2008 – Did you achieve your objectives?

So as another year draws to a rather chilly end, it’s a good time to check back and see if the 2008 business strategy really did come to fruition. As a marketing strategist I’m fervent about focusing my clients on their short and medium term objectives, ensuring that they always have clear but challenging financial goals to get them out of bed each day.

This year has been a year of change for Corve Consultancy. As from January 1st, the focus of the business finally moved away from North East Wales and a new strategy was implemented to reposition providing business support in Manchester, Cheshire and the North West of England. It was a natural progression. A long standing contract with the Welsh Assembly Government had run its course which meant that Corve Consultancy no longer had to be domiciled in the Principality.

Reluctantly we vacated the offices in Rhosllanerchrugog’s beautiful STIWT Theatre and finally took possession of the new office built into the garden of the house in Cheshire and affectionately nicknamed by the children as The Hut. Then it was down to the serious stuff. With one exception, all the Welsh work was terminated and so Corve Consultancy had an almost clean slate to develop new contacts and a new client base - almost like starting again from scratch!

So time to employ the advice that I give to so many other SMEs, about doing a few simple things well, to get the new business ball rolling. I scoured the Cheshire area for a business club to join. I’m not a big fan of the BNI set up, just my opinion, it’s very popular and obviously does a good job for many, but its format is not for me.

So I was delighted to discover the County Business Club based at Edgeley Park, the home of Stockport County – a ground where I’ve never seen my team (Wolves) lose! This is a good club with around 40 members who turn up regularly every Thursday morning to network, refer business and have a bit of fun. As I’ve said before, networking is about the people you can meet through the people you meet.

And while some of the members at CBC have referred business to me directly and have also used my services themselves, it is the people I have met as a result of introductions from them that have been the real contributors to establishing Corve Consultancy as a North West facing business.

Whenever I’ve been involved in networking clubs, I’ve always tried to discover early on who the prodigious networkers are and unashamedly try and leverage the extra work they do at the array of other clubs and meetings they attend. Anyway as a result of my involvement at CBC I’ve now replaced the Welsh Assembly Government work with my involvement in the delivery of a high growth programme for SMEs under the ultimate aegis of the North West Development Agency.

As a Chartered Marketer, I’m listed in the Consultants Database on the CIM website. It took a while for the CIM to get up to speed in terms of offering this service – they were a long way behind the Chartered Institutes that represent accountants and solicitors. But two years or so on, the database has been another excellent source of new business for Corve Consultancy.

It’s a nice payback, because as the CIM’s SME Ambassador for Greater Manchester, I do considerable unpaid work to promote the institute and further the cause of making high level marketing strategy and marketing communications available to SMEs. This involves providing marketing clinics at business fairs and shows across the North West and Cheshire as well as undertaking one off evening events for groups of SMEs who just want more information about business strategy in these difficult times.

So why do these times seem more difficult than the other recessions I’ve experienced in my working lifetime and what does that mean for the profile of marketing and business strategy?

Well in the recessions of the early 1990’s, the 80’s and the seventies there was still an ocean of lending around to help businesses weather the storm. I was working in business finance during each of those eras and we prospered as there was a greater demand for borrowing from home and abroad.

Today, as we all know, after laying waste the last generation of proper lenders and replacing them with children who do some form of credit scoring and call it analysis, the banking chickens have well and truly come home to roost. Hardly surprising really – lending is an art not a science and machines programmed by the inexperienced will never get right.

So today business finance is at a premium and while it is available in small pockets, here and there, if you know where to look and how to apply, the well has almost run dry and businesses are having to face up to the fact that using additional working capital to paper over the cracks of a poor business strategy is no longer and option.

What I’m seeing, is more and more owner managers turning to Chartered Marketers to take advice on marketing strategy because this is the way to reorganize and secure the right future for a business rather than hiding the inadequacies under a carpet of additional business finance.

