Slow Growth? Is Your Marketing – or Your Biz Plan – to Blame?
The Sprocket Report
All the hoopla surrounding chicken sandwiches in August got us thinking about business strategy. Entrepreneurs often underestimate the relationship between what they are offering and how they are marketing it, a mistake which can lead to disappointment.
Which side are you on in the battle of the chicken sandwiches? If you somehow missed this pop culture news, Popeyes Chicken introduced their new sandwich and wound up sparring on Twitter with Wendy’s about it. The new sandwich was intended to compete with Chick-Fil-A, which already enjoys undying loyalty with some chicken-sandwich-eaters. The mash-up of marketing and market share is a great discussion starter for all business folk.
Did marketing double Popeyes’ store traffic? Yes, certainly – we can all agree on that. However, keep in mind that even though Popeyes did have a sizeable advertising spend, the incredible viral boost they received was totally unplanned. That’s just how viral works. But before the first tweet, Popeyes already had a solid business plan as a foundation for the marketing team.
When business isn’t growing as expected, a little analysis is in order. Sometimes the marketing strategy needs to be revamped. But sometimes it’s the actual business plan that needs work. Here are some suggestions for analyzing a business’s slow growth:
Expense vs. Profit
Offering a chicken sandwich was a cheap innovation for Popeyes. They already have an effective process to buy and prepare chicken. Some recipe development and a little extra employee training and they’re ready to go. If they had to install new equipment or hire more workers, it might be a different story.
Many wonderful products and services are offered by dedicated entrepreneurs who will never be successful because their expenses simply outweigh their profits. Deep pockets are needed to buy equipment, rent space and pay vendors and labor-intensive businesses are particularly tough because labor costs are high. Marketing can drive sales, but the profit margin may still be too slim.
You can bet that Popeyes researched how much of the market they needed to win from Wendy’s and McDonald’s in order to turn a healthy profit. After all, there are only so many chicken sandwich eaters. Popeyes might divert a few hot dog or hamburger eaters, but they are never going to tap into the vegetarian market.
Even the smallest of small business owners need to conduct the same research. Niche products or services can be incredibly successful and straight-forward to market, but only if the possible profit is big enough to share.
Timing and Interest
Popeyes lucked into some great timing for their Twitter skirmish with Wendy’s. Timing can also work against you. How many times has a TV or film production been shelved when the art imitated real-life violence too closely for comfort? Also, the buying public is just plain fickle. When what was all the rage last week becomes passé this week, a thriving business may find itself struggling.
Yes, it hurts to learn that the service or product about which you are passionate only gets a “meh” from prospective customers. Marketing may be able to help change that perspective, but it only makes sense to go back to the drawing board before spending yourself into a hole.
There will always be marketing agencies that will take your money, regardless of the viability of your business plan. It’s up to the entrepreneur to do the research, create the strategy and set the goals that are specific and appropriate. With that blue print in hand, your marketer will be a more efficient partner in your business’s success.
Sprocket Websites, as our name implies, builds websites and we use social media marketing tools to drive traffic to those websites. Seeing our client partners successfully grow just makes our day, so encouraging strong business plans is important to us. If you have a plan that you’re ready to run with, give us a call. We’d be honored to help! But first, after all this talk about chicken sandwiches, we're going to grab a snack.