Monday, March 30, 2009

Does your business have a "Facebook" Strategy?

Facebook is certainly a media darling these days. And in my opinion, for good reason. There are so many applications for both personal and business use that everyone should be using it.

I recently found this great article that explains a simple 5 step strategy for using Facebook for your business.
Let me know if you have any other ideas-- we add our own steps.

Basic Facebook Strategy ; 5 simple steps

Friday, March 27, 2009

Why Business Blogs Fail & Succeed

This is a great presentation from Lee Oden from this weeks Search Engine Strategy Conference. The how to's are easy to follow for business of any size!

Wednesday, March 25, 2009

Spreading the Word; Change Your World

These days, any size retailer or small business has a lot on their minds-- and so do your customers. It's as tough as ever to get people to spend money in your store, let alone talk about it to other people.

How can you get them to spread the word for your business today? In a word: Creativity.
Saw this great article that shows you how.... by Marketing specialist Jim Connolly.
word of mouth marketing how to Jim's Marketing Blog

He's got a ton of other great content- and a marketing newsletter too! Great stuff. Hope it helps.

Tuesday, March 24, 2009


Look at any of the grim economic news – consumer confidence and manufacturing indexes are at 25-year lows, major stock indexes declined by more than 30 percent, storied companies such as Lehman Brothers, Bear Stearns and AIG have succumbed to the credit crunch – and it’s easy to see that the world is in a significant recession. Governments around the world are scrambling to save the financial system, led by the United States, which has stepped in with roughly $8 trillion in bailouts, stimuli and other guarantees—an investment worth half the size of the entire U.S. economy.

In an economic downturn, decision-making is distilled in to a clear-cut choice: Do you go on the offensive, aggressively pursuing growth, or do you become defensive, protecting your revenues and profit margins? In CBCG’s experience, the decision is determined by a firm’s competitive position and ability to counteract income-statement and balance-sheet stresses caused by the downturn. Imagine then that you’ve just won the coin toss. Should you receive or kick off?
Lessons learned from the last recession, the dotcom bust of 2001 and 2002, provide hope for survival and some guidance for success. They show that while the impact of economic downturns is wide-ranging across industries and companies, it seldom creates a level playing field: in a downturn, some companies clearly outperform others (see Figure 1).

For example, in retail, while thousands of stores closed across the United States in 2001, and companies such as Kmart and Ames filed for bankruptcy, retailers such as JCPenney and Kohl’s outperformed the competition.
Given that there are such opportunities to outperform even during severe downturns, in 2009 most retailer’s are facing this crucial question: How do we approach those decisions that will allow us to outsmart our competitors?
The choice: Offense or Defense?
Severe economic downturns cause numerous stresses on income statements and balance sheets, led by declining revenues and margins, productivity problems and cash shortages, among others. The current downturn certainly has its own unique DNA, with credit contraction, bank failures, rapid declines in housing values and low consumer confidence impacting nearly every aspect of business. Given this challenge, CEOs looking to the future face a difficult question: Should they go on the offensive, taking advantage of the downturn to buy struggling competitors, or are they better off playing defense, hunkering down and protecting existing revenues and operating margins?
The question does not have a simple answer. The right choice between defense and offense may differ for each particular problem. In some cases, offensive strategies such as pursuing revenue growth in a key market segment or strategic investment in a particular business unit may be the right choices; in others, aggressive protection of revenues, profit margins and the balance sheet may be the correct.
With limited resources available during times of economic distress, the key question is which option to pick and how to plan the execution.
Going on the offensive is a restricted option
Several factors determine a company’s ability to go on the offensive during downturns. First and foremost is the ability of the core business to withstand the stresses created by the downturn. For example, countercyclical revenue streams can allow a retailer to withstand a downturn in one product category if it is successful in another; strong innovations can help to maintain pricing power; sufficient variability in cost structure can help protect margins, and a sound capital structure can give a company the financial flexibility to expand or acquire competitors. Companies that developed these traits in boom times are generally in the best position to take the offensive. Moreover, these traits have been in place for some time before the economic downturn and the related headwinds began.
In some cases, luck or timing can have a significant impact on the ability to get aggressive on go on the offence. Consider this: What if Microsoft had succeeded in buying Yahoo! in February, 2008 for $45 billion, a premium of 62 percent at the time? By the end of the year, Yahoo’s stock had fallen an additional 50 percent, leaving Microsoft in a much better position.
In other cases however, the ability to go on the offensive is purely a result of prudent business strategies put in place prior to the downturn. Before the recession of 2001 hit, Kohl’s focus on a low-cost structure, a unique merchandising philosophy, lean staffing levels and sophisticated management of information systems led to growth that significantly outpaced the retail industry (see Figure 3). When the downturn began, Kohl’s was strongly positioned for an offensive strategy. While other competitors, such as Ames and Kmart, were declaring bankruptcy, Kohl’s step-by-step expansion included organic growth and a series of acquisitions. Eventually, Kohl’s emerged from the downturn with 50 percent more retail space and access to numerous new major metropolitan areas.
Figure 2: Kohl's Goes On Offense And Successfully Outpaces Industry Throughout The 2001 Downturn