But how has that helped my 2008 strategy to reposition Corve Consultancy as a North West facing business. Well it wouldn’t have done, if I had become more visible in the area where I put most of my promotional resources – online.

With the right web and online strategy partner, SMEs can achieve solid visibility through natural ranking, without paying some cowboy a small fortune to ‘unnaturally’ boost your position. Online strategy has always played a big part in my work with SMEs and without the right technical support I’d be nowhere near as confident in the results as I am.

So it was nightmare when Dewi, my erstwhile all things online associate packed it all in and got a proper job last autumn. But as one door closes another opens and as Dewi had been North Wales based, it presented an opportunity to strike up a new and if possible even stronger partnership in Greater Manchester.

Enter Darren at RedStar in Manchester, who came highly recommended through Business Link and who has worked wonders on some of my clients sites not to mention galvanising me into sustaining the kind of online presence we can all achieve by doing a few important things very well and regularly.

So as 2008 draws to a close I’m delighted that Corve Consultancy is now firmly repositioned as I planned. It was April when the last Welsh based client ran its course and much I loved my work with them in Neath, you can’t get much further away from Bramhall! Now we have 2009 to look forward to and a new series of objectives to achieve.

Are you rubbish at networking?

I used to be and if I'm honest when I compare myself to some of my peers (yes Catherine that's you - the uber networker!!!) I could still improve. A while ago, a Ladies Business Luncheon Club asked me to do my top ten networking tips so here they are.

Get out there and do the do!

Tip number one – remember why we do networking. We do it because it is, potentially, the best and least expensive way of developing new business. But remember, the word is networking, not net lunching or net drinking or net gossiping, it’s a business activity and as the networking guru Nigel Risner says if you are on the pitch then you need to play the game. Why go if you don’t want to network? The hospitality may be excellent, but it’s not a strong enough reason on its own, in the light of our busy schedules!!

Networking is so effective because people buy people first and personal recommendation is the strongest introduction and commendation we are ever going to receive. The endorsement of a third party individual that knows what we do and how well we do it is more effective than a thousand business-to-business mailshots.

The big difference is realising that networking is not about who you know; it’s about who they know and how and why they know them. Networking is farming not hunting, we are not trying to trap just one big customer here, we are planting a meadow that the first customer eats in and then goes back to tell the whole herd where to come and graze!

We all need contacts; none of us, no matter how dedicated we are, can make it in business in complete isolation. If you locked four strangers, a solicitor, a bank manager, an accountant and an Independent Financial Adviser in a room for an hour, they would come out doing business – but so would a plumber, a builder, a carpenter and an electrician. Do you build mini networks and have you thought about who can be in a small synergous group like this with your business? Are you getting to as many events as you possibly can and putting yourself into environments where your prospective clients will be? Our next big customer may be sat right next to us now!


Tip number two – be prepared! Do we organise networking events and then not tell anyone who’s coming or even give them a name badge when they arrive! Imagine how much more productive it might be if we knew that a certain person was going to be there and that we had the opportunity to contact them before hand and ask if we can make sure that we have 5 minutes during the event for a discussion or to make an introduction to a colleague who may be with us. How much more effective and impactive could our time be during this business event, if we have the opportunity to prepare well beforehand and don’t have to spend precious time trawling the crowd to find useful new contacts?

More on business cards later, but how many of us could hand out ten of your business cards to someone take away? And how many of us carry a pen and maybe a small notepad to jot down the names of the nine other people that will receive our cards? PREPARATION!

Tip number three – look and feel the part. Consider something that’s embedded in us from our childhood when we are told DON’T TALK TO STRANGERS! Well at networking its okay to talk to strangers, in fact it’s essential! Without being too glib, the police are never called to a threatening networking meeting and nobody ever got abducted from a Business Link lunch! But despite that we don’t like talking to strangers do we?

