Do You Understand Your Industry

 

 

Legends of Marketing Series by Gary Hoover

 

Do You Understand Your Industry?

 

I have spent the last several years advising perhaps a thousand entrepreneurs and corporate executives on how to develop their strategies and grow their business.  These enterprises include every size from startups to billion-dollar corporations, every industry from high tech to restaurants, and every location from small town Texas to Malaysia and Mexico.  One of the most common things blocking people’s strategic thinking is a failure to understand their own industry and those industries and companies that bear on the enterprise’s success.

There is no way one can understand the potential of their company or plot a great strategy without understanding their industry and how their company fits in.

The first step is to understand the big picture.  Start with these questions:

  • How big is the industry? This information is readily available in the United States at Census.gov and by simple googling, typing in that question.
  • How fast is the industry growing? (From the same sources)
  • What is the industry trade association? Go deep on their website, which often contain tons of information.  Subscribe to their newsletters and read their publications.  Learn the industry jargon and see what worries or excites industry participants.  Some industries have multiple and state or regional associations.
  • What are the industry trade publications? Most trade magazines also have great websites.  These provide a wealth of information.  Most issue newsletters, often free.
  • What are the key industry trade shows? Attend them!  Talk to everyone.  (I usually talk to the editors of the trade publications, as they know more about industry trends than anyone, and few others bother to talk to them.)

The second step is to understand the industry structure:

 

  • What are the steps in the “value chain,” from raw materials to the end-consumer?
  • At each step – manufacturing, wholesaling and distribution, retailing or ultimate delivery – is the industry fragmented or consolidated? Are there hundreds of players or is the business dominated by just a few participants?  Each industry is unique in this regard.  It is not uncommon to find that there are a few giant players coupled with many much smaller ones.  In lodging, retailing, restaurants, and other industries, are the individual locations company-owned or franchised to independent owners?  In hospitals, education, and some other industries, there is a mix of non-profit and for-profit enterprises.  All these factors matter.
  • What is the nature of the distribution system and channels? For example, books are sold to bookstores both directly by publishers and by big wholesalers like the Ingram Book Company.  On the other hand, libraries may work with different systems and have different wholesalers.  In some industries, manufacturers’ representatives (who do not hold inventory) may dominate; in other industries, wholesalers or distributors (who hold inventory in stock) are the key.  Because the giant wholesaling system is hidden from the sight of consumers, it is often the most overlooked part of the process.  The US restaurant industry could not function without giant distributors like Sysco, yet few restaurant customers (diners) have ever heard of the company.  Might your company do business with such wholesalers as Anixter, Avnet, Arrow Electronics, Ingram Micro, ABC Supply, WW Grainger, C&S Wholesale, McKesson, Cardinal Health, Graybar, Univar, or Ferguson Industries?

Third, learn everything you can about the major participants at each level of the system:

  • Who are your competitors? Take a broad view of the competition.  Executives of Carnival Cruise Lines once told me their main competition was not other cruise lines, but it was Disney World.  Museums compete with amusement parks and movie theaters for the consumers’ dollar.
  • Who are your suppliers?
  • Who are your customers, at each level – distributors, wholesalers, retailers, end-consumers? You cannot know too much about your customers, how your products or services fit into their lives or their business processes.

Fourth, go deep on each company you discover:

  • Is it a public or private company? The easiest ways to find out are: a) look at their Wikipedia page and see if it says “private” or shows a stock listing; or b) type into Google “____(Company Name)____ Investor Relations.”  If it takes you to an investor relations page, it is a public company, one in which anyone can buy stock.  If there is no Google result on “investor relations,” you have a private company, the wrong name, or a division of a larger company. Public companies publish all their financial data, including gross and net profit margins, revenues, and varying levels of data on their sales and profits by division or product line.  The most important document to read is their Annual Report, called a 10-k form by the Securities and Exchange Commission.  Public companies also provide PowerPoints and other presentations on the company’s strategy, where it is growing, what it wants to expand what it wants to sell.  Devour this information. It is much harder to discover information on private companies – local business journal publications and Crunchbase are often good sources of information.
  • Where is the company headquartered?
  • What is the background of its leaders? Are they finance people or marketing people or technologists?
  • How big is it? Is it growing?  How profitable is it?  What are their goals?  What are their other divisions and activities?  Is the part of the company you deal with their main business, a side show, a money-loser, or a cash cow?

