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Betterment…Is A Strategy July 12, 2013

Posted by David Dirks in business strategy, marketing, Marketing Buzz, Sales Strategy/Tactics, Sales Tactics.
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DirksProPhoto Why do people buy your products or services?  Are they forced to buy them out of necessity? Do you have a monopoly? Probably not. But understanding why people buy – and it’s often not on price – is one key to business longevity.

If you sell products or services that can easily be obtained elsewhere, why should they buy from you?  Think about yourself as a consumer for moment.  When you make a purchase – are you making it to contribute to a life of mediocrity?  No.  We buy things because of one basic reason: betterment.  I buy milk as a staple but the place I buy my milk is the place that offers me the best tasting milk at a fair price.  I don’t buy my milk anywhere else because I feel the milk I buy there is better for me and my family.

Betterment.  It’s a word…a noun to be exact.  Websters defines it as “becoming better” and “an improvement that adds value to property…”  Consider yourself “property” as a consumer.

As a business owner, your job is to convince the rest of the world (or at least your wedge of it) that your product or service offers someone a way to better themselves…their lives…their families.  In a world where everything seems like a commodity, your edge is communicating how your company delivers on improving something in the life of your customer and, most importantly, your prospective customers.  The success of your business model depends on it.

That said, if betterment was easy to define, everyone would be doing it but few are – just look around you.  Most business owners are stuck on price or try to differentiate based on product or service features or benefits.

Apple has long been a master at parlaying great technology and wrapping it around betterment.  Apple marketing and sales messaging is almost centrally focused on how Apple products enhance or better a life.  And they are able to deliver on that promise to (if you are a pc head, you don’t get this but we’re ok with that).

If you follow a blog, perhaps this one – you have the expectation that spending time here will better your life or business in some way, shape or form.  Otherwise, you wouldn’t spend you time on any blog that didn’t offer and deliver on that.  The most popular blogs are followed because people get something out of them (entertainment value, economic value, etc.) that they can’t find easily elsewhere.

The first step on the path of a message of betterment is to translate what your product or service does to get a customer there.  The destination is betterment.  For example, a landscaper cuts the grass and makes the property look great each week.  Where’s the betterment? How about the time it frees you from having to do it and spend more time on things you want to do instead – like spending more time with family.  By making your property look like an estate, you feel that your property and the quality of your life are enhanced (as opposed to looking at tall grass and weeds).

In other words, a betterment message is thinking of your product beyond the standard features and benefits it offers.  How does it translate – tangibly or intangibly – into a path to making some aspects of a customers life better?

The second step is making sure all of your marketing and sales messaging is zeroed in on the elements of betterment…clearly…concisely…and consistently.  You have to be able to draw a picture in the mind of the customer so they don’t need an algorithm to figure out why your product is the one they should buy.  They should “get” betterment.

Never easy to do but clearly worth the investment of time and effort to get there.  Betterment – it’s a strategy.

Driving Foot Traffic: Woolworth’s Style December 14, 2012

Posted by David Dirks in Driving Store Traffic, Retailer Store Strategies, Sales Strategy/Tactics, Solving Business Problems, Strategy.
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David Dirks

David Dirks

It took the latest issue of Businessweek to remind of that oftentimes what is new is old.  Case in point: the Woolworth’s food counter.  Remember (for those of you who are old enough to) the days when you local Woolworth’s store had a lunch counter where great, cheap hamburgers, fries and a great milkshake where just across from those square product bins that checkered the store?  Woolworth’s was a pioneer in creating a way to drive foot traffic with something that had nothing directly connected to the products they sold.  By having a soda fountain style lunch counter, there sales per square foot where for a long time better than average.

The lunch counter couldn’t save Woolworth’s from going out of business after decades of success but the idea of driving traffic by providing food lives on.  Nordstrom operates about 200 restaurants of one kind or another, including coffee bars.  Barnes & Noble developed its coffee bar concept to drive traffic and create a reason for people to hang around the store longer.  You’ll also notice that the coffee bar is a place where people meet to socialize.  They know what Woolworth’s long understood: The longer they stay, the more chance they will buy.

So am I suggesting that brick & mortar store owner rig up the BBQ and serve up some burgers?  Not exactly.  What I am suggesting is that in the battle of driving foot traffic it might be that food or drink (coffee bar?) might just do the trick.  As I always say, there is no magic bullet for creating foot traffic – only hard work and great execution wins the day.

