The answer is unknown to me - however for businesses the key question in the coming year is "what is my formulae for increasing sales?"
If you do what everyone else does you may earn industry standard profits. If you add in your own factors that add value or improve exclusivity then you can attract more customers and possibly increase prices.
Consider the work that a franchisee does in getting their formulae for success right. For McDonalds key factors include location, layout of their stores, the cooking process, the supply chain, promotion activities by franchisees as well as the cleaning of the toilets - all this before you consider the advertising. For Kwikfit it is all about location, speed of service, customer support, and monitoring of their daily operational statistics.
One one hand franchises achieve their formulae during the early part of their formation and continually improve as they develop. If they do not then as the market changes then their formulae ceases to work.
How do they achieve their formulae? Experience shows that it is a mix of:
- Investigating and taking decisions based on ambiguous information
- Being growth orientated
- Establishing base data to collect on a regular basis
- Reviewing information and tweaking strategies
Key to the success of this is the investigation of ambiguous information. This closes the gap between what is already known and what is not known. In large companies this work is done by market analysists. In small companies it is often not done.
As part of every business or strategic plan you are supposed to do a PESTLE or STEEP analysis. You match this to what you are good at in order to take advantage of opportunities available (SWOT). What is often missed out is developing the information already known ie it is easy to write down information you already have rather than investigate new areas to possibly develop your products or markets.
"Plugging into your Market" is a process that helps a company establish a base of data from which they can make decisions. It establishes some data that the company can collect on a regular basis.
From this base the company can establish competitive advantage over their rivals without just reducing prices or advertising more. Consider the following case
A struggling grocer has a high street store and sells locally sourced fruit and vegetables. They have tried lots of things to promote and change their product mix but every which way they turn they scrape by. They notice a delivery van in a local village delivering organic vegetables in boxes and they decide to do the same. They do distribute leaflets offering the service and they get some customers. Unfortunately like other strategies it fails over a 6 month period. Standing back from the problem they did not focus enough on quality, they ended up sending out the non display items from the shop as it was "what was left". The ordering system was complicated and difficult to manage. They did not have a website to do ordering on or keep in contact with their customers. They also had no real idea who their customers were.
Much of the problem arises as the customers who want organic fruit and vegetables are a different set to the ones that buy regularly on the high street. They behave differently. They are more likely to shop online and less likely to go into town. Therefore some research would have helped establish their perception of what they want. Rather than offering lots of goods at a cheap price they could try selling a new variety of goods at a more expensive price. Key to making this work is to communicate in the language of their new customer base. This may mean an online presence, online ordering, and having customer support. This may also mean that there needs to be a critical size of business to support this operation and make it successful. Here is the risk and commitment of the business. Have they the resources to really make it work?
This case transfers to many situations that are business to business as well as business to consumer. Some research, some commitment, some resources and a little risk.
It is easy to write statements that are in newspapers and trade journals linking factors together - such as cricket and chocolate. The danger businesses have is adopting these factors without doing their own research and seeing how applicable it is for them.
If your business would like to discuss a research plan and an approach that will reduce risk of failure then simple contact us