What usually happens at networking meetings, (and blokes are the worst at this), people slide into the room, notice the wall is about to fall down and decide they ought to prop it up to save everyone else from getting hurt! Then they put the antennae out and scan the room for some one they know who they can go and stand with and feel comfortable!!

Read Susan Jeffers, Feel the Fear and do it Anyway – it covers this topic in detail? Ivan Misner says that pride; shyness and fear are the three major obstacles to successful networking, which cannot be solved in 20 minutes, but there are some quick fixes.

Walk tall even if that’s metaphorically not literally, maintain lots of good eye contact, be interested (it makes you interesting!) and SMILE, there will be so many terrified people in that room, that you will stand out like a beacon and attract all around you. Most people at networking events are too scared to circulate and meet up, show enthusiasm and passion you will be a magnet – even if you don’t feel like it! The motivational speaker Anthony Robbins has an expression, (which I assure, is on this theme); it goes FAKE IT UNTIL YOU MAKE IT. I assure you he’s talking about self-confidence.


Tip number four – working the room. The golden rule is don’t ever leave anywhere without speaking to the person you really wanted to, whether it was a person you had identified before you got there or someone you saw when you arrived. Target a number of people to see during the event – why not try and meet two people you didn’t know before at every event you go to.

Be persistent, the only thing failure cannot live with is persistence! This is business, so remember all the reasons why we are doing this in the first place. Assume no one will seek you out and don’t talk to people you already know – if you need to have a specific conversation with them agree a time for a telephone call later or tomorrow – but both stick to that arrangement. On average, 5 to 7 minutes is about right per conversation. Minimise small talk, one good contact is worth more than a dozen chatterers.


Tip number five – ways to break into groups or break the ice with individuals. Do be aware of body language first, a close, huddled group of individuals may be discussing things in confidence and not welcome an intrusion at that point. A more relaxed group posture will tell you its okay to approach.

So groups first – “DO YOU MIND IF I JOIN YOU FOR A FEW MINUTES”. It really is as easy as that. Believe it or not the whole event has not been pre-arranged so that hand picked groups of people stand casually around waiting for you to come up so they can crush you!!! DO YOU MIND IF I JOIN YOU FOR A FEW MINUTES. Half or more of that group would never have had the confidence to do that and will immediately feel admiration for you and interest in you through that one simple exercise.

With individuals the options are more varied but equally simple to use. DO YOU KNOW A LOT OF OTHER PEOPLE HERE? If they say yes – what do you say (WILL YOU INTRODUCE ME TO SOME OF THEM PLEASE)? If they say no, you say ‘neither do I shall we get to know each other and then see who we can meet together?’ Other variations on the theme could be – WHAT ARE YOU HOPING TO GET OUT OF TODAY? WHAT KIND OF BUSINESS CONTACTS ARE YOU LOOKING FOR TODAY? SO WHAT DO YOU DO THEN?


Tip number six – horror of horrors, someone says to us – SO WHAT DO YOU DO THEN? And do you know what, we tell them what we do and they switch off in seconds! This is a topic on its own, but here are some bullet point thoughts on your elevator speech – so called because you could deliver it in the time it takes a lift to go from one floor to the next – about 10 seconds.

There is a school of thought that says we have subliminally positioned certain professions in a negative light and switch off immediately we hear the words accountant, management consultant, estate agent, independent financial adviser etc. Proponents of this school of thought recommend that you don’t say ‘I’m an estate agent’ when asked what you do because of the supposed negative connotations.

They suggest a flowery alternative like – ‘I enable people to live in the houses of their dreams from bungalows to mansions’. The cynical amongst us may respond OH YOU’RE AN ESTATE AGENT THEN, and immediately think they were weak for not acknowledging their chosen profession. Far better to say ‘I’m an estate agent, I co-ordinate buyers, solicitors, building societies and surveyors for up to 20 clients at a time.’