What can you do to create ways for people to want to come to your store and stay a bit longer?  Think about it.

Where’s Your YouTube Channel? September 19, 2012

Posted by David Dirks in Becoming A Thought Leader, Digital Media Strategy, YouTube Channel Strategy.
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Do you have your own YouTube Channel for your business?  If yes, congrats to you as you are taking advantage of yet another great opportunity to expand you market presence and brand.  Oh, and you’ll be able to sell more products or services over time too.  If you answered that question with a no, then I can’t tell you how disappointed I am that your business doesn’t have its own YouTube Channel.

YouTube used to be the place were you could see cuddly little animals performing stupid tricks (or sometimes funny ones).  Or it was the place you’d find dumb pranks or really dumb tricks.  It still is but to a much lesser extent than before…especially when Google decided to purchase YouTube and make it part of its product family a few short years ago.  Since them, Google has really revved up the YouTube business engines.  The YouTube of today is moving in the direction of providing original programming, providing an expanded array of advertising options and now a vastly improved (and valuable) analytics package like its great Google Analytics does for websites today.

So, why consider building a YouTube Channel?  For one, YouTube represents a huge organic search engine with literally millions and millions of people scouring for information on just about any topic you can think of (that is legal and not pornagraphic of course).  Think of YouTube as you do with Google’s organic search engine.  Every day people are looking for information products, services, ideas on a wide variety of topics…including whatever it is your business does and how it does it.

I don’t care what business you are in, people are looking for real and valuable information that will in some way help them.  I can also tell you what they aren’t looking for: being sold a product or service…at least not directly like some carnival barker.

Want to see the emerging direction of YouTube?  Check out this channel:

http://www.youtube.com/howcast

Notice that Howcast has over 389,000 subscribers and over 650,000,000 views…something we marketers dream about.  Now, you might not have that many subscribers or views but you certainly can develop a large following in the context of your business model.

Here’s an example of a law firm that has developed a YouTube channel that drives between 30-40% of their new client flow.

http://www.youtube.com/sparandbernstein

Spar and Bernstein has 529 subscribers which is excellent but the telling number is the 742,000+ views the channel has had since it started in 2007.  The video on most of its 546 clips is not the best quality but that doesn’t stop people searching for information on immigration law from finding and watching it.  Brad Bernstein, who in my opinion is not only a top notch immigration attorney but also a marketing visionary.  In 2007, he decided to tape his daily radio show and then post the video clips of the show onto his YouTube channel.  The results over time have been spectacular in the context of driving real business to the firm.  And, if you watch the videos, they are educational as Bernstein is answer live questions from his radio show listener audience.

YouTube.  It’s not the old YouTube you used to know.
Watch for more upcoming posts on establishing a YouTube channel for your business.  You can do it!

Pivoting as a Business Strategy July 5, 2012

Posted by David Dirks in business strategy, Strategy.
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A Wall Street Journal article (‘Pivoting’ Pays Off for Tech Entrepreneurs, April 26, 2011) caught my attention.  What used to be called a “failed business idea” is now known as pivoting.  That’s when you have a business model and learn that it does not provide the revenues and profits you need to sustain it (or the venture capitalists who might back you).  Pivoting is the art of then taking the pieces of the business model that work and creating a new business model…even if that means going 180 degrees in another direction.

Pivoting as a business strategy is not new.  It just didn’t happen with much frequency until the advent of the web, apps and other such fluid technologies.  Now, if it doesn’t work, just pivot quickly to something else.  To me, pivoting makes sense.  If you start with a business plan and model that you learn has faults, you just pivot to another business plan and model.

Of course, pivoting is not easy and full of risk.  First, pivoting is an admission that your original business model is either failing or has already failed.  In the “old days” businesses that failed or were on the path to failing…just plain went out of business.  Secondly, you can’t pivot slowly.  If you pivot you have to do so with all speed.  Yes, pivoting is like changing the tire on a car that is still moving at highway speed.  You don’t have time to extend the debate on what in your business model stays and what parts get junked and replaced.  Third, pivoting doesn’t guarantee anything.  It just means you get to live and learn another day.

Pivoting isn’t new.  Thomas Edison pivoted more than 1,000 times before perfecting the light bulb.  Sir James Dyson created 5,127 prototypes before he perfected his bagless vacuum. Pivot if you dare.

