Whether 2020 was a great year for you or a tough one, we find ourselves in a new year with opportunities ahead and I’m sure you’re looking to make the most out of it. This article will help you make this year count; not just to make up for 2020, but to maximise growth and surpass your competition. We’re going to be covering a little-known model which has enabled us to increase client revenues by triple digits, so be sure to read to the end and learn how to apply this model to your business.
So diving right in, first let’s talk about where we’re at...
Grow recently conducted a survey of business owners and CEOs of companies big and small. In the survey we asked if they felt less threatened by their competition now than they did before covid and a large number said yes. This is strongly linked to what’s known as
“Share of Voice”, whereby the big players tend to have a larger share of voice in the market and therefore attract a larger share of the market. The impacts of COVID caused a lot of businesses to cut back on their marketing, and subsequently their share of voice declined. Effectively this levelled the playing field, and has opened up huge opportunities for businesses big and small.
Conversely, those who maintained or increased their marketing reaped the benefits, because of course their share of voice didn’t decline. In fact, it likely increased as their competitors' share of voice fell away. The survey revealed that
73% of those who either maintained or increased their marketing expenditure in 2020, either saw an increase in their revenue or maintained it despite the prevailing headwinds. At the same time, the majority of those who decreased their marketing expenditure, experienced a loss in revenue.
But it’s not just about short-term returns. Share of Voice has been shown to have a substantial impact on long-term growth and profit as well. At an IPA seminar in 2008, three advertising data experts made a model from reports on hundreds of real companies which had made budget cuts to advertising and marketing. They discovered that
companies that cut their marketing budgets by 50% took three years to return to their previous profit levels. Those who slashed the marketing budget by 100% took a full five years to recover.
They clearly showed how chopping down a budget might improve cash flow initially, but it substantially hits profit over the long term.
Keep in mind also that
it takes 1 year on average for a cut in marketing to start having an impact upon profits. So by the time the consequences are felt, it’s too late.
As you can see in the data breakdown above, experts found that the companies who made cuts to advertising and marketing reported improvements to cash flow in the short term, but in the longer term they actually experienced a reduction in profits.
The reason behind this is actually fairly straightforward.
When a company cuts marketing budgets, it gives up its share of voice in the market. When share of voice shrinks, it creates space for competitors to take up more space and begin persuading the target market to choose them instead.
Furthermore, share of voice is strongly related to share of market. Although again, the experts saw a 1-year time lag between a reduction in share of voice, and a decline in share of market, it ultimately is share of market that dictates a company’s profits.
Conversely however, the data also showed that companies that increased share of voice were able to grow their share of market - especially when their competitors were cutting back on their share of voice. These companies subsequently came out in a stronger position against their competitors.
So be forewarned: Cutting your share of voice will have a substantial impact on profitability in future years, and you won’t know until it’s too late.
So what happens if you and your competition all cut back on your marketing and share of voice is equally low? It means that the playing field has been levelled. It’s now a matter of first-player advantage. The one to get out there and capture the market before everyone else, will eat up the share of voice and ultimately the share of market. It’s a more level playing field and thus the perfect time to seize this opportunity.
It’s time to shout the loudest and capture the market
There are of course multiple channels out there that should be part of your customer journey at different stages. Below is a visual representation of what the Buyer’s Journey looks like.
And here’s an example of where the individual channels usually come into play within the Buyer’s Journey:
While there are a large number of channels, you don’t need to use all of them. You should select the ones that are most suitable for your business based on your target audience and where they spend their time. However, the point is to ensure you cover their full psychological buying journey from Awareness to Advocacy. If you do this, you will command their entire experience, create familiarity and trust, and be far more likely to win them, and turn them into a lifelong customer. Focusing on one channel alone will not help you achieve that. You may be present in a Google Search, but if someone else has done the groundwork to build familiarity they are more likely to win the business. An omnichannel approach is required to truly capture and influence the market.
Taking things a step further: It’s not just the channels, but what you say on them that matters. For example, the same messaging will not work for someone who is actively looking for what you have to offer, and someone who isn’t. You would never ask for marriage on the first date, would you? It’s important that you choose wisely what to say, when, and where to say it.
A well-thought-out communication strategy that is much stronger than your competitors’ will get you further ahead in the game. If you’re not sure of how to make this work for you, reach out to us and we can help you build a strategy that gives you the greatest chance for success.
Coming to the secret... Don’t just focus on marketing, you need to go beyond it to maximise growth
At Grow, we help businesses achieve growth through
The Grow Trifecta model that focuses on three key areas - marketing, sales and retention - all of which need to work in tandem to maximise growth.
Simply put, if marketing is working well, but your sales conversion rate is low, you’d have a low return on investment from your marketing spend. Alternatively, let’s say both marketing and sales are working well but you’re unable to retain your clients/customers, then you’d need to spend double the amount of time and money into the first two to sustain the business, let alone grow.
Look at the graphics below to see The Grow Trifecta model explained simply.
˄ Here you see the one-dimensional strategy typically used by a marketing agency or lead generation agency. It utilises only marketing as a tool for customer acquisition.
˄ But in the three-dimensional Grow Trifecta model, we utilise marketing, sales and retention to achieve exponential revenue increases.
˄ Say your business has 20 customers whose average spend is 50,000.
˄ In the traditional model, you might expect them to come back one more time for a second purchase. So for 20 customers, each spending 50,000 twice, you generate 2,000,000.
˄ In the typically-used model, an increase in customers results in a proportional increase in revenue. But your company misses out on the exponential gains.
˄ But in our Grow Trifecta model, a moderate increase in all three areas actually results in exponential revenue growth. You want to boost not only customer acquisition, but average spend, and frequency as well, in order to achieve maximum returns.
Let’s apply it to YOUR business
So are you ready to see an uptick in revenues by applying The Grow Trifecta to your own business? Do you want to move away from old-school methods which focus only on customer acquisition, and start implementing all three parts of the Trifecta - marketing, sales, and vitally - retention?
For this, first of all, you need to have a strategy in place - to meet ambitious goals, you need an ambitious plan of action. Does your company have a team of experts to prepare a strong strategy?
Here at Grow, our team does just that - build and execute ambitious strategies. In fact, we have a guarantee on KPIs at the end of the strategy if you plan to execute your strategy with us. We work with marketing managers of companies as an extension of the team.
In today’s dog eat dog business world, where competition is often tough in saturated markets, we need more than the simple strategies of yesterday to break plateaus and maximise growth and profitability. If you want to know more about how we can help you grow, visit:
https://www.grow.ae/growth-strategy.
