15 May 2016
Securing a bank loan is not always easy for small SMEs, and even more so during challenging times. Here are 8 tips to SMEs to help them become more bankable.
Abu Dhabi, 13 June 2016
As a Consultant and professional trainer at PriceWaterhouseCoopers (PwC), and Founder of his own training company StudySmart, Dr. Constantine “Dino” Kiritsis, a Greek national, has met a lot of people. Over the past 15 years, he has delivered over 10,000 hours of training and travelled to over 30 countries. One thing he realized is that although cultures are different, marketing tactics and strategies for SMEs are very similar across the world. During an SME Academy workshop earlier this year, a programme co-led and sponsored by the National Bank of Abu Dhabi (NBAD) to support SMEs in the region, Dr. Kiritsis guided a crowded room of entrepreneurs through the fundamentals of marketing. “No need to spend millions in marketing,” he said. “You can spend almost zero money and really get across”. Speaking without notes for three hours he delivered a thought provoking session to the SME owners who managed to make it through the registration process. Here is a selection of his most crucial marketing tips.
1. Have a vision
Your marketing has to be aligned with your strategy and your vision. A vision is an imperative. ‘Making money’ is not a vision, it’s the consequence of a vision. You must have a reason to do something otherwise your chances of failing are enhanced. When you ask people about their vision, they often say something very generic, sometimes even something they have already achieved. That’s not an effective vision. A vision should be something that is still out there for you. It’s the grand idea, which in many cases can sound “crazy”. Bill Gates wanted to see one PC on every desk and everybody was laughing. Now we have five each. Once you have a vision you can plan a strategy to reach that vision.
2. Cut down on your time wasters
We live in an era of problematic time management. We are swamped with emails, have personal issues to deal with, we check our mobile phones over 150 times per day on average. You cannot fight these changes easily, but you need to adapt. What you can do is at least manage yourself. Start writing down all your time wasters and make a plan. Without checking what you’re doing, you cannot fix this and have time to think strategically about your marketing.
3. Understand what Marketing is not
4. Identify your market positioning and be consistent
Marketing needs to be aligned with strategy. You can either be “Low” or “High cost”, either “Mass product” or “Different” (brands / quality), or even hybrid adopting a combination, which is more difficult, but you must know where you are before you market because tactics need to be applicable and aligned to your organization. If you are a high-class differentiated company for instance you will want to advertise in high-end magazines that “relate” and could “support” your product. You can also be offering a product in a niche market. Niche markets can have great returns even though in many cases no one would remember the names of these brands. For example, do you know the names of the companies that manufacture generic screws or coat hangers? Probably not. But they can be very successful and have loyal customers. Therefore, know where you are and wherever you are, be consistent. If a company intends to offer a product that departs from the original strategy, creating a new brand may be a solution. Toyota for example created Lexus to enter the high – end auto market in the mid 1980’s.
5. Segment your market
Who is your customer? Who is your ideal customer? You need to segment your market. Customers change over time. X may have been a classic customer for Pampers but his children no longer need Pampers. There is a life cycle and you have to know who your customer is and in which stage of the ‘customer life cycle’. You may segment customers by geography, behavior, demographics, psychographics, and decide for instance to sell to people between 20 and 30 years, living in Europe, who are interested in eco-friendly products.
6. Have a good Customer relationship management (CRM) system
CRM is very important! We collect hundreds of business cards and contacts per month and need to utilize some sort of system that must be constantly updated. Yes, you may know the segmentation and your marketing mix, but few companies have a good, reliable and up to date CRM system. You need to make sure your customers are documented. A solid CRM system can make you focus on target segments more effectively and in many cases, be automated. CRM is crucial.
7. Identify your stakeholders
When you build your strategy, think about all your stakeholders: shareholders, suppliers, employees, the bank, the government, lobbyists, everyone who has a level of interest and influence in your organization. Your actions, products, tactics, posts on Facebook for instance can affect them all. Stakeholders must generally be satisfied. This is the beginning of effective corporate governance and corporate social responsibility (CSR).
8. Screen competition… all your competition
When asked about competition, people often make a big mistake. 95% of the time, they name companies they are directly competing with. Don’t overlook potential new entrants in the market or substitutes: bitcoin and telecom companies for instance for banks, or skype for the airline industry as many people now choose conference calls over traveling. Other examples include Amazon and Alibaba, the largest retailers in the world with no products, that affected the whole retail industry, and Uber, the largest taxi company with no taxis. We need to think holistically and constantly attempt to predict and forecast. We also need to maintain existing customers’ loyalty. Few companies know that it is cheaper to keep a customer than to find a new one.
9. Market your strengths
Every company should have something unique to sell. Marketing should focus on the company’s strengths, on what you are good at, not on weaknesses. Many companies market very generally. It sounds strange but it is true.
10. Know your growth options: 4 directions, 7 methods
By using Andsoff’s model, Dr. Kiritsis noted that there are 4 main directions companies can take to grow:
In many cases, large companies can use all four directions at the same time, however SME’s may not have the resources to do so and ‘spread themselves’ too much. In terms of methods used, Dr. Kiritsis rolled out his “7 methods” theory based on the most common approaches used by organizations, including: Licensing, Franchising, Acquisition, Merger and Acquisition, Joint Venture, Exporting and Organic growth. Again, choosing how to grow and which method to use requires effective evaluation of methodologies, that relate to financial return, feasibility, and suitability for the company.
11. You need a Marketing ‘mix’
Marketing is a combination of things. You need to consider all the so-called 7Ps: Product, Price, Place, Promotion, People, Processes and Presentation. And don’t rely to only on one tactic. There needs to be a combination to reach the desired promotional result: offline/online, audio, podcast, video, blog, social media, etc. Ingredients out there are the same for everybody but the way you mix those ingredients makes the difference. You must have a great marketing mix that works specifically for you. And you can’t have the same mix for each product.
12. Embrace the Digital sphere
Be present online. As a number of theorists have argued, the question is not about engaging in the digital sphere, it’s about how well you do it. Have a website and engage with your prospects on social media. In Europe, online shopping is growing by 10% every year. Based on 2015 stats, 72% of all Internet users are now also active on social media. It is no longer just used by the young and the restless. It is global and embedded in every corner of the web.
13. Think “Content”
You can use smart techniques to market. Content marketing is one of them. People like stories. They like testimonials. They read engaging articles on LinkedIn. Creating good content in various formats on different platforms is important to reach out to customers. Video is also a very popular tool for content. Do you have a Youtube channel?
14. Innovate and believe in your ideas
What makes you different? And how can you have a sustainable competitive advantage when everything can be copied? The reality is there is no sustainable advantage. You cannot win forever. That’s why you need to ‘innovate’. How? Think of solving a problem. In most cases, when somebody has come up with an innovation, there was a problem that has been solved.
As an SME you have the ideal size to be innovative. SMEs have a lot of creative ideas. And they have the flexibility to say ‘I am going to do this and I am doing it tomorrow’. They take the risk. Big corporations on the other may not have this competitive advantage as they face too many procedures and risks. People can spend up to 40% of their time on tasks relating to reporting, regulations and compliance. They tend to loose that entrepreneurial activity they had in the beginning and this is why large companies buy out small companies to keep the momentum. SME’s are the future and play an integral part of the economy. But you have to believe in your ideas and go for it.
Companies fail because they don’t implement. We all have ideas. Why don’t we materialize? In many cases, because we don’t have time. We tend to analyse too much, which may lead to paralysis. Implementation is the strategy. Take action and take it now. Get the ball rolling because things take time. So don’t wait.
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