The Experience is the Marketing April 12, 2012

Posted by David Dirks in business strategy, Marketing Buzz.
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You want a great marketing strategy?  Create an incredible customer experience and you’ll have the greatest contributor to new and recurring business you could have.  Think about it.  Most business owners and managers think of marketing and promoting their business in the context of spending money on advertising.  While certainly advertising and other forms of marketing your business are key, creating a superior customer experience is the first worthy marketing investment you can make.

This is often a mistake made by new business start-ups who in the heat of battle forget that the experience they create for their customers is the most impressionable and lasting investments they can make.

And it doesn’t much matter that whether you provide a product or service either.  We all know how much Apple pays attention to the user or customer experience.  Every detail of the path their customer takes has been designed and engineered to provide a great and positive experience for the Apple customer.  And yes, Apple spends plenty on traditional advertising and marketing. But I’m willing to bet that the experience of buying from Apple and then working with their products sells more product than the advertising does.

Do you know of a local business where they have created a customer experience that has the impact to keep you going back time and again?

So, for those businesses that compete on price as their primary “marketing” strategy, take note: price is your race to the bottom.

Here are a few things to consider in developing a “marketing experience” for your business:

  • The customer experience begins at the point your prospect or returning customer enters your business – whether through your store or via your website.
  • The first few moments of contact and connection to your business are the most critical.  First impressions are important and immediate impressions are critical.  If the initial impression is negative, you probably have less than a 50% chance of redeeming yourself in front of your customer or prospect.
  • Customer experience has to be designed from end-to-end in order to ensure that the experience is engineered from the time they enter your online or offline store/office to the time they leave.  End-to-end.
  • Layout your customer experience on paper.  You need to be able to describe what positive emotions & attributes you want the customer to get impacted by.  You have to design a flow of experience that incorporates an impression that can be implanted into the customers brain.
  • People within your business provide the most critical impact on a customer.  Make sure that everyone is trained to provide the kind of customer experience that will delight.  If you’ve been to a place like Disney World, you know what I mean.
  • Be flexible and able to adjust your customer experience as you see/hear the reactions from customers. Be willing to test new ways to improve the customer experience.  Look for examples of excellent customer experiences outside of your industry.

Creating an exceptional customer experience is not easy.  If it was, everyone would be doing it and it’s pretty clear most businesses don’t.  A positive customer experience can create customers that stick with you and competitors who can’t follow you.

7 Steps to Social Media Marketing Success July 19, 2011

Posted by David Dirks in Digital Media Strategy, Social Media Marketing.
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There was a time not long ago when ‘going digital’ meant that your business had to have a website.  However, having a website presence is no longer enough.  To reach more prospects and keep current clients from wandering away, creating and leveraging social media marketing tools like Facebook or Twitter can be critical.

Social media marketing (SMM) is simply the process of creating and engaging both prospective and current customers using social networks, online communities, blogs, and other digital platforms.  The ‘social’ aspect social media marketing means that there is a two-way dialogue between you and your customers.

According to the 2011 Social Media Marketing Industry report, businesses noted three essential benefits of social media marketing.  First, it provides a way to stand out in an increasingly distracted world.  Secondly, SMM can help improve your search engine rankings over time.  And last but not least, SMM can generate qualified leads for your business.

Small business owners are already taxed for time trying to attend to daily business matters.  Now they find themselves trying to figure out how to create and leverage SMM.

Here are 7 key steps that should be considered as you establish a social media marketing strategy for your business.

1.  Have a goal for your social media strategy.  Social media without goals is aimless.   If you create a Facebook Fan page, you need to be clear about the type conversations you want to engage prospects and clients in and the results you expect.

The Orange County Business Accelerator, (www.facebook.com/OCAcelerator), for example, uses its Facebook page primarily to promote its latest workshops and forums.  Filling seats for their workshops is the goal.

Local author Gene Ladd (http://tinyurl.com/GeneLadd) uses his Facebook page to engage his readers and followers in discussions related to topics covered in his nutrition and spirituality books.  His goal is to grow his following with like-minded people who are also potential buyers of his books.

2.  Social media choices: less is more.  Focus on a few key social media platforms and excel on them.  With literally hundreds of digital platforms to choose from, start with one, say a blog, Facebook Fan Page, Twitter, or your own YouTube channel.  Once you establish a presence on that platform, then invest time in learning it inside and out before adding any other social media platforms.  The idea is to only take on what you have time to handle.