Kohl’s Continues its methodical, step-by-step expansion strategy throughout the downturn:
· 137 new store openings, with the total square feet of selling space increasing 46% to 34.5 million ft.²
· 40% growth in number of employees
· Acquisition of existing locations from Bradlee Stores and Caldor Stores as an entry strategy into new markets
· New market entry into major metropolitan areas such as Houston, Phoenix, Boston, Los Angeles etc.

Going on the offensive, however, is not for everyone. While the success stories of pursuing growth during downturns appear seductive, companies with a weak competitive position going into a downturn have little possibility of forming an offense strategy.

A Solid defense: Protecting the core business
Companies facing significant income statement or balance sheet stresses during a downturn will find that its best strategy is to protect its core business by strengthening its defenses. Such a strategy can protect revenue streams and profit margins, or preserve the balance sheet. For example, revenues and margins can be protected with targeted or segmented pricing incentives, strategic sourcing or SGA reduction; balance sheet strength can be preserved by restructuring assets or managing working capital more effectively.
At first glance, defensive actions such as cost-cutting might sound like weaker strategic alternatives compared to offensive moves such as acquiring a struggling competitor. However, analysis indicates that a well-executed defense can in fact present an opportunity to clean house in the short term, and prepare the company for potentially significant growth down the road. Operational strategy and cost transformation highlights two priorities a retailer needs to have to ensure a successful defense during a downturn: 1) Be aggressive with cost-transformation initiatives, in order to step ahead of the downturn, 2) Prepare the business to go on the offensive at the end of the recession.
1. Aggressive targeting of costs
To be successful in the short-term and create longer-term strategic advantages, retailers have to look beyond the “low hanging fruit” for cost transformation and develop an all encompassing strategy. Instead of simply targeting headcount or minimizing inventory, retailers should seek a comprehensive set of changes that can drive success both sooner and later.
Finally, aggressiveness also relates to the velocity of action necessary to implement cost-cutting initiatives. Severe economic downturns create a need for long-term realignment in the way retailers do business. The speed with which owners respond determines how fast they emerge from the downturn.
2. A strong defense means preparing to take the offensive
While the short-term objective for CEOs may be to halt the decline in revenue or margins, the best defense prepares the company to go on the offense when the downturn ends. The strategy adopted by the executive team at JCPenney during the 2001 economic downturn is an outstanding example of such an approach.
As shown in Figure 3, JC Penney sputtered into the economic downturn following a history of several years of declining profitability and operating margins at levels below most of its competitors. JCPenney had missed the “retail wave” of the 1990s because of a host of problems, including poor merchandise selection, an unproven marketing message, and a decentralized operating model. Furthermore, management’s lack of faith in its retail assets led it to use the company’s capital to diversify into the drugstore business with the purchase of Eckerd, which became a drag on profits. Under the leadership of a new management team, a five-year turnaround strategy was launched to turn the ship. The early initiatives were classic defensive moves: staff reductions, the closing of unprofitable stores, the introduction of more effective inventory management, and the eventual sale of non-core assets, such as Eckerd.
Figure 3. JC Penney’s Defense Strategy Led To A Remarkable Turnaround
However, JC Penney’s defensive strategy also focused on the creation of long-term strategic advantages that would eventually enable the company to go on the offensive. The company invested in a new distribution system to decrease long-term transportation costs in the supply chain, a costly move but one that was critical to its long-term growth. After almost 100 years of decentralized store management, JC Penney transformed itself into a centralized company that included a unified marketing message, more targeted merchandising, updated technology, new store layouts and improved store operations. All these initiatives, coupled with a renewed focus on consumer preferences led to a remarkable transformation in the years following the recession.
The lesson for retailers who choose the defensive option for withstanding an economic downturn is crucial: Be aggressive with the turnaround plan, but also ensure that any plan for remaining on the defensive includes details for switching strategies and going on the offensive once the downturn shows signs of coming to an end.
Putting the plan in place
There are significant opportunities to improve competitive position during a downturn, regardless of the strategy chosen. On the one hand, companies that go on the offensive can either continue to follow their existing growth strategy or leverage their strong competitive positions to adopt even more aggressive strategies, such as acquiring weaker competitors at a discount. On the other hand, an aggressive, well-executed turnaround plan can create a sustainable advantage for a company and potentially position it to outperform even its stronger competitors by the end of the downturn.
No one knows how deep and long the current recession will be. Competitors could fail, creating unforeseen opportunities, consumer confidence could sink even further, or the balance sheet could be in worse state than previously thought. Retailers are hearing about the choices and challenges of this environment from every direction—family, friends, lenders, investors, the media and others. Meeting these challenges requires any retailer to answer this important question: Do I choose to receive the ball and start with the offense or do I kick off and put my defense on the field?

