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Friday, April 8, 2005
YOUR BUSINESS: David Vazdauskas
A look back may give your company a better future
Copyright © 2005 Blethen Maine Newspapers Inc. | ||||||
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Also on this page: About the Author | |||||
Sometimes, today's problems have roots that go back further than we think. When your company first sees signs of trouble - for example, declining sales - the first instinct is to look at current marketing programs. Maybe our advertising stinks, you wonder - or maybe our brochure or Web site design is getting tired. And so you go through the time and expense of creating a new ad campaign or a new graphic design only to discover that it hasn't helped sales at all. What to do? The answer may be to look beyond your current marketing activities and focus instead on decisions and assumptions that were made years ago - perhaps during the very founding of the business. Has your company witnessed years of external change - for example, new technologies, or demographic and cultural shifts - without ever taking a fresh look at the original, basic business strategy that existed before these changes took place? McDonald's, the fast-food giant, is a good example of a company confident enough to rethink its original business model. Its startup strategy called for a burger-centric operation with a single ordering mechanism (the counter) and a single dining option (usually, the parking lot). However, as social norms changed, so, too, did its business strategy. Drive-through ordering recognized our need to speed through the day, and indoor play areas positioned the chain as a welcomed distraction for harried moms. Today, even the once sacrosanct burger often takes a back seat to salads and grilled chicken. Imagine if McDonald's never adjusted its business strategy. Imagine that if instead of rethinking its ordering methods, product selection and store environment, it just kept trying to make a better or cheaper burger. It's unlikely it would have outlasted its competition. Yet, that's how many companies unwittingly look to the future. Their basic product or service is sold in the old way, and only the advertising and brochure change with the times. Sometimes, businesses believe they can't change their core offerings because "it would be inconsistent with our brand." But the strongest brands are ones that can reinvent themselves to accommodate changing conditions, yet still be true to their original brand essence. EBay is a great example of an elastic brand. The company started out as a destination for collectors of all kinds - the world's largest and most efficient yard sale. The brand stood for a community of like-minded shoppers - folks who shared a passion for the hunt and the find - and the bargain. EBay eventually realized that it couldn't grow by focusing only on the collectibles market. It began to embrace the wider concept of a virtual marketplace for all goods - old and new, mundane and bizarre. Some of this change happened organically. Longtime eBay users helped stretch the brand by offering a wider variety of products. EBay, in turn, formalized these categories to accommodate the new product lines. Now, for example, automobiles - not even a speck on the company's radar in its early years - are the fastest growing category on eBay. Your customers may also be telling you to stretch your brand - to revisit your company's original mission and business model. How many times should you say, "We don't sell that," before deciding to offer it? How many times should you hear, "I don't need that," before discontinuing a product or service? More often than not, the companies which are stealing your business are not the ones that look exactly like you. They are competitors who have created new ways of doing business and improved methods of serving customers. And that should be cause for alarm. Old assumptions about price competition may not matter anymore, since your customers may not be as price sensitive as you think. And the old assumptions about what constitutes aggressive marketing (spend more on advertising, promotions and PR) may be quite stale. Take a step back. Way back. Look at the business assumptions that were made when your company was founded - assumptions about consumer preferences and the definition of "value." Are those assumptions still valid? If you were starting your company today, would you do it differently? Has marketing inertia caused you to offer the same products or services, through the same channels, with the same message simply because, well, that's how your company has always done things? You can't erase history, but you sure don't want it to be what's keeping you from growing your business.
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