Stick with the basic and most popular social media sites like YouTube, Facebook, Twitter, WordPress, Linkedin, Blogger, and BlogTalkRadio.  In most cases, I highly recommend starting with a simple blog or at most, a Facebook Fan page at first.  Neither costs anything to start other than your investment of time.

3.  Social media marketing is a content beast.  You should be prepared to feed the beast on a regular and consistent basis.  The basic types of content are written (i.e. blog or Fan Page post), video (i.e. YouTube.com), and audio (i.e. BlogTalkRadio.com).

Develop & produce fresh, relevant, and compelling content as often as you can.   To take some of the pressure off of yourself, encourage your partners and/or employees to also provide relevant business content whenever possible.

Create content that can be distributed across multiple social media platforms.  For example, Manhattan-based immigration attorney Brad Bernstein video records his daily radio show and then uploads it to his web radio channel (www.blogtalkradio.com/sparbernstein) and his YouTube channel (www.youtube.com/sparandbernstein).

Bernstein’s YouTube channel gets an average of 4,000 views each week.  Since he created it in 2007, his channel has garnered over 526,000 views and translates into booked consultations with prospective clients every week.
4.  Make your social media easy to find and link everything together.  What good is a blog or a YouTube channel if no one can find it?  If you have a website, make sure to link every social media property you have to it.

5.  Promote your social media sites constantly.  Promoting your social media marketing platforms is a 24/7 task.  Add your social media addresses to your email signature, on your business stationary, and your website of course.  Most social media sites allow you to add links so you can cross-promote on every site you have.

6.  Engage your audience.  Ask questions or discuss key issues in the context of your industry and business.  Create an open loop that encourages people to respond back.  Remember, social media means you have to be ‘social’.
7.  Social media marketing for the long haul.  All too often I see businesses that start a blog, Facebook page or some other social media presence and then flounder with little follow-up.  Eventually their social media efforts dwindle in direct proportion to their flagging investment of time creating and posting content.

Keep in mind that when you first engage in social media marketing, it will seem to take forever to build a following.  Like top athletes, you’ll ‘hit the wall’ on social media effort.  Keep pushing forward until you get your ‘second wind’ to keep up your social media efforts.

Most social media sites cost little to establish your business presence on.  The real cost is in creating and then sharing content that is relevant and engages your prospective and current customers.

If you can consistently create and share content with your social media audience of prospects and customers, you’ll be that much farther ahead of your competition.  Be assured that most are still asleep at the wheel of the social media opportunity but not for long.

What Did You Do Today? April 14, 2011

Posted by David Dirks in business strategy.
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On my way into lower Manhattan each day, it seems that the Girl Scouts are everywhere.  Not that Girl Scouts are hanging around the Path train station.  Rather, the signage of their current branding and recruitment campaign is everywhere.

You just have to love this campaign.  It positions the Girls Scouts as a modern looking, leadership bound, outside experience, and girl power organization while at the same time it works as a recruitment tool for both potential scouts and leaders.

What did you do today? Just the line itself pulls you inward and makes your think…just what did I do today that helped me and my community?  It’s a powerful use of both imagery and words that strikes a deep cord…at least to me and perhaps many others who trudge everyday into the bowels of Manhattan…spending hours each week just moving in and out of the Big Apple.

I particularly like the global image being projected here.  That the Girl Scouts are not just a USA thing.  The Girl Scouts embrace world cultures and religions.  It’s a statement of both openness and a welcoming nature.  It’s a celebration of women, both older and younger, sharing in the spirit of learning, community, leadership, ambition, and experience.

From a branding point of view, this campaign is a textbook example the simplicity and power of imagery married with meaningful, powerful statement.  Clean and simple.

What did you do today?

PS:  They cleverly launched this campaign during the annual Girl Scout cookies sale.  Very clever indeed.

Premiums as a Branding Strategy? January 17, 2011

Posted by David Dirks in business strategy, Local Brand Development.
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I have the same dream often.  I’m at a tradeshow and as I go to each booth, I find that there are no premiums for me to scarf up.  Nobody has any of those glo pens or squeezable stress balls that come in every shape imagined by mankind.  Nobody trying to shove another bag at me so I can carry all the plastic promotional items I suck up at each booth.  I wonder.  Is this a nightmare or is this a dream come true?  It depends on which side of the premium business your on.