Source: Ivey Business Journal, CBCG and ATK

Monday, March 9, 2009

Marketing Strategy Rules to Improve Effectiveness of Your Campaigns

A good marketing technique is one part of the business that is absolutely essential to its success. In fact, the ability to properly market a product or service is actually more important than the product itself. Even an inferior product can be a financial success if marketed properly.

Regardless of the nature of your business, the managing of the marketing function will demand more creativity and more astute judgment than any other single phase of the business. The end purpose of all the activity – e.g. inventory accumulation and production – is the accomplishment of those exchange transactions called “sales.” A smart entrepreneur designs the firm’s organizational structure so as to give the marketing component its deserved prominence. Below are some rules to increase the effectiveness of your marketing strategies.

Consider the "80/20” rule
Do you know that but 80% of your marketing efforts are often spent on the customers or clients yield­ing only 20% of the annual revenues? A practical rule of thumb that you can apply to your marketing planning is the eighty-twenty principle. Look at your client list and identify those customers that were taking up all of your time and not producing results. Some of your prospects may recognize their need or problem and understand that you have a solution, but are not ready or able to pay you. Find customers who will pay you to meet their needs or solve their business problem. Shift your focus to the more productive clients and less time-consuming with long-term growth potential.

Get close to the customer
In today's marketplace, getting close means treating customers and clients (and in certain cases, even vendors) as if they truly are your strategic part­ners and you truly care about them and their employees. It is important to try to satisfy them with the right products and services, supported by the right promotion and available at the right time and location. Customers can easily detect indifference and insincerity, and they simply will not tolerate it. Long-term client and customer loyalty is a long-term challenge that you must earn every day and with every transaction. Building customer loyalty is particularly difficult for e-commerce businesses, where competitors are but a mouse click away. Small business, in order to compete with big conglomerates, should strive to establish a culture of customer service that aims to delight the customers.

Work smarter
Often the most effective marketing strategy or campaign is not necessarily the most expensive or the most complex. Traditional businesses – from the emerging growth companies to the industrial giants -- are getting better results by focusing on simplification. Simplification is achieved by reducing unnecessary product and service lines, outsourcing post-sale functions such as training and support, cutting back on trade promotions, easing up on coupons, trimming new product launches, spinning off marginal brands, and using old-fashioned face-to-face meetings for maintaining relation­ships with clients and customers.

Take advantage of advancements in technology
More and more firms are setting up web sites and learning how to use the Internet as a marketing tool. The Internet has allowed even small entrepreneurs to reach a much wider market, providing information about the company and serving customers’ needs 24 hours a day, 7 days a week. Some traditional companies use the Internet as a powerful complementary marketing tool, while some small businesses start directly on the Internet.

Reach out to the global markets
The World Wide Web has allowed every e-commerce web site to make its offerings globally accessible. Small businesses therefore need to expand their marketing and sales efforts beyond the domestic markets. Take the time to learn the challenges of doing business overseas and how to serve foreign customers well. Many small and growing companies that have ventured abroad as pioneers of doing business in the global village have discovered lucrative and receptive new markets. Remember, if your business is not yet global, then you are missing the opportunity – and the point – of conducting business on the Internet.

