Better marketing advice is the key to higher profits

Increased efforts at selling does lead to more sales and higher turnover, but selling more will only take you so far in the quest to increase profits. This is because increased sales usually come with the penalty of reduced margins - to get the volume, you are obliged to discount; with the result that the wheels turn faster, but for less effect.

This is where a good marketing consultant comes in. Better marketing helps you increase sales, and increase margins.

In a nutshell – having a sales mentality allows you to sell a product or service at a price – often very effectively. But a selling mentality very rarely extracts a premium for the value you provide. Good marketing advice helps you charge for this value, and this represents additional net bottom line profit.

Why the right marketing advice increases not only turnover, but profit!

It works because it helps the customer understand and appreciate, not just what you sell, but the value that you provide; and better marketing creates the willingness to pay for this value. 

Marketing is often seen as a big business preoccupation – for companies that have money to spend on advertising. But good marketing is not about advertising and spending money. It’s about presenting your value to the client in the most cost effective and imaginative way; and making money.

But getting to the core of the value you provide, and how best to present this, is a job for a marketing specialist. And most small to medium sized businesses cannot afford the expense of a dedicated marketing department or Marketing Director – choosing instead to focus on sales. Understandable – but this means leaving money on the table.

A good marketing consultant focuses on profit

Successful businesses talk about their ‘brand’ – and they invest a great deal of time and money into their brand. The brand is what the customer buys. And for the right brand, the customer willingly pays a premium. And the brand that you pay an extra few Rand for…translates into bottom line profit.

So why do so many smaller to medium sized businesses miss a marketing trick? I think it’s because so much of what you read about brands doesn’t seem relevant to the ‘real’ business environment.

This is a shame – because good marketing and branding can be applied to any size business, in a straightforward and cost effective manner – to great effect.

The 4 'P's of marketing and how they drive Profit

You’ll probably remember the focus on the 4 ‘P’s in the marketing books; ‘Product, Price, Promotion, Place’ – academic stuff that seems irrelevant to the realities of day to day business.

But even if you don’t remember the 4 ‘P’s, or haven’t made their acquaintance in the first place – allow me some of your time, and I’ll show you how straightforward inexpensive good marketing, translates into increased sales, at better margins – meaning higher Profits.

Product

Product, or service, is of course what you sell.

But is it the whole story? For instance, you may be a printing business that goes out of your way to provide exceptional service to your clients…

or a manufacturer that goes the extra mile in quality…

or indeed any type of business that takes the trouble to be that bit better…

And yet, the extra value you provide often doesn’t seem to be recognised - or at least paid for!

The secret lies in how you present your product. Take McDonalds’ positioning as an affordable family outing – you don’t go for the gastronomic experience – you take the kids there for Ronald McDonald’s ‘free’ toys as a treat. McDonalds understands the family entertainment nature of their product – and you, happily or otherwise, pay a handsome premium for it. Research has shown that ‘even carrots, milk and apple juice tasted better to the kids when they were wrapped in the familiar packaging of the ‘Golden Arches’ – Associated Press. Aug. 6, 2007. Little wonder that their margins are mouthwatering.  

With some analysis, I can help do the same for your business – identify where the uncharged-for premium, i.e. the true value, lies in your product or service. And once we have identified where the true value lies, we consider how to better charge for it…

Price

Only rarely do all four marketing ‘P’s fire in sync; and yet it’s a fundamental principle of marketing theory that they must! Unfortunately most branding experts shy away from the spreadsheets and numbers involved with getting to grips with ‘Price’, and even more practical marketers tend to leave pricing to the finance department. In doing so, they overlook the most powerful ‘P’ in the marketer’s armoury.

Why the most powerful? Because any improvement in price drops straight to the bottom line. Even a 1% improvement in price, can represent more than a 10% increase in operating profits (Michael V Marn and Robert L Roseillo, Harvard Business Review 1992).

How do you arrive at your pricing? Cost, plus a reasonable margin - or what the market can stand?