It’s far more impactive because it’s telling people WHAT YOU CAN DO FOR THEM – AND THAT’S ALL WE ARE INTERESTED IN – WHAT CAN YOU DO FOR ME OR SOMEONE I KNOW. So position what you choose to say in relation to the benefits to your Clients not the tasks and functions you perform. Use your own words, be comfortable with them, and make sure they sound like you not like something from a book. Remember – WHAT I DO, BUT HOW IT BENEFITS YOU! The confidence it will give you walking into a room knowing you have something important and valuable to say is immeasurable.


Tip number seven – so how do you get away from someone at the end of your 5 or 7 minutes? We need something better than ‘I’ve just got to go to the toilet’! There are times when it seems only the incontinent go to networking events!

The professional way to exit that conversation is to say I’VE REALLY ENJOYED MEETING YOU BUT I NEED TO MOVE ON TO MEET SOME OTHER SPECIFIC DELEGATES. Then follow up with CAN I INTRODUCE YOU TO A.N. OTHER / SHALL WE JOIN THAT GROUP AND INTRODUCE OURSELVES / CAN YOU INTRODUCE ME TO.

Playing the role of the host is a very appropriate way to exit these mini meetings without leaving the other person high and dry and that is essential for their self-esteem and most importantly to leave them feeling good about THEMSELVES having just met you.

Tip number eight – Business Cards. We have already highlighted the basic importance of being well stocked with your own cards at networking events, and there are one or two specifics to look at as well. When you exchange them it is useful just to jot date and location on them either at the time or afterwards- it may be the difference in someone remembering you or not in six months if you can say we met on November 19th at the XYZ meeting in London.

This is also a basic, but never underestimate how important our names are to us especially when other people get them wrong – so take care when receiving a business card to read the name carefully and commit it accurately to memory.

Do we have something printed on both sides of our business cards? A business card is your most frequently used piece of marketing communications material, so make it work. Remember that elevator speech – there is a derivation of it that we can all put on our cards – Jane Smith Estate Agent – COORDINATING BUYERS, SOLICITORS, SURVEYORS AND LENDERS FOR YOUR PEACE OF MIND. If you are a consultant with multiple strings to your bow, then highlight Business Strategy, Marketing and Finance on the back of your card for clarity.

Tips number nine and ten are the most important of all and left until the end to highlight them albeit slightly out of sequence.

Tip number nine concerns our expectations and tactics at any networking event and indeed like so much of this it covers many other life events & experiences as well. We have to go to networking events in the mindset of a giver not a receiver. The words HOW CAN I HELP should be amongst the most frequent that you use at these events. Ask people the question WHAT’S TOP OF YOUR LIST OF BUSINESS NEEDS AT THE MOMENT? It may just be that you or someone you know has the ideal solution or can move the situation on for your new contact – HOW POWERFUL IS THAT.

Remember what the sales guru Robin Fielder calls the UNFAILING BOOMERANG OF LIFE – whatever we throw out comes hurtling back towards us ten fold – so make it good. Think about giving for a moment and think about that HOW CAN I HELP scenario. What’s the worst that can happen? Someone says no thank you and you move on – being remembered for having offered!! Someone says YES your business could really help us. Or you say I know just the person you should talk to, to solve this issue. Or you say I don’t know but I’ll ask around my contacts and come back to you – because NETWORKING IS NOT ABOUT YOU AND THEM, ITS ABOUT WHO YOU EACH KNOW AND ONE OF YOUR CONTACTS, UNBEKNOWN TO YOU, MAY HAVE THE IDEAL SOLUTION AND THEN THREE PEOPLE HAVE BENEFITTED FROM YOU ASKING ‘HOW CAN I HELP’.

If you come to networking events with a ‘what’s in it for me’ attitude the answer will be nothing. If you shift the paradigm and think what’s in it for everyone I meet, then you will be a successful and as a result a profitable Networker.

