10 Lessons Learned the Easy Way — Vicariously

Recently, I’ve had the opportunity to work with five struggling companies and to review the files of a dozen others.  These companies are in serious financial distress and there are about 10 recurring pitfalls that all good mature market experts need to avoid.  

                Here are the lessons:

1.            Invest in sales and marketing – treat sales and marketing expenditures as an investment.  These expenditures are not costs; they are investments that yield returns.  Many of the struggling companies simply did not invest enough in sales and marketing.

2.            Insist on C-suite participation – if you are not in the C-suite or do not have participation from someone who is, watch out.  Sales and marketing was often way down on the list of priorities for top management in these companies.  It surprises me how many times top management didn’t really know what was going on in sales and marketing and consequently had no feel for their prospective customers.

3.            Befriend your CFO – she is the one watching the store and controlling the purse strings.  You want to be sure she knows everything she should know.

4.            Know your numbers – make a list of key indicators, statistics on responses to your sales and marketing program you should watch.   Don’t try to boil it down to four or five.  That is great management theory but the reality is that inspiring retirees to act is fairly complicated stuff and doesn’t often fit in with the four to five key indicators management dreams are made of.

Pay particular attention to any that are down.  Question why.  Is it a trend?  Not sure?  Assume it is and fix it.  Many of the ‘chief marketing officers’ of these distressed companies seemed surprised to be in such sad shape.  Disappointed, yes.  Frustrated, of course.  Surprised, no excuse.

5.            Innovate – if you are doing things the same way you did them 18 months ago, it is time to take a fresh look and adopt a fresh perspective.  Many of these managers were doing things the same way they always did because “they worked.”  I’d argue that retirees experience more change faster than any other age group, save children under the age of four.  You need to keep up with them.

6.            Don’t rest on your laurels, a little paranoia goes a long way – in hindsight, many people in these companies realize that they ignored the telltale signs that something was rotten in the state of Denmark.  Somebody is out to get you – your competitors who covet your customers and your customers who would rather keep their money ‘thank you very much’ than give it to you.

7.            More revenue cures all ills – you would be surprised at how many management teams try to reduce their way to financial success.  While cost control and investing your sales and marketing dollars wisely are requirements, don’t ever forget that more revenue can make everything better.

8.            Make getting in the helicopter a priority – many leaders in these distressed businesses couldn’t see the forest for the trees or couldn’t see the trees for the forest.  Don’t let this happen.  Find time in your schedule every week to fly your helicopter up and down.  You want to be considering potential courses of action from at least four perspectives:  narrowly, broadly, within short time frames, and over the distant horizon.  Balancing these perspectives leads to short and long term success.  Ignore any at your peril.

9.            Adhere to Zyman’s Rule – Sergio Zyman of CocaCola (and, yes, New Coke) fame, instructs us that if your sales and marketing program isn’t impelling people to act now it is very unlikely to impel them to act in the future.  Very few sales and marketing programs have a cumulative impact that yields sales somewhere down the road.  If it isn’t working now, it probably isn’t going to get any better with age.  The ranks of these distressed businesses are filled with people who are still waiting for their sales and marketing programs to “kick in.”

10.          Be nimble – few of these managers of distressed businesses had prepared to change course if something didn’t work.  They simply were unprepared to shift resources, strategy or direction.  As marketing leaders, we should focus as much on being prepared to respond if we need to shift as we do on executing the current plan.

This may sound a bit preachy.  If so, I apologize but I don’t want to be working to find a financial solution for your company any time soon.

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