Promotion

For ‘Promotion’ read ‘advertising’, and all the associated peripherals. Except that you don’t necessarily need to ‘advertise’ to promote your business well - Ebay does well for a business that doesn’t advertise. The point being that ‘Promotion’ has come to mean any method by which you connect with clients, or prospective clients. And a bit of flair and lateral thinking can go a long way. I mentioned earlier about first identifying the true value of your business. Once we’ve done this, ‘Promotion’ is all the ways you communicate this.  

And this starts with your existing customers, if you have the right relationships. For instance, Vida e Caffé have done a great job of getting themselves talked about in all the right ways – with their existing customers being their main ambassadors introducing friends as new customers.

Place

Last, but not least of the traditional marketing ‘P’s, is ‘Place’ – the ‘where and how’ of the way you distribute your product or service.

And even this ‘P’, which may seem the most set in its ways and difficult to change of the marketer’s tools, can yield surprising results with some investigation. Successful, and often huge, businesses have been built by re-looking at the way in which a product or service is distributed to the customer. It’s hard to believe that Amazon.com has only been online since 1996 when Jeff Bezos started distributing books from his garage.  

Opportunities abound for re-looking at product or service delivery in almost any business you care to name; and it doesn’t necessarily mean trading via the internet. For instance, farmers in Queensland, Australia offer ‘work experience’ opportunities, and charge for seasonal labour that they would normally pay for; vets offer home visits - Vets2Home in the UK is so successful that it has been featured on BBC TV - and chefs offer training courses during the winter season. 

My approach

Examining each component of the marketing mix, and fitting it all together is a job for a specialist; and unusually for a marketing consultant, I have experience in ‘Pricing’ consultancy – potentially the most rewarding of all the marketing ‘P’s.

Meanwhile as far as the 4 ‘P’s are concerned, the text books have moved on. The 4 ‘P’s have been replaced by the 7 ‘P’s – inflation is not limited to the economy! The additional ‘P’s are ‘People’ (your people – everything they say and do is part of your marketing), ‘Process’ (the hundreds of systems that you use – everything from producing a quote, to managing debtors), and ‘Place’ (the physical evidence of your business – offices, vehicles, uniforms etc.) 

So often, one or more of the ‘P’s is out of kilter – i.e. delivery is at odds with the promise, pricing is at odds with the brand’s image etc. – and the effect is like an engine misfiring on one or more of its cylinders.

My background

My career spans three decades working in Finance, Advertising and Marketing; the building blocks of business. I started out by dealing financial futures and commodity trading; then for a decade worked as a photographer for advertising agencies and their blue chip clients like Coca Cola creating images for their brands; and more recently consulted to large corporations in branding, marketing and pricing.

My consultancy experience includes the market leaders in their fields: The Stock Exchange, NedBank, Italtile, Karen Beef and Denny Mushrooms.

And I now apply the same skills and experience not only to Corporates, but also to assist smaller and medium sized businesses become more profitable through every aspect of better marketing.
I have a Masters in Business Administration, and before offering advice, I make it my business to understand every relevant aspect of your business.

Developing and promoting your ‘Unique Selling Proposition’

The most tried and tested principle in marketing – one that not only works, but makes all the difference, is that of finding a ‘Unique Selling Proposition’ (USP) for a business – something at which the business excels, and which in turn defines the business.

In a competitive market, it is increasingly difficult to stand out – making the development and promotion of your USP as relevant as when the concept was first developed in the 1960’s; and used by all the most successful businesses ever since.  

One of my key tasks is helping develop and promote your USP.

And doing this happens to be my USP. How so?

As a result of experience ranging from Futures Trading to Branding and Marketing consulting, with advertising photography along the way, I’ve developed a business approach witha creative mindset. Meaning that as I consider every aspect of your business, I often spot your underused competitive advantages and help define your USP, whether it lies in pricing, distribution, promotion, or the product itself.   

With your USP polished and refined, I develop a practical plan, along with its budgetary and financial implications – and see it through to the creation of impactful and relevant marketing material.

Resulting in increased turnover at better margins.

Contact me

I’m based in Cape Town but am available to assist companies throughout South Africa.

If you want to increase sales, and improve margins, contact me for an initial discussion. I’ll give a straightforward appraisal of what I can and can’t do for your business - and hopefully show what a little fresh insight can achieve.

Mike Hughes
079 493 0146