Keep your eyes open
A growing small business needs to constantly have their eyes and ears open to emerging trends in their markets, technological develop­ments, and steps taken by their competitors. To keep you informed, closely monitor the attitudes of your employees and the opinions of your "stakeholders" such as vendors, customers, staff, landlords, lenders, directors, and stockholders. Successful entrepreneurs are focused 24 hours a day, seven days a week, on how to get new customers and clients as well as how to keep existing clients happy.

Take care of existing clients, while getting new ones
While small businesses need to constantly capture new customers, the priority should be continue pleasing the existing customer base. Companies that fail to nurture their customer base ultimately fails. Your ability to attract new customers will be limited and eventually impossible if you can't hold on to, and delight your existing customers and clients. It costs twice as much to get new clients rather than maintaining your customer base. Remember, one of the keys to marketing and growth is getting more business from existing clients and customers.

Prioritize your relationship with customers
This old adage is also applicable to marketing and customer service. Too often growing companies’ focus on the customers only, not on where the customers come from. The sources of client and customer referrals are relationships that must be coveted and maintained just as effectively as direct client and customer relationships. This is particularly true on the Internet, where it is important to build, enhance and maintain relationships that direct traffic to your site, by reciprocating wherever possible and refining the relationships as they evolve.

Think outside the box
The traditional solutions to sales and marketing problems yield traditional results. Putting your company on a rapid growth track means being willing to break through old paradigms, engage in street fighting with your competi­tion, and approach marketing and promotion with fresh ideas and approaches. For example, instead of focusing on lowering prices to meet the competition, retool your strategy around adding value and enhancing the customer's experience. Nordstrom's strategy of focus­ing on the quality of the customer's experience and not on the price is very effective. The old adage "Quality is remembered long after price is forgotten" is true in many types of industries and can be a much more profitable strategy in the long run.

Marketing is as much about perception as it is about reality
Marketing is the art and science of moving the image of your business to the forefront of a prospect’s mind. In the mind of the customer, a product or service has an assured baseline level of quality. Hence, small businesses need to emphasize the intangible and often elusive “value added.” The task of the marketing plan, therefore, is to advance the image of your product – preferably one that emphasizes customer benefits and your “distinctive competency.” Entrepreneurs must strive to build brand image and loyalty as well as establish market leadership. In several instances, market leadership and consistency in the customer's experience can often triumph over quality. For example, the market leadership and world­wide consistency of McDonald's keeps sales growing, even if its hamburgers are not the best on the planet.

Remain focused on your core products
Most success­ful companies have stayed focused on a particular product or service category, even if it meant the sacrifice of ancillary sales or the loss of certain customers. For example, when you think about Blockbuster, you think about video rentals. Over the years, Blockbuster has also inched its way into video game rentals and a limited line of candy and merchandise, but the focus has remained on video rental. The key point is that Blockbuster could have tried to sell other products and services to the "captured customer" who spends 15 or 20 minutes choosing a video in its stores, but it had the discipline to stay focused on its core business, which has propelled its growth worldwide.


Tough Times Call For Bright, New Ideas

It's a scary time to own a business, and the knee-jerk reaction may be to just keep chugging along and wait out the financial storm. But that's a risky decision.
This recession is expected to be longer, deeper and deadlier for businesses than any this nation has seen in decades.

The savviest entrepreneurs right now aren't hunkering down. They're rethinking their business models and hunting for new strategies based on the assumption that consumer spending won't be rebounding to prerecession levels and that the types of products and services people want will be much different from before.

For a business owner, this can mean finding new sales channels, trying new marketing tactics and promotions, forming strategic partnerships and introducing new products that appeal to frugal shoppers. "Unfortunately, bad news has this huge ability to paralyze people," says Victor Cheng, a San Francisco business consultant. "I think it is very important for a small-business owner to be fast and nimble" right now. He suggests businesses do a hard evaluation of all segments of their businesses and focus in only on the ones that seem to be faring well in this economy.

New Outlets
Many businesses have already started making changes big and small, sometimes with benefits they didn't expect.

Stone Hearth Pizza, an organic-pizza chain with three small restaurants in the Boston suburbs, considered opening a fourth restaurant last fall. But founders Chris Robbins and Jonathan Schwarz were then approached by natural-foods grocery chain Whole Foods Market about selling prepackaged pizzas in the stores' refrigerated-foods section. After evaluating the idea, the founders decided that starting a wholesale channel would diversify their business at a time when consumers are dining at home more because of the weak economy. Sales at Stone Hearth's restaurants have fallen about 6% to 7% since early December, but grocery-store sales nationwide are increasing, Mr. Robbins says.