 

These steps may sound like a lot of work, but the future of your company and the intelligence of your strategies and tactics depend on “knowing the game.”  These steps should not be delegated: even if you have help doing the digging (hire a firm like Bizologie or make the process a student project), leadership must internalize what is learned.  No one other than top management can imagine (and execute) the possibilities for your enterprise!

 

 

Gary Hoover is a serial entrepreneur.  He and his friends founded of the first book superstore chain Bookstop (purchased by Barnes & Noble) and the business information company that became Hoovers.com (bought by Dun & Bradstreet).  Gary served as the first Entrepreneur-in-Residence at the University of Texas at Austin’s McCombs School of Business.  He has been a business enthusiast and historian since he began subscribing to Fortune Magazine at the age of 12, in 1963.  His books, posts, and videos can be found online, especially at www.hooversworld.com. He lives in Flatonia, Texas, with his 57,000-book personal library.

To get updated information about the team at Apogee Results, please follow us on your favorite social media channels.

 

How to Make a Strong Digital Start in 2020

 

Fast Out of the Gate: How to Make a Strong Digital Start in 2020

by Chris Glazer

When I was in business school, I was introduced to many impactful minds of past and present business leaders. Somehow, the quote that stuck the most is from perhaps the oldest modern business leader, Peter Drucker, known as the father of modern management. 

He wrote, 

Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.” Peter Drucker, Father of Modern Management

This insight has stuck with me for the past several years, in part, because it is quite simple, but also because it rings true with every company I have encountered. Working in a marketing agency, I come across countless organizations- from B2B technology firms to large e-commerce companies to small local service companies. These businesses differ vastly in specialization, focusing on selling their SaaS product, golf clubs, air filters, pest control, or popcorn, but they all have a few things in common: they have a vision for what makes them different from their competition and they have innovation that makes them special. However, they also typically struggle to properly market themselves in the vast digital landscape we find ourselves in. Marketing has evolved significantly over the past few decades, and there are now so many ways a business needs to market themselves that it can become dizzying.  

The difference between a great idea and a great business is marketing. It is said that Thomas Edison, who invented some of the most important inventions in the 20th century, was a terrible businessman and never made much money from his inventions. In this day in age, the struggle for businesses remains the same: how do we market ourselves correctly and create loyal customers? 

How can you push the envelope in 2020? Focus on marketing. Read on as we explore.

Focus on Finding the Right Ways to Reach your Customers

Every business needs marketing, but with so many techniques and channels, where should the focus be? The quick answer is that it depends on your business, as there is no one channel or technique to successfully market your business. You must analyze which channels are most profitable for you and test different marketing channels. If you are not engaging in digital marketing online, your first goal for 2020 should be building a digital marketing plan- because your competition most certainly is. For some companies, the tried and true mailer is still the most important marketing technique. Likewise, other companies successfully use cold calling to reach its customers. However, almost all companies can benefit from digital marketing online, but don’t take my word for it- just see what your competition is doing. The following are three of the most important channels for online marketing that all companies should be testing, analyzing the ROI for, and building new strategies for in 2020. 

Social Media in 2020

Social media can be an important part of your digital marketing mix, but don’t expect your organic social to do much for you. Most companies need to make sure their profiles are built out and appear professional on major social media sites (Facebook, LinkedIn, Twitter, Instagram), but unless you have already built up a giant following, spending too much time on organic social can be a waste of time and money. To reach the audience you need on social media, expect to spend money on paid social. You also need to pay attention to which social media channels you are investing in and test to figure out where you get the most engagement for your money. This helps ensure you are reaching the audience you need to reach. Social media should also be thought of as top-of-funnel, meaning building awareness to your brand. Social media typically does not yield strong conversion rates, but some business types are able to do it quite successfully.  

# 1 Social Media Tip for 2020 from Apogee

Pay to play in the spaces that matter most to potential customers. Social media is at its most powerful at the brand level, introducing new audiences across Facebook, Twitter, Instagram, Pinterest, LinkedIn, Snapchat, and TikTok to the products and services provided by your business. This introduction cannot be made without using the advertising systems in these channels. 

To acquire new audiences for your brand, craft audience targeting around your topics of expertise and their interest in those topics. Serve those audiences with short, easy to consume video content formatted for mobile. And then retarget engaged users to guide them along the customer journey. 

