The 6 Key Marketing Questions a Successful Business Must Be Able to Answer
By Antony Young
Early this year I was invited to be an assessor for the Electra Kapiti and Horowhenua Business awards (BKH). They run one of, if not the most rigorous business awards evaluation and judging criteria in the country. The BKH awards employ the Baldrige System as it’s framework for evaluating business excellence. If you are, like I was, a little cynical of business awards then you might be more willing buy in knowing that every annual winner in the awards 25 year history is still in business today. Not a bad feat given the high failure rate of New Zealand businesses.
The Harvard Business Review claims the Malcolm Baldrige National Quality Award system of which the BKH awards are based, “has become the most important catalyst for transforming American business.” An extensive study in the US revealed that Baldrige winners in the small and medium business category outperformed benchmark companies by an average of 63%.
There are seven criteria that Baldrige uses to evaluate a business’ overall performance:
Strategy & planning
Customer and marketing
Information, knowledge & performance Improvement
Customer and Marketing is an area I noticed that many companies struggle with.
There are six key questions that we evaluate every business on. Why not spend 20 minutes to evaluate and score yourself between 0 and 5 on these six questions? It works best, if you’re brutally honest!
1. What is the market need that you are aiming to satisfy? How did you identify that need?
The key here is need. Plenty of entrepreneurs start businesses on finding an unmet niche in the market. Need has to mean are people willing to buy it or choose you over the competition or in some cases a cheaper product or service.
Do you do any customer research or seek feedback consistently? Are you actually capturing that and adjusting your business to it or does it just stay in your head?
Are there any trends or outside factors that are changing market conditions? Are you making adjustments? When was the last time you properly reviewed your customer strategy?
2. How do you generate new leads?
Periods of being flat tack, followed by down times are a real drain on profitability. Once a business slows, it’s very difficult to suddenly turn on the marketing tap. Building a consistent pipeline of new customers needs a consistent presence and a marketing system in place.
I have a general rule. Spend when times are good. Warm the market up to your business, rather than create a fire sale.
3. How do you convert these leads to new customers?
Obviously, a good sales person is worth their weight in gold. But the Internet has changed how customers buy. Today, a new car buyer today on average only physically visits two dealerships before purchasing a vehicle. Buyers are doing most of their homework on your company online.
Social media is playing a bigger role in influencing purchasing. 72% of millennials say they have made fashion, beauty or style-related purchases after seeing something on Instagram.
4. How do you keep existing customers coming back?
Of course, servicing your existing customers well and delivering a quality product gets them back, but customer loyalty from Shampoo to SUV’s are dropping to unprecedented levels. That’s because there are just more new options available to customers every day and more marketing noise out there to sway even very good customers away.
Do you have a marketing plan for existing and past customers?
One of the best ways to keep in touch is through social media. Keeping in touch with your customers with news and helpful info through Facebook, Instagram and LinkedIn is an easy win. [See 6 mistakes you can make on Facebook.]
5. How do you know what your customers think?
How many times have you really understood why a client really has left? What are the barriers for new customers? How consistent are you getting feedback and are you tracking it? Or are you wrapped up in meetings, staff and operational issues. How can you be too busy to know what your customers are thinking?
6. What makes your organisation's services/products special and distinctive, and how does this give you a competitive advantage?
Every day a customer is evaluating your product or service against the competition. Are you doing the same?
Consistently reviewing how your business performs in these areas is what’s really behind excellent performing companies.
If you’re scoring 4 and 5’s, then you are in the top 10-15% of all businesses. Well done. If you’re falling short, make a plan!
Antony Young is a co-founder and marketing barista for The Digital Café, a marketing agency that works with SMEs. They have offices in Wellington and Auckland. Before that, he spent 20 years working in New York, London and Asia for global advertising companies Saatchi & Saatchi and ZenithOptimedia.