In a recent Meridian national growth survey to our 3,700 plus clients, 92% reported they wanted to grow volume. When asked whether they were achieving their specific growth percentage target – 45% said yes. This means the majority of this great country’s marketers wants to grow volume but is facing serious challenges.
Now I’ll admit our survey could be a little skewed since Meridian’s marketer clients are typically smarter than average, plus value education and high-performance. But nevertheless, the theme of wanting sales growth is prevalent in the industry and touted by suppliers. You can’t go to a conference or meeting without hearing suppliers beating the market share drum.
So what do marketers report gets in their way of growth? It’s really a three-part punch of roadblocks:
- Lack of demand. More devastatingly prevalent in certain areas of the country and within certain industries.
- Competition. Not so much new competitors, but the same old competitors going to the market with cut-rate pricing to snag more volume and in some instances just trying to stay alive by holding current volumes the only way they know how. It’s a hard lesson to learn the exact loyalty breaking point by losing a long-term, high-volume, high-margin customer.
- CEO and staff limitations. CEOs report being mired in day to day diversions and staff being stretched to the max.
So let’s talk about how to smash through each of these three major growth roadblocks.
Smash the Lower Demand Roadblock – The most effective way to grow despite lower fuel demand is to redefine growth. While the industry typically equates growth with “more gallons” consider redefining growth as “Gross Profit Increase.” This requires an entire shift in thinking.
With that broader gross profit definition, it’s far easier to think beyond just gallons, opening the door for a myriad of profitable new services, possibly charging for formerly free services (think airline strategy!) and even service-oriented ways to deliver fuel such as wet-hosing. Defining growth in terms of gross profit increase means expanding the scope of your core competencies such as taking real estate development expertise into non-petro applications or possibly using drivers to deliver non-petro goods needed by top tier customers.
As CEO, time spent elbow to elbow with your top 10 customers, asking them about current challenges in their business, taking copious notes and then going back to your team to brainstorm solutions can create breakthrough growth despite stagnant fuel demand.
Smash the Low-Price War Roadblock – I remember being at a NACS meeting where three of nation’s top fuel chain CEOs announced their goals to operate profitably at zero fuel margin. Thank goodness they have now come to their senses and realized it’s more fun to make a little money on fuel too! But, that doesn’t keep your competitor from offering super low prices.
To smash this roadblock, you must have a quantifiably better product or service. Realize that most marketers say the reason customers buy from them is their wonderfully better service. Since 95 out of 100 marketers say the same thing, my question to you is, “So just how much is your stellar service worth to your customers?” If you can measure and quantify what your service means to the customer in hard dollars, then you have a true marketable value proposition. In other words, by buying from you, they save $xxxxxx. If you can’t do that, and your competitor keeps lowering price, even the most loyal customer will be tempted to jump ship.
To put teeth into your service advantage, consider adding a guarantee. While customers have become skeptical of guarantees, if you can show them how you measure that guarantee, and there is no fluff associated, it begins to carry weight and even get talked about in the marketplace, creating word of mouth buzz and more customers for you.
We try to practice what I preach and did this at Meridian years ago. We started having marketers record and track the value of what they were learning from us. That allowed us to put six-figure guarantees on our events and M-Power™ Program. And then by adding our TraX to Success™ measurement tool, we could prove we were serious and it wasn’t fluff. And that led to quantified testimonials.
Challenge your team to brainstorm for measurable value propositions you can put forth into the marketplace. I worked diligently on that with my first “Success Tactics For The Smaller Marketer” group in an intensive six-month program (now available as an on-line course at www.askmeridian.com) to create more profitability despite competitors with better buying economics. It was amazing what they did in that short time to define, quantify and then market their true competitive advantages. One marketer, who had a price-cutter eat his lunch when he came into the program, not only regained most of his former customers who had been stolen, but snagged that competitor’s best salesman to boot! Now that’s smashing a growth roadblock!
Smash the CEO and Staff Limitation Roadblock – This roadblock must be smashed with a triple punch. Punch number one starts at the CEO level. Most CEOs spend far too much time doing the day to day work tasks of the company and far too little time on strategy. So the bigger question is, “Why does that happen?” Now their answers to that question get interesting.
For some CEOs, they actually thrive on the day to day. It gets their juices flowing to solve problems. It’s a way to feel they most productive. The trouble with that thinking is that as they do the $15 per hour tasks, they could have been creating a game plan for another $100K or $200K to the bottom line!
For others, when that little snag comes up, even though they know it doesn’t require their pay grade, it’s faster for them to just handle it. In their thinking, the staff is already so overloaded so why bother them with it, right? Or how about the CEO that everyone comes to for a decision? Are you beginning to see the pattern here? The first problem may not be the staff!
The other day, one of my M-Power™ CEOs sent me a list of what he did between 8 am and Noon on a particular day. His list ended up being about 10 fires he’d put out. As an executive coach for him and his team, I had to reply back with two questions. #1) Why did those fires occur? #2) Why are you the one putting them out?
Asking yourself these two questions on a regular basis will give you major insight on how to become a more strategic CEO and lead your company to significant new profits. But that still won’t happen if your staff is too mired down.
Punch number two must occur at the staff level. There are two reasons your staff get stretched too thin and fortunately, both are solvable. By far, the number one reason staff get mired without even being aware of it, is that companies maintain outdated, but very comfortable, processes. As human beings, we all have a tendency to want to keep doing things the way we were doing it. Even with automation, I find marketer team members still keeping time-consuming paper trails and/or double-check spreadsheets.
Punch number three requires uncovering what is being done outside your system and why. Only with this information in hand can your team make profitable productivity improvements. I was recently working with a CEO and his team where we were flowcharting their current processes. As I asked questions about why they were doing things certain ways, and began suggesting specific alternative efficiencies, one objection I repeatedly heard was “Oh, our software can’t do that.” Nice, pat answer, but I knew the software could!
One of my parting recommendations to the owner was for him to ask his software provider to send a specialist to assess his team’s use of the software. Smartly, he immediately acted on that suggestion. A software support specialist from his GL vendor visited his headquarters and sat with each member of his office team, asking the right questions, asking to see the paper and spreadsheets being kept outside the system. The result was an entire page of high ROI recommendations.
But here is the neat part. That owner got something more interesting and totally unexpected from that visit. It was revealed to him that one of his most loyal team members was a serious roadblock. And one of his newer people, not very well liked by the others, was actually a work horse! So not only did he get insight about system efficiency, he also received insightful feedback about the true productivity levels of his team!
Office situations like he discovered are more prevalent than most CEOs know. One of the biggest challenges any CEO faces is to create a culture where change is not dreaded, but seen as exciting and necessary despite the inevitable pain. In this economic climate, you cannot afford “stick-in-the-muds” on your team and survive.
I want to leave you with a strong word of encouragement. You can grow in this climate. Not easily, and not without the pain of change, but you can do it and the pain is short term. Start by redefining your definition of growth, get to work on your own productivity, smashing through your own barriers, and then encourage and empower your team to do the same. One of my greatest joys and why we do what we do at Meridian is seeing marketers, their families and their teams achieving new levels of success. I hope you smash your roadblocks and enjoy the profit fruits of new found growth!