2016 Budget ROI – Are you leaving out the most critical investment?
Warren Buffet’s buying criteria for stock and/or companies has always been that they have “strong competitive advantage” and “a solid management team”, yet few mid-market companies have any disciplined process in place to ensure they have and maintain leading differentiation. In the last few months I have talked to over 100 CEOs of mid-market companies and less than 2% report having any strategy in place to identify, support and manage continued competitive advantage. This omission is impacting bottom line results each year it is neglected.
Additionally, over 85% report being commoditized and/or under price pressure most of the time when securing new business. Without a value proposition built on competitive advantages, your company is prey to your competition if they simply dangle a lower price in front of your existing customers.
If you are now planning 2016 budgets, are you allocating resources for identifying your marketing and sales competitive advantage message with related operational support?
As you prepare 2016 budgets, don’t make these three mistakes:
- Don’t underestimate the power of a clearly defined value proposition provided to sales from management. Salespeople don’t usually have access to internal metrics that support differentiators. For example, if you are warehousing inventory so your customers don’t have to, is the management team providing the value of that expense with sales people so they can build a value proposition to the customer? This may take some investment in voice of the customer research, internal metrics analyses and training… so budget for it!
- Don’t let your defined competitive advantages be drowned out in sales and marketing messages with clichés and marketing speak. Budget for the redesign of sales/marketing mediums that are loaded with clichéd language. We examine scores of websites each week on our clients and their competitors. We see sites that read like verbose legal briefs and are just as boring. First, you must know what matters to customers and how to effectively articulate it. Surveys show salespeople are not pleased with their own company’s website. It does not support their efforts.
- Make sure all your customer facing and sales people share a consistent message that is operationally supported. If internally there is no agreement, how can the outside marketplace know what you are about? Once you have identified the relevant competitive advantage message, budget for competitive advantage sales training and operational support. If “on time delivery” is most coveted by your customers, make sure your internal operation supports superior performance in that area and all customer facing employees know how to tout it as an advantage.
Very few companies master this alignment; but of those who do, nearly 90% have reported increases in sales and/or margins with performance improvements. Budgeting for this discipline provides your company a significant ROI.