Let me be the first here to say that I’m not against the use of premium items for tradeshows.  If you can afford it, go for it.  If you expect that a premium is going to help you get more business or, as the premium sellers will tell you, it can extend your brand, you’ll be sorely disappointed.  You’ll be staring at the phone, hoping one of your thousands of premiums you’ve distributed makes the phone ring.  It could happen but the odds are against you.

When was the last time you heard anyone say, “Oh my God.  Those premiums are making the phone ring off the hook!” or “Thanks to my premiums, my small business is now a huge brand in my market!”.  The answer is, you haven’t.  And there’s good reason for that.

In the context of small business enterprises, premiums are a luxury item.  And it doesn’t matter how inexpensive they are either.  It isn’t inexpensive if it doesn’t directly drive business.  When was the last time you called a business using the phone number on their premium pencil.

The problem is, we’ve been so brainwashed that premiums are a ‘must have’ item when you’re looking to promote your business.  If your booth doesn’t offer a premium, you look, well, lame.  How could we have a tradeshow booth without some kind of premium with our name slapped on it?

Large companies, which drive the entire premium market with their huge, annual premium purchases, have the ‘fat’ available to burn.  Small business are generally not in that category.

The other challenge is that the premium industry as created a who army of people who are nothing less than premium freaks.  They come to tradeshows with the goal of getting every free premium they can fit into their premium bags.  I call them ‘tradeshow groupies’. They visit your booth, not even remotely interested in your product or service, only to open their bag wide enough so they can fit your premiums in it.

Do you know where most of those premiums end up after a time?  Shoved in some drawer or thrown out with the trash.

I received a note from a premium vendor the other day who called the use of premiums as a strategy for extending a brand.  Are you serious?  Sure, if you sell premiums, you have to say that.

Here’s another strategy:  Invest your time and money instead on improving your website/blog SEO…that will do much more to further you business than buying inexpensive premiums.

So, the premiums industry goes on its merry way.  Tradeshows will continue to shovel out tons of premiums.  Booth vendors will be pleased, if only because they got rid of the final box of premiums, avoiding having to schlep them back to the office.

Of course, the happiest people are the tradeshow groupies.  They continue to collect their share of the loot.  They’ll get their fix every time.  It’s guaranteed.

In the meantime, the real winners are the vendors who sell premium items.

Do what you will.  Bow to the pressure, either self-inflicted or peer-driven, and buy them if it makes you feel better.  Premiums are in most cases, a ‘nice-to-do’ but when it comes down to it, rarely drive business or branding.

About Business Incubators… November 29, 2010

Posted by David Dirks in business strategy, Solving Business Problems.
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Do business incubators really create jobs in a substantive way?  According to the National Business Incubation Association, the answer is a resounding ‘yes’.  According to the NBIA, nearly 87% of small businesses using a business incubator survive to their fifth year in business versus only 44% of small businesses who didn’t use an incubator.  Business incubators are once again a hot topic in economic development circles around the country. According to the NBIA, there are about 1,200 active business incubators in the U.S. today.  Conceptually, small business incubators make all the sense in the world.  By providing low operational costs during the early stages of business development, incubators are placing a bet that by subsidizing some of the operational costs of doing business, these start-ups will have a better chance for survival.

Recently, Syracuse University published an extensive research project that focused on the performance of incubators.  Their research tells a different story.

“The findings reveal that the effects of incubation are potentially deleterious to the long-term survival and performance of new ventures. Incubated firms outperform their peers in terms of employment and sales growth but fail sooner…claims that incubators are highly successful and serve a significant number of businesses are overstated.  The comprehensive process used in this study to identify the largest possible sample of incubated firms uncovered a fraction of the number of incubated ventures that supporters of incubation claim exist.  While improvements are likely possible to the methods used in this study, this study roundly refutes the poorly documented and unpublished studies that cite much larger numbers of incubated firms and much higher levels of performance.  The methods and findings of this study showcase that more research is necessary to fully understand the effectiveness of incubation programs. Until then, these findings are instructive in helping and motivating business incubators to improve their past performance.”

The truth is, there isn’t a lot of substantive and unbiased research on the long term results of small business incubators.  If you don’t believe me, just look for yourself.  Lots of claims of success from the likes of the NBIA, which has an obviously biased interested in promoting the concept of incubation and others.