Tip number 10, - is more important than all these things that have gone before. It’s the follow up or as the Americans say, YOU TALKED THE TALK, CAN YOU WALK THE WALK. If you don’t undertake all the follow up actions you agreed within three days of the meeting then you may as well not have bothered! When you leave the meeting make yourself some follow up notes, perhaps when you are notating your new business cards with dates and locations and then do whatever you said.

Self Employed Marketing

One day this week I got an email from Karen, my next door neighbour. She’s a director of a marketing agency in Greater Manchester that had high hopes of being taken over by a larger competitor with all the resultant benefits for her and her fellow shareholders. The email said ‘well this wasn’t in the plans – the other directors have decided to close down and we’re all going to be redundant!”

It brought back all the memories of my last employer deciding, seven or so years ago, to retreat to Tokyo and close its UK Investment Banking Division. So I was delighted when my friend told me that she was going to start her own business and doubtless over the next few days we’ll sit down and talk about it.

It made me reflect on what you learn when you go out on your own and step away from the comfort of a corporate environment. I’d been fortunate to work for some well know international financial institutions and often wondered whether I got through prospects’ doors because I was competent and capable, or because the business card said “Representative of Billy Big Bank”?

I suspect that the Billy Big Bank name probably opened the door, either out of courtesy or curiosity. How far the door stayed open and what kind of relationship flowed out, was probably due in some part to me, but more likely based on my skill to pass information to even Bigger people within Billy Big Bank, who were able to make really BIG decisions.

All this changes for the self employed consultant who lives (according to management guru Charles Handy) like a flea on the back of big corporate elephants. Do you remember the old saying about women in business – something like they have be twice as good to be thought of as almost the equal of a man (rubbish incidentally – we all know its three times!!!!) well that’s the same for the self employed, doors don’t open for you as readily as they used too and you are the offering – so you’d better have it planned out and make it add value to your target market or you’re buggered!

Took me four years to achieve the two year plan!

It teaches you real attention to detail because no one covers your back; though if you’re fortunate enough you have friends like Andy the Claret (that’s the football team not drink by the way). They will look at the stuff you do without really knowing what it’s about but still be able to ask you questions that hit the target with rapier like precision!! (More than Burnley FC did last season!)

Self employment keeps your feet on the ground. You lick all the stamps and soon realise that Petty Cash is an oxymoron. But you know that when the job is complete and the client’s cheque is safely tucked away, you alone were responsible for the satisfied customer’s experience.

There’s no calling on IT to support your technological issues, no asking a colleague to do one of the tasks in parallel to speed things along, no sending someone else to the tricky meeting and certainly no saying “he’s in conference now” when you don’t want to take the call!

We’ll be helping Karen and husband Mark start to create an upstairs office space and look forward to welcoming her to the world of SOHO (small office home office). In the early days I used to love working at home, so much so that I’ve just built an office tucked away in the garden of our family house in Cheshire, so I don’t have to drive to the North Wales Office every day if I don’t feel like it.

Working at home is great if you have the self discipline. If you don’t, apparently it’s even better! For some it’s a real throwback to university life when day time TV ruled, afternoons were for sleep and if you had to work, well hey there’s nothing else going on at 2.00am is there?

There’s a trendy trend developing for blokes to go to work in suits and shirts but not to wear ties. You see them around the city thinking they look cool; they don’t know Jack. Home based self employed blokes have been going to work with no trousers for years – how cool is that!! Wonder if Karen will adopt the morning shuffle across the landing in pyjamas at 5.00am to do that thing you haven’t been able to get out of your head since 3.27am when it woke you up!

I wonder if she will find a replacement for the drive to and from work, the familiar tones of Wogan, or Humphries and Naughtie or Allen and Garvey. Will she make Monty the cat a fully fledged partner, and will she stop, religiously, for a daily lunch break and play computer backgammon or Sudoku, just to give her brain a change?

