There are any number of powerful lessons we can learn about strategy. Painfully, they often come after we forge ahead without one.
Strategy will always be the way to win the battle for customers. And while most companies consider strategy through annual planning, I wonder if once a year is enough to win the war within your market.
For example, some companies form a strategy around selling their companies to private equity. But what does private equity value besides EBITDA? They are looking for recurring revenue/maintenance-focused companies with good management teams. And, of course, they look at customer retention, market share, profitability and enhancement success rates.
When organizations look at their financials at the end of the year, they typically look at growth and profit first. Unfortunately, if those two numbers look good, or if they grew 10-15%, they are satisfied.This year, many businesses seemed pleased if their financials equaled prior results, especially given the pandemic. But in digging deeper, we’re finding that they hit their sales goals due to construction or unusual enhancements, but contract sales did not grow. In fact, many contracts decreased. From a strategic standpoint, they lost ground on a key driver of value and it may have gone undetected.
Some landscape companies are actively ramping up sales and their first thought is to hire a sales person. I hear little in the way of whether or not they are targeting the right kind of sales person or the right kind of sales.
Today, we have access to an incredible amount of data. If we use market analytics to drive how we look at and execute strategy, we can not only see measurable results, but we can create a business that is both sustainable and attractive to customers and talent.
While most companies consider strategizing, doing so more than once a year might be necessary.
So how do we do that? First, think about strategy by job costing and separating customers by segments: residential, or commercial office, HOA/multifamily, retail, hospitality/resort, municipal, education/institution, industrial and healthcare, or other high-growth segment unique to your business now or in the future, such as senior living or green redevelopment.
Use data to determine which segments provide the best margins, the most enhancement work or customer retention histories. Then use this information to target your sales and marketing efforts.
Although marketing is often considered tactical in terms of its elements, such as flyers, collateral, or other content rich visuals, marketing must be strategically driven and your creative pieces have to be strategically driven, too.
Sometimes I’ll look at a website and it’s unclear what the company’s core business is or in what market it operates. I’ll see a website from a firm targeting commercial maintenance and see images of construction or residential projects. For companies where snow is critical to revenue, I wonder why winter services is an afterthought or barely mentioned at all.
In our conversations about the importance of eliminating silos, we typically think of operational silos – sales and ops, for example, when communication breaks down or there is slippage in service. Silos also exist with things, where flyers and websites and graphics look like they were created ad hoc, by teams or agencies who didn’t talk to each other or share the same data. The lesson here is that if you confuse your customer, either through disconnects in service or messaging, you’ll lose the sale.
To be successful, marketing must be part of the strategic big picture. All tactical elements and creative materials that support and drive sales have to align, just like our operational teams, in support of the greater objective. In other words, everything you execute – from installing plants to plowing snow to creating content – should drive revenue. And if it drives revenue, it needs a seat at the strategy table.
A final thought.
Link strategy across all functions to improve processes. Because processes, like all tactics, is the noise before defeat if it’s not linked to winning.
In my experience, hoping it will collapse into place is never a strategy. But sharpen your skills over time, hone your ability to become a better strategist, better at masterminding your market, and understand your customer and lead your company to stay in play.