Are incubators important to economic development (since it’s reported that nearly 94% of them are non-profit and sponsored for local economic development)?  The short answer is yes.  There are certainly success stories of small businesses who have survived the early years and have grown out of incubation.  And we know that small business is the engine of job creation in the U.S.

Is public/private subsidized incubation an good long term investment?  Here are my thoughts on this based on my own research so far.

1.  Tighter vetting of potential applicants for an incubation program is a must. There is no amount of incubation that can fix a badly designed business model.  The failure rate of small business is high mostly because people start a business that has an inherent flaw.  Like starting a cash-intensive business without proper funding for the first 3-5 years or starting a business because it sounds like a neat idea until we found out that few people are willing to purchase the goods or services.  Having a business plan in hand means little if it isn’t vetted against the same kind of tough questioning and criteria a venture capitalist would use.  You don’t just let any business who can show you that they can pay for the incubation services in unless their business plan and model have been deeply vetted.  Many incubators are funded with public money and what I’m proposing helps insure that taxpayer dollars are invested in only the best of the start-ups.

2. Even after vetting the best small business opportunities, failure is part of the process. You have to expect to fail to some degree in order to succeed in the long run.  If you study the vetting process used by venture capitalists, you find that despite their best efforts, a percentage of their investments will fail.  That doesn’t mean you should run from the idea of either using or creating a incubator.  This just means that failure is an expectation in the early start-up phase.

The key question is: what have we learned from the failures that we can successfully transfer to new participants?

3.  Targeted versus generic incubator? Most incubators are general purpose in focus, which means they will entertain any type of start-up for admission into their programs after meeting their criteria.  My business sense is that a focused, industry-specific incubator program has the best chance of impacting economic development.  For example, if an area was focusing on solar power panels, then creating an incubator program to attract and retain those kinds of firms would be inherently a powerful way to have real impact in business attraction.  A industry-focused incubator program would operate on a triad of providing 1) specifically designed space suited to that industry, 2) Access to research & development available in that industry, and 3) access to investment capital be it private angel networks or other investment programs.

For an area that wants to put a stake in the ground that targets a specific industry, having an incubator program that has industry-specific expertise is a winning differentiator.

4. Intellectual capital is just as important as investment capital. The incubator subsidy is surely helpful to a start-up but I believe the quality of the intellectual capital that is made available to these incubator start-ups is even more vital.  There is no substitute, especially in the early stages, for providing seasoned and unbiased business professionals who can ask the right questions in their field of expertise.  Asking the right questions leads to helping the business owner/manager in their own learning process and education.  I believe an incubator has to have only the best available expert talent available to its participants.  Those that serve as the intellectual base for an incubator need to be vetted as well. 

5.  Regular and intensive business reviews of all participants is required. Incubation participants should be prepared to go through an intensive business review process based on performance benchmarks that have been set up as a part of the business plan/model.  If a business wants to participate and receive subsidized business services (especially from public money), it should be prepared to undergo a rigorous business review process that does a deep dive on current business performance.  This process allows the incubator leadership to assess and help identify resources for areas that need immediate attention…and before they become a real threat to long term success.

6.  An incubation program takes long-term vision. Community leadership, both public and private have to have a clear vision for the long-term effort required to create enough success stories to offset the public and/or private investment required for organic business growth. 

7.  Equity in participating start-ups should be explored. Today, most incubators look to break-even on the services they subsidize to start-up companies in return for the potential for new job creation and tax base expansion.  However, I would argue that to qualify for access to a powerful incubator program, start-ups would be required to give a percentage of equity to the incubator.  It might be a small percentage (perhaps between 5-10%) but it would at least provide an additional possibility of the incubator program generating more capital to invest back into the program when their equity position was sold.  The incubator equity would be in exchange for the subsidy received by the business.  In this scenario, incubators would not have to provide any additional funding other than their current program offerings to receive an equity slice.  I think that’s a fair proposition, especially for incubators that receive funding from public tax dollars.

8.  Organic business growth is a key differentiator for economic development. Traditional economic development relies primarily on new business acquisition and current business expansion as a measurement of performance.  Developing the infrastructure for becoming a magnet for new start-up business is a way for regions or counties to differentiate themselves from their competitors.  A high-performing, fully funded, and well-equipped start-up program tells other potential businesses looking to relocate that the area is truly committed to business expansion and job growth.