You don’t always consider these weighty issues in Corporateland, nor do you necessarily have to make a commitment to yourself that every week, no matter how you feel, you WILL engage in some form of marketing communication aimed at your target market to keep your businesses head above the parapet.

Here’s a big lesson for the elephants from the fleas. Elephants spend fortunes on all manner of exotic marketing communications (not recommended by this flea incidentally!!). On the other hand, fleas tend to get nearly all of their business by word of mouth and recommendation, at next to no cost, other than a job really well done.

I’ll talk at length with Karen about this, as after 20 years working in marketing agencies in the north-west, she’ll know more than enough business contacts to ring up telling them the story of her start up.

Good luck to her!

Ten top tips for SME marketing

The Chartered Institute of Marketing asked me to knock something up which could be a hand out or expanded into a presentation (or even a rant :-):-)!!)Hope these are of help to someone if only as a reminder there is marketing communications and there is business and marketing strategy. The two are complimentary branches of marketing but need to work together and not in isolation.

1. Each time you are thinking of undertaking a piece of marketing communications, don’t allow your self to do it until you have identified two subsequent communication activities to under take. The main reason most marketing communications issued by SMEs generate disappointing results is that they are one off tactical exercises, not part of a sustained campaign, where core messages are delivered over a period of time through a selection of different media.

2. Understand the type of business you are trying to win when you spend money on marketing communications and be clear about the profits that winning one order will generate. Directly relate this figure to your cost of communications to measure the success rate you need and the ultimate return on investment.

3. How dull is your website? When it has been visited once, what is the motivation for visitors to return? Make your website an interactive communications tool.

4. It’s easy to sit in our offices and factories staring at the four walls. Spend some time drawing up a list of people you know or people you ought to know who could and should be referrers to, and advocates for, your business. Set a target to meet up with at least two of these people a month.

5. Because you are a great butcher, baker or candlestick maker and you know your sector and your organisation inside out, does not mean that you are the best person to write about it. It’s astounding how many good looking pieces of marketing communication are ruined by inadequate copywriting! Use a professional.

6. Following on from this, particularly if you are sceptical about someone else writing your copy, review all your current literature to see how much it talks about you and your company and how little it talks to customers about themselves. Consider changing your messages to make them about customers and not about you.

7. Have a staff meeting. Sit down informally with all your employees and ask them what they would like and dislike about the business if they were a customer. What they perceive today, your customers will perceive tomorrow. Let them pretend to be the owner for an hour. What are the first three things they would do to make the business better for customers? Internal marketing is undervalued in SMEs; the feedback may just surprise you!

8. Review your customer sales for the last 12 months to see which have been your biggest customers, but evaluate their spending with you against their total spend on the type of products and services you can provide. Use the findings to target customers where it is entirely reasonable for you to challenge for a much greater share of their spending over the next 12 moths.

9. Review your business plan. A plan doesn’t have to be a forty page document full of spreadsheets and strategy; it may just be a list of key objectives with a series of simple tasks and milestones. But whatever form it takes, you should have one to drive the day to day activity of your business, which can so often be driven by whatever ‘crisis’ arises first on any particular day!.

10. Go to a trade or industry exhibition with relevance to your sector. Remind yourself what a great sector it is to work in and meet many of the other good people, just like your self, who work in it. Listen to some seminars or workshops and hear other people’s perspective on the issues that you are facing every day. It’s an uplifting and useful business exercise particularly for those of us within SMEs who can end up working in a confined bubble. If it doesn't motivate you seriously consider changing direction!

Stuck in the middle with you?

When I first started studying marketing, I was overwhelmed by the number of theories and models, developed by “experts” to explain why businesses are less successful than they should be. The more I read, the more I realised most have been developed to serve the needs of book publishers and that they have no relevance whatsoever for real businesses, owner managed small and medium sized enterprises who want to understand business and marketing strategy and planning.

But then I have read a lot of books!