Later this month, Stone Hearth will begin selling its pizzas in 26 Whole Foods stores across New England. The company is also reaching out to other grocery-store chains and major commercial food-services providers in hopes of expanding its wholesale channel.
What's more, the founders stumbled across another benefit to selling wholesale: It's much cheaper to prepare and package pizzas from a commissary kitchen than it is to run a full restaurant, hiring wait staff and leasing the space. "We'll be able to do significant volumes with one shift, 9 to 5, Monday through Friday," says Mr. Robbins.

Expanding Services
For other entrepreneurs, now is a good time to focus on better serving loyal customers and offering new services to make them even more loyal.

Heather Becker, owner of the Chicago Conservation Center, which restores artwork and antique furniture for private collectors, corporations and small museums, recently launched a free email newsletter with tips and information about conserving artwork. She sends it to about 20,000 previous customers every other month.
She is also promoting free in-home consultations for area residents with questions about conserving their collections, and will provide advice to collectors who email photos. She recently leased a 20,000-square-foot building so she can rent out storage space to art collectors -- something several collectors have inquired about in the past.

Ms. Becker hopes that expanding consulting and educational services will garner more trust and appreciation among her customers, leading to new revenue streams as she shows how passionate and knowledgeable she is about art preservation. She has also been giving lectures on art preservation. "If clients really perceive you as a resource for knowledge, I think they can more rely on you when they really need help with something," she says.

Hitting a Wider Audience
Some small businesses are coming up with lower-priced options and forming strategic partnerships with other businesses that can help their own.

Parties That Cook, a San Francisco company that hosts cooking parties as corporate team-building events, typically sells packages for $75 to $115 per person -- ranging from appetizer cooking classes to an "Iron Chef" type of competition where employee teams are judged on concoctions they prepare. But more companies are slashing their events budgets this year, and sales fell 50% in January from the previous year.

Chief Executive Bibby Gignilliat and her team recently introduced a new offering: For $45 per person, companies can bring employees for a cooking demonstration rather than having employees fix dishes themselves.

The company also began partnering with other food businesses in the Bay Area, including an urban winery and a sustainable-agriculture organization, and in coming weeks is hosting an array of cooking classes for the general public. Though these don't generate as much money as corporate events, Ms. Gignilliat feels they're more marketable right now. "We're trying to get into budgets that aren't going to be eliminated in this economy."

Source: Kelly K. Spors, Wall Street Journal

Twitter- Is it right for my retail business?

As retailers, we're time starved on a daily basis. Yet we know we have to find and make the time to do marketing for our business. In today's challenging retail market place, the biggest marekting buzz for businesses of all size is to use social media and social networking as a way to market a business.

Somewhere, between the boxes and the ordering, we have heard that SM can help us improve the marketing reach and help build a loyal community for our business. So how can we manage to find time we need to participate in social networking for our businesses?

Twitter is one of the social networking sites that can help you achieve your business and marketing goals. It's a type of micro blog- no need to write long winded stories here-- Twitter is all about short bursts of characters - 140 to be exact (perfect for busy retailers!) The key to success with Twitter is learning how to manage the time you spend on the site wisely to help you maximze the results for your business.

There are many applications that are available today to help you maximize your twitter experience- and thus your brand exposure - take a look at this great article by a twitter expert @problogger. (If you're on twitter make sure to follow @problogger too!)

10 Twitter Tools that Help You Work Smarter
Posted using

Hope it helps you understand some of the possibilities that can help you maximize your Twitter experience.
And by all means, if you're on twitter-- let's follow each other--CBCG can be found at @retailhelper

Sunday, March 8, 2009

Postage Costs are Going Up - Do You Know What That Means?

All businesses- retail and otherwise are tightening their belts and looking to save money at every turn during this challenging economy-
As postage costs go up March 11- have you thought about what that means for your direct mail costs? Should you be looking to make some shifts in how you market your business?

Here's a great article on that subject by one of my favorite small business advocates- Anita Campbell. Enjoy-- and think- about what you might need to do differently for your business in the coming year.

Postage Costs are Going Up - Do You Know What That Means?