replacement process; You may have been serving repeat customers in one industry and have put off getting certifications that would allow you to work with other industries; Or maybe your use of a niche process or industry focus can be a huge differentiator that you don't know how to leverage. Whichever the case, we'll get to the bottom of it.
Your market is made up of anyone who could possible buy your product, and your niche is the segment of the market that you serve. For example, a machine shop could provide machining for thousands of OEM, or contract machining for a larger shop, but the may work specifically in the niche of aerospace. If you are struggling to increase sales because of a weak niche, this is a relatively easy fix in that you get to sell the same product, the same way, but to a different type of buyer. Worst case scenario we will have to revise some content on your website and alter your sales script a bit. Story: An injection mold manufacturer had a few large automotive clients that had been with them for a long time. Because of their perceived specialty in automotive, most of their marketing efforts focused on automotive manufacturing, however this client did not possess some of the certifications most Tier 1 automotive manufacturers like to see in Tier 2 or 3 suppliers. While the client could have went down the certification route, we instead decided to focus on (high-impact, fast-turnaround) a growing market of alternative energy, highlighting their one client in this market as a case study. Two months in, the manufacturer had a number of alternative energy companies in their quoting pipeline. Comparing this niche change to a year or several year process to attain the necessary certifications, and then advertising these capabilities, we achieved a much better result.
If your product or service is weak and doesn’t have the ability to remain competitive in the market then our options are one of the following: Modify; Bundle; Replace; Quit (or even worse: don’t)
If your product is actually a service (like most manufacturers) and doesn’t require physical modification, then some of the things we look at are: is this service antiquated; are the margins too small, is the market too small to sustain; do you have the wrong people working on it – to name a few. If we are talking about an actual product, we look at all of the above plus: Is it low quality and receiving complaints; is it non-functional or difficult to use; what products are on the market that perform well; is the market flooded with similar or competitive items? We use all of the above questions to make high-impact adjustments to the product or process.
Story: One of my clients manufactured dog collars and we began the process of marketing these collars. After several month of driving market awareness, we became acutely aware that these collars were not selling. This situation was confusing since the traffic was getting to the website and everything appeared to be working correctly. After performing a little bit of market research, I realized that these collars were virtually indistinguishable from many of the other collars on the market that were lower priced. Collars that were priced the same as my client’s were more attractive or offered more options. My recommendation was to create a package that contained a color coordinated collar, leash, name tag, and toy as a dog-lover’s gift set. We call this technique “complementary product bundling”- think selling the hotdog with the ketchup packet. This gift set was a no-brainer purchase item for that hard to buy for pet lover, and the best part about it was that the high-priced collar was hidden inside of the package price. The client started generated sales immediately as we implemented a social media market plan. Examples of bundling with services would start with the question: What value added services would make my core service more valuable to my customers? Can you provide (or provide the perception of providing) design for manufacturability consulting, stock warehousing and on-demand shipping, quality assurance, expedited production, value added plating, painting, or finishing (even through a partner)? These value adds can be "bundled" with your non-unique service and underwhelming prices to give your customers the perception they are getting a great deal.
Replacement is the second most expensive way to deal with a bad product – the first being: Quit (or even worse: don’t). Much like the TV repair service story, this option requires some soul searching and expenditure. We generally know it’s time to “replace” when there is significant negative feedback in the marketplace (think 1 star reviews), or when we have exhausted the use of expert services to market the product without result – and don’t jump to this last assumption without being sure. Also like the TV repair story, this strategy assumes that you have good people with adaptable skill sets and none of the items in number 4 below. If you have a great team that is adaptable, a good facility, quality control, and good relationships, replacing your current offering with one that is more marketable is very doable but not without cost. If you are using manual machines for prototyping, maybe it's time to invest in 3d printing machines and training. If you are losing business because of slow turnaround times, maybe you need to replace your 2-axis machines with 4-axis. If the materials you are casting or molding are being phased out through regulation, you need to invest in the capabilities to mold or case the replacement products instead of hanging on to the hope of manufacturing legacy parts.
When is it time to close up shop and go work for Best Buy?
- Personal motivation and drive to generate wealth
- Great employees with dedication and a sense of ownership
- Capital equipment that has significant residual value
- Owned operating space
- Proprietary processes or knowledge that is valued by the market
- A significant paying or non-paying following
- A strong personal desire to help people or businesses
- The ability to generate a mental image of your business succeeding
This list is not exhaustive, but based on my experience, if you have the first bolded item, and at least one of the other items on the list, you can make a go of it, even if it means extreme downsizing, or a complete reversal of processes. I give this advice to people with many preventable health issues: A huge number of mistakes got you to this major acute illness, and you will have to take drastic action the other direction to reverse that illness. Don’t expect to cure type II diabetes with a couple salads per week. Don’t expect to reverse years of dwindling profitability with a social media campaign.
- Apathy towards personal growth or wealth generation
- Multiple lawsuits against you
- Employees that dislike you and their jobs
- Dangerous products
- Products that do not function properly
- Inconsistent services so clients don’t know what to expect
- 1, 2, or 3 star average reviews on different rating platforms
- High debt to income ratios
Once again, this list isn’t exhaustive, but if the first bolded item applies to you, and any of the others do, there is a good chance the business you are in is not sustainable. Some of the items on the list can be changed with some work, but keep in mind that if you do not have the desire to grow as a person, then it will be nearly impossible to change the other items on the list. In other words, if the “apathy towards personal growth or wealth generation” applies to you, then it’s likely you are causing harm to yourself an others by staying in business.
I know from personal experience how difficult it is to evaluate your business when you are in it. Image having another CEO with extensive experience developing businesses just like yours as another set of eyes, who can evaluate where you are, and what needs to be done to get you to where you want to be. That's exactly who you'll be working with Wheeler Consulting Co. Unlike so many other consultants, we've implemented full-scale, effective marketing campaigns, and built or restructured businesses for long-term success. Let's have a conversation to see how we can help your business today.