And some of the theories and models developed by the great and the good of marketing are absolute belters and are as relevant to SMEs as they are to the multi-nationals they were designed for. I’ve built a toolbox out of them, with nearly 40 different components, that has been invaluable when working with Corve Consultancy’s clients.

So which one is hot at the moment? Well it’s number 16, the rather grandly titled Porter’s Generic Strategies. (Don’t glaze over yet – it’s good!)

Business guru Michael Porter believes that while a company may have loads of strengths and weaknesses relative to its competitors, there are only three types of real competitive advantage you can develop, by being the cost leader, by serving niche markets or by sustained differentiation.

Lots of SMEs that I talk to are not consciously developing their business with one of these strategies in mind and are (if you view the three options as points of a triangle) floundering about somewhere in the middle.

So what do they all mean?

Being the cost leader is about being the lowest cost producer in the industry. Companies who do this often have a broad scope and serve many different industry segments. Companies can get a cost advantage because they achieve economies of scale; have proprietary technologies, or an advantage in accessing key (raw) materials. Cost leaders are often selling a standard product with no frills and they place considerable emphasis on size, economies of scale and cost advantages from all sources.

It’s a difficult long term position to sustain you are always vulnerable to being undercut and having the closest scrutiny on your price offering as the market tries to catch you out. Ryanair is a good example of this type of business. It’s difficult for SMEs to choose and sustain this position. Our resources usually mean that we have low marketing budgets which are vulnerable to competitors and a s re-seller online trading client of mine is discovering, someone else can always procure cheaper using a bigger budget for bulk purchases, and undercut you.

Serving niche markets is all about becoming a specialist to a specific sector. This is something SMEs do particularly well. We develop a specialist reputation concentrating on one or a small number of segments to the exclusion of all others. This allows us to focus and concentrate our efforts to get a deep understanding of our target segments and become acknowledged as the experts. The greater our expertise and the more we demonstrate our effective affinity with the segments, the higher we make the barrier to entry for others.

If possible we want to choose highly specialised niches which are easier to defend against local or international competition than less specialised ones. The difficulty we can face with this strategy is that to serve niche segments in a market leader position SMEs have to provide high customer and technical support, which can be resource intensive.

Sustained differentiation is where a company selects one or more things that many buyers in an industry perceive as important and then uniquely positions itself to meet those needs. The reward is a premium price! You can base differentiation on product attributes, service levels, the method of distribution, even your marketing campaign. But the trick is to make sure the cost of this unique differentiation does not exceed the value of the price premium it commands.

Delivering the groceries to my house in a stretch limo as opposed to a white van may be a unique proposition, but the marginal price is unlikely to recover the marginal cost! Sustaining differentiation can be hard, but SMEs have the flexibility, adaptability and responsiveness to customer needs to be successful with this strategy.

What’s the most obvious downside? Over time, as a market becomes mature, it can be increasingly hard to sustain true and meaningful differentiation.

Many SMEs that I meet are stuck in the middle, trying each strategy but failing to achieve any of them. As a result, they have established no competitive advantage and they are usually performing below average. In these cases, the SME will only earn profits if the structure of its industry is highly favourable (i.e. the conditions are such that it’s nigh on impossible NOT to make money – Ice cream vans in a hot summer, pubs during the world cup??) or if all your competitors are also stuck in the middle (what an opportunity!).

Businesses become stuck in the middle because they can’t decide how to compete, or don’t know how to make the choices. What have you decided to do?

Does the numbers man know what the marketer's doing and vice versa?

I’m talking about SMEs rather than large corporates, because SMEs comprise the majority of all businesses in the UK and also it would also be foolish to suppose that this combination of skills does not exist in abundance in larger organisations. Whether they use it or not is a completely different matter!

Many SMEs have a real scepticism about business and marketing strategy and planning. They get drawn into the process reluctantly and often see disappointing results. This article explores one of the main reasons for the failure of SME business planning and offers a straightforward solution.