Business incubators I believe can play a critical role in long-term organic business growth.  The key to incubator success starts with engineering the program to run itself like a for-profit business.  An incubator with a strong, well vetted intake process along with a substantive and ongoing business performance/review process, and the best business support resources stands the best chance of creating lasting jobs for any region.

Shifting Your Business Strategy – 2 August 20, 2009

Posted by David Dirks in business strategy, marketing, Recession: How to Beat It!, Sales Strategy/Tactics, Solving Business Problems.
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David DirksIt would be the understatement of the year to say that the auto industry has been literally crushed under the weight of too much production for too little demand.  The auto industry problems are not just isolated to demand issues.  Despite being the worst car buying market than we’ve seen in a few decades, there is one car company that seems to be profiting from the ravaged auto market.  It’s also a car company that few would have thought would make it and it’s called Hyundai.

My first introduction to Hyundai was back in the early 1990’s when Hyundai was still a brash newcomer to the American buyers.  It’s appeal to me back then was the same appeal it has today:  cars available at a great price.  There was only one problem.  I saw the problem first hand at a Hyundai dealership when the salesman started the engine and smoke began pouring out the the engine.  The salesman wasn’t fazed but my wife and I were aghast.  Where is the smoke coming from and why?  Without missing a beat, the salesman told us that there was some paint from the factory that had to sometimes burn itself off the engine block.  Yeah, right.  We left and never looked at a Hyundai since then.  That was a long time ago.

Since then and now more than ever, Hyundai has been growing its market share here and in Europe.  How did they do that?  How did they come from laughing stock of the auto world to respected car manufacturer?  How did they manage to introduce a luxury car, Genesis, that actually won the Car of the Year award?

They did it by shifting their business strategies.  Notice the emphasis on ‘strategies’ in the plural.  Over the years, Hyundai recognized that it needed to be more than a car company that built & sold cars at low price points.

The first issue they attacked was quality.  Their manufacturing processes caused them a huge amount of grief and consumer distrust of the their brand.  Over time, they dramatically improved quality in their manufacturing processes.  Then, to attract buyers back to their showrooms, Hyundai did the unthinkable at the time: offering a 10-year, bumper-to-bumper warranty on every car they sold.  In effect, they basically guaranteed the quality of their cars for the life of the car.  This when the industry standard was 36,000 miles.  This strategy went a long way towards getting their customers back into the showrooms and buying cars again.

More recently, to encourage buyers back into their showrooms during the worst economic conditions since the Great Depression, Hyundai brought out another big gun and shift in strategy.  Many took the Hyundai Assurance Program as a marketing gimmick but that soon proved to be untrue.  By assuring buyers that it would take back a leased or purchased vehicle in the event of the customers job loss, Hyundai took another big step towards growing marketing share.

Here are some of my takeaways based this continuing success story:

1.  Acknowledge your weaknesses and actually fix them.  Hyundai suffered initially with awful quality problems that make their cars the butt end of late-night comic routines.  While offering cars at some of the lowest price points in the market was their basic strategy, they had to shift emphasis on quality.  That meant shifting large amounts of resources within Hyundai to insure that quality was more than job #1.  Hyundai gets great credit for recognizing a key weakness in their strategy and fixed it.

2. Create market differentiation by communicating your strategy shift clearly and loudly.  Hyundai introduced its ground breaking ’10 year, 100,000 miles’ warranty to insure people understood it was serious about quality.  It set a new bar on auto quality and Hyundai wasn’t afraid to put serious marketing muscle behind it.

3. Business strategies can always be fine-tuned.  Staying true to its mantra of offering lower priced cars versus almost any other manufacturer, it entered the luxury market with it’s now highly acclaimed Genesis.  The Genesis is a true luxury automobile but offered at one of the lowest price points on the market compared to similar luxury models from competitors.

4. Do more than your competitors to differentiate and strengthen your market position.  When economic hard times hit, Hyundai hit back with its Hyundai Assurance Program.  That kind of groundbreaking marketing strategy was just what the Doctor ordered to bring more buyers into the showroom.

Hyundai stayed the course on its purpose to build cars and sell them at low price points.  It shifted it’s business strategy to insure that it could deliver on that promise and sell cars to satisfied customers.  That’s a long way from its charred introduction more than 20 years ago here in the U.S.