This question has been bandied around for as many years as there has been commerce. Public Relations (PR) and advertising are cousins. They serve the same master (Aunt Profit) but with different approaches.
Once men started creating surpluses that they could trade for needed goods that they didn’t have the earliest tradesmen “advertised” to their neighbors what they were going to have available at the next market. Once they established trusting relationships they was more reliance on public relations to drive the commerce machine. People will always do business with those they know and trust.
Jumping ahead, I have always found that advertising is great for getting instant results. It is where you put your coupons to attract new shoppers (and some savvy ones) to introduce to your products. The accounting is built into the campaign, because it is easy to quantify the results, and is very reliable. Advertising gives you "instant" results.
PR on the other hand is more of a long term investment. It can entail "free" advertising if you use press releases judiciously. It has a lot to do with who you know and who knows you. The newer arena of social networking is a terrific platform for PR efforts. A PR campaign is where you foster friendships and relationships. These connections may not become clients or customers for quite a while, but they are likely to be very faithful when they do.
It appears to me that customers come from an advertising base and clients come from a PR base. Both aspects are important for the success of your business; each has its strengths and weaknesses. Your business development strategies should include a mix of both methods depending on your predetermined goals. Relationships have a significant impact on your bottom line.
For more in depth information contact me: or at least leave a comment here. I'll be looking forward to hearing from you.
Showing posts with label product changes. Show all posts
Showing posts with label product changes. Show all posts
Friday, June 26, 2009
Sunday, May 10, 2009
Do You Have Your Hat on Backwards?
In today’s tough economy you have done your due diligence, thoroughly analyzed your income and out go, and sorted your numbers every which-way. You have discovered that your Widget A only accounts for 12% of your business. Should you drop this product line?
WAIT! There are other areas to consider before you pull the plug. Have you done a full analysis of the total potential market? You are likely to find that although Widget A only represents 12% of your business, it actually represents 90% of the total market. Whether by design or happenstance you have discovered a niche and filled it. This has long been the mantra of product designers and sales teams-“find a niche and fill it.”
With this knowledge on hand would you still want to pull the plug on Widget A? What are the chances for add-on sales of your other products? Are your Widget A customers likely to recommend your to their friends and associates? How much of the infrastructure of Widget A overlaps other products in your line? It may only represent 12% of your income, but how much of your outgo does it represent, probably a lot less than 12%.
A major car manufacturer I worked for several years ago made just this mistake and has never been the same since. These are all questions they should have asked as part of their strategic planning analysis. Your Widget A may not be your most profitable product, but it may have a great value to you in the whole scheme of things, in capturing extra business, or in just filling a need that nobody else is able to do, thus making you a hero and a successful commercial enterprise.
A lot of the success of your business will depend on this balancing act. It is critical that you due your due diligence, but not make any decisions until you look at the picture from both sides, yours and the client’s.
WAIT! There are other areas to consider before you pull the plug. Have you done a full analysis of the total potential market? You are likely to find that although Widget A only represents 12% of your business, it actually represents 90% of the total market. Whether by design or happenstance you have discovered a niche and filled it. This has long been the mantra of product designers and sales teams-“find a niche and fill it.”
With this knowledge on hand would you still want to pull the plug on Widget A? What are the chances for add-on sales of your other products? Are your Widget A customers likely to recommend your to their friends and associates? How much of the infrastructure of Widget A overlaps other products in your line? It may only represent 12% of your income, but how much of your outgo does it represent, probably a lot less than 12%.
A major car manufacturer I worked for several years ago made just this mistake and has never been the same since. These are all questions they should have asked as part of their strategic planning analysis. Your Widget A may not be your most profitable product, but it may have a great value to you in the whole scheme of things, in capturing extra business, or in just filling a need that nobody else is able to do, thus making you a hero and a successful commercial enterprise.
A lot of the success of your business will depend on this balancing act. It is critical that you due your due diligence, but not make any decisions until you look at the picture from both sides, yours and the client’s.
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