Using social media advertising in this way creates highly qualified audiences at a much lower cost for audience acquisition than depending on paid search alone. Michelle Stinson Ross, Senior Social Media Strategist

Paid Search, Google Shopping, and Display in 2020

Paid search can be a highly effective way to reach your customers. In 2020, most people use Google (and other search engines) to find what they are looking for. If you are selling a product, you need to be on Google paid search, Google Shopping, and be remarketing with display ads. Be careful of overusing display, however, as we can all get sucked into the pure volume of traffic without doing a full ROI analysis. Display is cheap, but the traffic is typically poor quality. Within paid search, shopping, and display, there are many different targeting tactics and campaign types. Make sure you are endlessly testing and analyzing your results to maintain as high an ROI as possible. 

For companies that are not directly selling a product online, or who are selling a low-cost product, paid search should be used more sparingly. It is increasingly expensive, particularly in competitive spaces, so make sure you are running a professionally managed, granular account. For some companies, paid search will not yield the results they are looking for. It should always be tested as a channel to possibly break into, but if you aren’t doing paid search already, make sure the person who is running it knows what they are doing and that you have a significant budget (and patience) for such a test. 

#1 Paid Search Tip for 2020 from Apogee

Many advertisers we see do not have extensive extension options built into their ads. Having multiple extensions at the account and/or campaign level can really bolster up an ad. The extensions we most often see in accounts are callout extensions since they require the least information/time. Having sitelink extensions helps lead the customer to a more specific page so they are more likely to spend time/convert. Call extensions are great if you have a sales team built out and are able to direct calls efficiently. Review and location extensions can especially help when a customer may be in a hurry to find an item or fulfill a need.

Going into 2020, customers will continue to want efficiency in their quest for goods and services. Having extensions helps you by bolstering your ads in size and accuracy but also helps the customer see when you offer exactly what they want. Lena Sidhu, Senior Paid Search Strategist

SEO in 2020

Search engine optimization is a marketing technique that is crucial to most companies, and yet, it is typically the most neglected channel. Why is this? The answer is two-fold: it is difficult to understand, and it takes time to see results. Companies do not want to be patient, with board members and CEO’s demanding instant results, but strong SEO work often yields the highest ROI over time. If you don’t have a specific SEO strategy in place, 2020 is the perfect time to start. SEO includes three main tactics: technical SEO, on-page or content SEO, and off-page SEO. All are important. 

  • Technical SEO is the practice of ensuring that Google (and other search engines) can properly understand your website and, in turn, serve your webpages as results in their Search Engine Results Page (SERP). This is of the utmost importance, because if Google cannot understand your website, it doesn’t matter how good your content is. 
  • On-page or content SEO is a process of understanding what keywords users are typing into search engines and optimizing your web pages so they properly target these queries. 
  • Off-page SEO is a practice of building links from other websites back to your website. This tells Google that others find your content important. 

All three tactics are important, but you need to make sure that the person or agency who runs your SEO is competent enough to keep up with Google’s constantly changing search algorithm. 

#1 SEO Tip for 2020 from Apogee

Companies need to spend more time talking about what they do in natural language. 

We can’t rely on keywords as a data source alone and need to focus on true questions people have about products/services that the company offers. Search is changing and queries need to be answered in plain english, hindi, spanish or what have you. 

According to Google’s recent update “small tables end” = “small end tables” = “good end tables for my living room” this is not new per say, but Google has announced they’ve gotten better at assessing content for natural language and human readability. We have seen sites that do this well gain more traction and sites that do this poorly start to lose rankings in recent months.  Brent Schiffman, Senior Search Engine Optimization Strategist

 

Most of All, Don’t Give Up

Marketing can be frustrating. You can try multiple practitioners, agencies, and tactics but still not get the results you need. It is important to remember, however, what Peter Drucker said. All too often, I see when a company begins to struggle, the first budget that is slashed is marketing. The instinct makes sense from a human psychological standpoint, but ultimately, it is the opposite move to get your company back on track.  

Our capabilities in digital marketing include organic and paid search, local SEO, social media marketing, content strategy and development, and influencer marketing. We have proven results over 20 years across a broad range of businesses. Our difference is in our proven capabilities, industry thought leadership and client focus.   

We know the way is not always clear. Don’t brave the digital marketing world by yourself. Connect with us and let us join you in developing your digital footprint.

 

Chris Glazer is the Senior Director of Client Operations at Apogee Results. He helps clients grow. His responsibilities include sales, managing and growing high-priority clients, and acting as an operational leader for the company. He strives to look at the whole picture of a business and use marketing to help companies achieve their goals.

To get updated information about the team at Apogee Results, please follow us on your favorite social media channels.