The Key to Hyper Growth and Business Transformation? Marketing.
“If you do not believe in marketing; if you are not transitioning into a marketing-driven company – adios.” These words started a session with Bob Heckman, a marketing executive with a Big-6 consulting firm, with 150 technology companies in 1991. Bob’s insight never stopped resonating with me and, not surprisingly, is more relevant as we enter 2020.
Sales-driven and product-driven companies face a lower ceiling and are slower to scale. Their ramp rates are stinted and more costly; their valuations are limited. In times of economic slowdowns or recessions, these companies are more likely to fail and never emerge stronger than their competitors.
Many executive teams do not fully appreciate the importance of marketing to sustainable growth and, therefore, under-invest in marketing.
What it means to be Experience Hyper Growth and Business Transformation through Marketing
Ten-year-old, sales-driven $40 million technology company implemented a synergistic marketing strategy that included target mass marketing, event marketing, social media strategy, and more. Two years later – the company had revenues over $120 million.
Two-year-old, engineering-led startup software company struggled to get to $1 million implemented a synergistic marketing strategy that included target mass marketing, event marketing, social media strategy, and more. Two years later – the company had revenue exceeding $5 million.
Five-year-old $45 million (break-even) services company implemented a synergistic marketing strategy that included target mass marketing, event marketing, social media strategy, and more. One year later the company had revenues over $65 million while reducing SG&A by 10%.
Twenty-year-old, $80 million technology company needed to transition its core business or risk being out of business as the marketplace changed. Its customers perceived them in their traditional business role; prospects did not know them. The company acquired 30 new customers a year and lost 30 customers a year. The company implemented a synergistic marketing strategy that included target mass marketing, event marketing, social media strategy, and more. It acquired 200 new customers a year for 3 successive years and transitioned its business. Its revenues increased 50% and gross margin percentage surged from 18% to 35% at the same time – truly transformative.
What are the keys to a successful marketing strategy and sustainable company growth?
Start with target mass marketing.
Profile your customers and/or most-likely prospects.
Build a viable database of prospectsRun target marketing campaigns. The messages behind these campaigns should bring insight to your targeted audience; not ads or commercials about your company or products.
Build a synergistic social media strategy to the target mass marketing strategy.
Supplement the marketing strategy with a no-fills PR strategy.
Be prudent about how the company spends money on ‘shows.’ They are expensive and do not bring the same return as other marketing tactics. If your company attends a show, make sure there is a clear pre-show and post-show target campaign built around the show. Roundtables, seminars, and webinars are more cost-effective event strategies than shows.
Ensure the company sales engine is accountable (and brings insight to your targeted audience) as it is fueled by this new marketing engine.As the company grows, enjoy your distributions. But, do not be greedy (or be greedy enough). Keep reinvesting in your marketing engine. (Case in point – a SaaS company was generating $5 million with 30%+ EBITDA. The investors took most of the profits out over 3 years period. At the same time, a competitor with a more limited SaaS offering, kept its cash in the company and invested in its marketing engine and grew to $12 million and was sold for $140 million.)
Marketing alone will not allow your company to maximize its potential and valuation. It takes sound management execution in each aspect of a company. Good or excellent execution/management in product development, operations, finance, sales and customer services is a competitive advantage in today’s marketplace. Yet, these companies still struggle to scale the business. It is marketing that will drive dynamic growth and profitability in strong economic times and will allow your company to emerge stronger than its competitors in a recession.
