Riddell: Best bang for the buck, today and tomorrow
Not Business As Usual
There has been no shortage of great news recently about this summer’s tremendous tourist season. Forgetting for a second the supporting economics, one has to only experience the traffic issues on Friday evening or Sunday morning/afternoon to recognize that quite a few people are availing themselves of the recreational opportunities of Grand County.
Casual conversations with many small businesses all recount stories of revenues being “up.” Rumor has it that there is even a shortage of wheel barrows in the county from some businesses having to secure them just to take their additional profits to the bank.
What does cause some concern, however, is the answer to the question, “What are you doing to make sure this continues?”
An amazing number of business people see this business improvement as primarily a divine bequeath based largely on geography and economic factors over which they have no control. In other words — dumb luck. This is not a very sound way to run a sustainable business. Perhaps answering the question, “What can you do today to better insure your dumb luck continues?” could provide some insight to better prepare for the future.
There is an old geo-political axiom that says in times of peace, prepare for war. This very same admonition holds true for business. Figuring out ways to both conserve and better utilize cash is always a primary responsibility of sound business management. So many amateurs, when business is good, get cash silly. Business requirements and investments get replaced with “nice to haves.” Then when things drop off a bit, they spend an exorbitant amount of time and energy rearranging the deck chairs on the Titanic, not realizing that the thing is already hopelessly doomed. No more glaring example of this mistake is in the area of advertising.
When business is good, many small business owners see advertising as a waste of money. Their rationale is, “When I have all that I can handle, why spend money trying to drum up more?” Inherent in this rationale, unfortunately, is its own demise.
You will not always have more than you can handle. In fact, no business always has more than it can handle, and the majority of a business owner/manager’s time is trying to bring in more business. Few people understand, however, that your best, most cost-effective source of business growth is repeat business from existing customers. This is where advertising plays a key role, but it is vital that this key role reflect a new or perhaps a different message. This is where you want to emphasize that you value customer loyalty and work very hard to build a customer following. Frequent buyer programs, specials for locals, appreciation events — creating and communicating these types of events help solidify and perpetuate repeat business.
Given the wide geographical draw of Grand County, clearly the Sky-Hi News with its paper and internet presence is a very good medium for advertising such programs. But this medium also needs to be reinforced with other channels as well. While direct email and social media come to mind, it is critical that all avenues have some mechanism for measuring results. It is not enough to just say, “Mention this ad for 5 percent off your bill.” The people in the organization have to be trained and disciplined to capture each one of these responses. And then the job becomes one of evaluating the effectiveness.
Years ago the president of Campbell Soups remarked that he was 100 percent sure that 50 percent of his advertising dollars were effective — he just didn’t know which 50 percent. In this day and age, no business owner or manager can afford such ignorance. In the quest to ensure the best bang for every buck, you have to know what your costs per lead are. Without this basic information, you are resigning your advertising and ultimately your business to the previously mentioned category of “blind luck.” Not exactly a solid foundation for the future.
Following a successful international business career, John Riddell turned his attention to small business/entrepreneurial pursuits that included corporate turn-arounds, start-ups, teaching, authoring business and sports columns and serving as VP for the Chattanooga Chamber of Commerce directing its Center for Entrepreneurial Growth.
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After hearing stiff opposition to a proposed short-term rental moratorium, the Board of Grand County Commissioners delayed a vote on pausing new licenses.