As we enter the new year, it is important for business owners to select a single, overarching objective. Will your focus be sustainable growth? Improving profitability? Preparing for an exit strategy? Your objective will determine your approach to how you grow and evolve your business — and how you budget. What will be your focus in 2019? Answer these 10 questions to help you decide.
What is your market share? Is it growing?
In 2017, Amazon, the largest e-commerce company in the world, was responsible for nearly half of all U.S. e-commerce sales. In 2018, Amazon was responsible for more than 5 percent of all retail sales in the United States. And, heading into 2019, JP Morgan expects rapid growth for Amazon early in the first quarter.
Why should this matter to you? Well, market leaders — or businesses with market shares above 40 percent — earn an average ROI three times greater than those with shares under 10 percent, according to the Harvard Business Review. Companies have to continually invest to achieve significant growth and capture a greater share of the market. The good news is that once you have secured a top spot within your market, as Amazon has done, it requires less investment to attain new customers.
Are other companies entering your market? Is there a market disruption on the horizon?
Do you know how difficult it is for new companies to enter your market — or existing companies to intrude? In recent years, several industries have been disrupted. Think about the roles Uber and Airbnb have played in the taxi and hotel industries, respectively. What can you do to build a higher barrier to entry? Building a strong brand identity and customer loyalty are key in making it more challenging for new or emerging businesses to compete in your market.
How loyal are your customers? Are you measuring customer satisfaction and retention rates?
Do you know how happy your customers are? Do your existing customers have plans to stay with your company? What percentage of your revenue can you undoubtedly count on in 2019? Recruiting new customers costs at least five times as much as retaining current customers. Despite the importance of customer retention, less than one-third of business executives consider it a priority. Customer satisfaction is only the first step in building customer loyalty, but it’s the truest measure for predicting customer behavior.
What makes you different?
What makes you different from your competitors? Are your customers willing to pay a premium to choose you over others for products and services? In order to run a successful business, you must be able to articulate the benefits you provide to your market that your competitors do not. Is your product design the most advanced in the industry? Do you go above and beyond for your customers? Determine that “special something” that allows you to outperform competitors and that you consider the strongest basis for profitability in the market.
How diversified are your customers?
Businesses that have a small, concentrated customer base have all of their eggs in one basket. When that basket get upended, it is all over. When looking to expand your company’s customer base, consider many degrees of diversity — geography, industry, demography. In general, companies pride themselves on the ability to establish long-term relationships with clients. This can be an important first-step for getting a company off the ground, but from that moment on, diversifying clientele must be your focus. According to a three-year study conducted by the Business Development Bank of Canada, seven out of the 10 diversified firms selected achieved high revenue and profit growth, compared to just two out of 10 firms with “customer concentration” issues.
Do prospective customers know who you are?
How familiar are potential customers with your brand? What percentage of your target audience even knows you exist? Far too often a brand’s view of the market or the competition can become distorted. It’s important to adopt an objective view of your brand to avoid incorrect conclusions or false beliefs about how familiar or unfamiliar your target audience may be with your brand. There are several reasons why your audience may not know who you are but ultimately it comes down to failing to present a clear and consistent message through your marketing efforts. Repetition of your message is key to building awareness of your business.
Do you have a sales process that is methodical and can be duplicated across the organization — and does it produce results?
How knowledgeable about your company’s sales process is your team? Do they clearly understand their role and responsibilities? Buyer behavior is evolving constantly, so it is as important as ever to put a sales process in place that allows your business to recognize needed improvements and quickly adapt to those changes. Sales processes vary from industry to industry and organization to organization, but there are many staples of an effective, systematic selling process that business leaders in every industry need to consider — clear roles and responsibilities and a strong understanding of the customer journey, for example. A methodical sales process allows team members to take advantage of opportunities in the pipeline as quickly and efficiently as possible to produce results.
Do you have a marketing plan to achieve your objectives and does it account for changing buyer behavior?
How effectively does your marketing plan take into consideration your buyer’s journey? How easily can your marketing plan be adjusted to adapt to changing buyer behavior? Business-to-business (B2B) buyers are increasingly self-directed in their research, according to Google, which found that 68 percent of B2B buyers prefer to research online on their own before making a purchasing decision. Naturally, business-to-consumer (B2C) buying habits are increasingly influencing the B2B buyer journey. Similar to B2C shoppers, B2B buyers appreciate personalization, humanization and transparency in the companies with whom they decide to do business.
What new product and service innovations are you launching in 2019 to meet changing customer demands?
What adjustments are being made to your company’s existing products and services to adapt to evolving buyer behavior? What new products and services will you unveil in the new year to meet your customers’ demands? According to Google, the new business buyer is “more curious, demanding and impatient than ever before.” Your products and service offerings must evolve alongside their habits. Abercrombie & Fitch Co. now allows its customers to make purchases via Venmo. Domino’s Pizza offers 10 different ways to order a pizza online. What is your business doing to keep up?
Did you meet your 2018 objectives?
If you answered, “no,” what steps will you take this year to make sure you meet them? Partnering with an agency, such as GREENCREST, with a keen understanding of consumer behavior, as well as the know-how to quickly and effectively adapt to changing trends, is a great option for businesses who are determined to meet their 2019 goals.
Don’t fall short of your 2019 goals. Let’s get started. Contact GREENCREST today.