When SMEs look for a business plan, they often turn to their accountant for help. After all he’s the numbers man and a business plan; well it’s just a sheet of numbers isn’t it? Something we have to show the bank every now and then to tick a box – right? WRONG!

It often ends up as a sheet of numbers, because that’s an easy way to represent the plan as a summary. But it also ends up like this because it will only be those with a financial understanding that ever get involved in its preparation or analysis. So let’s just follow that process and see what happens.

SME owner – “I need a business plan with some forecasts for the next twelve months”

Accountant – “Great, I’ll knock up an Excel spreadsheet and you can give it to the bank – what’s your turnover likely to be for the next year?”

SME owner – “Well, we’re hoping to add about 15% on top of last year’s figures”

Accountant – “So that’s going to be about £1,200,000 isn’t it, remind me, is there any seasonality?”

SME owner – “No, not really sales seem to be evenly spread”

Accountant – “Well that’s the top line done; we’ll aim for £100,000 of sales each month. OK?”

This is how the process works more times that you can believe! With all the best of intentions, the accountant then calculates gross margins based on historical experience, adds 15% to the general overheads and bob’s your uncle a new business plan for the next twelve months has been constructed.

SME owner is happy, it’s cheap, it’s done, it ticks the box for the bank or other interested parties. The accountant’s happy, it didn’t take long, there’s a degree of credibility in his assumptions and a few more hours to add to the annual bill. The bank’s happy, because the accountant did it and so it must be right, he really understands the numbers!!

But it doesn’t work and nobody seems to care let alone understand the absolutely flawed premise of its construction.

Turnover, the top line of the business plan is not a guess! It is the answer to a series of strategic and tactical marketing questions that the business and its advisers should be asking in the construction of the plan that make the top line the real driver of the business.

A criticism of the role of marketing by many that do not truly understand it, is that it is hard to measure and as such an opportunity for the creative staff to run riot without accountability! Nonsense!

The biggest misconception about marketing is that it is just about communications rather than the strategic planning of the business. Decisions about target segments, competitive positioning and routes to market should lead any promotional activities, but again SMEs are seldom trained in these areas and consequently indulger in haphazard promotional activity, often spurred on by so called marketing consultants without a specific qualification to their name and unable to differentiate their Porter from their PIMS.

But hey, we’re in danger of forgetting the bean counters while all this infighting is going on! While we’ve been debating strategy and tactics, they have created the top line, calculated the gross margin, racked up the overheads by 15% and re-calculated net profit before tax and, with a flourish, added on a headline cashflow forecast for good measure.

There on the table is a conventional financial model and the owner and his advisers are all patting each other on the back for another job well done. But hang on. Where is the correlation between top line sales and the marketing budget, identified somewhere amongst the vast array of overheads to the business. Where is the marketing activity forecast, sitting below the cashflow and tying in activity, to budget spend, to top line income in a structured, time sensitive, numeric model based on robust conversion ratios.

Do what! Now the bean counter understands what we mean, but many marketers are totally fazed by the prospect of converting activity to scheduled and budgeted planning, but this is the key to the plan and its future success or failure.

So here’s the question for marketers – what do you do, when and at what cost, to deliver the top line income of £100,000 in October 2007 (or any other month’s target for that matter)?

Show me a model of the communications activity, show me the metrics, show me the budget allocation in the financial model, show me the sensitivity analysis and show me plan B.

In every business plan drawn together by SMEs and their advisers, it is critical to analyse marketing communications activity, (direct marketing, public relations, personal selling, sales promotions and advertising) and all the sub activities therein to set out in within the financial model, the individual activities and costs that WILL generate the top line.

Then let’s shift the argument away from the measurement and effectiveness of the marketing team (this will now be proven) and start looking at just why overheads never stay in budget or the cost of goods sold seems to edging above the predictions. Answers please Mr Accountant!