Former professional boxer Mike Tyson wisely stated, “Everyone has a plan until they get punched in the face.” Unexpected blows, such as a global pandemic and recession, have marketers evaluating their strategies to learn how to change, respond, and adapt during times of crisis.
Today’s guest is Tony Guarnaccia, a brand consultant, founder, and author. He knows how to turn businesses around and out of tailspins. If you don’t know what you don’t know about how to grow a business, you and your business will fail.
Some of the highlights of the show include:
- Bakery 2.0: Bounce back by studying marketing, business, and entrepreneurship
- 10-Year Journey: If you don’t know, follow those that do to grow a business
- Resources, Strategies, Tools: Learn what you don’t know; teach what you learn
- Right or wrong decision? Reduce marketing budget when revenue drops
- Rules to Follow:
- Make business sustainable and maintain profitability
- Maintain advertising spend in marketing; make cuts elsewhere
- Expand market share due to less competition and lower acquisition costs
- Red Flags: Results that can or can’t be controlled to drive growth
- Results Loop Framework:
- What markets are you serving? Be in the right niche
- What are your offerings? Identify products/services that create traction
- How do you grow revenue? Create trust, value, and loyalty
- Pain Points: Problems clients experience are opportunities to sell, provide value
- Supply and Demand: Trigger events and money are available, but shift and pivot
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Ben: Hi, Tony. Welcome to the show.
Tony: Thank you so much for having me on today. I’m really excited to be here.
Ben: Yeah, absolutely. Before we get too far along, I know you have a super interesting background just in terms of how you got to where you are today. Would you mind taking a moment to just introduce yourself to our audience, and explain a little bit about what you do and what your background is like?
Tony: Sure, I’m happy to do that. I grew up in a small business. My parents had a small business—a small bakery, and they were fantastic bakers. Unfortunately, they didn’t know what they didn’t know about growing a business, and so at the age of 12, that business failed. We lost everything—the house, the car, and even the dog. I have to give my dog to my oldest sister. It was really tough, and we moved into my oldest sister’s basement for a period of time until we were able to bounce back.
We bounced back, and then years later, I went to college. I went there to study business and focus on marketing as well as entrepreneurship. I left there and started a bakery round two. With that bakery, we were able to take a cake, put a photo on it as a promotional product piece, and also as a gift and mail it anywhere in the country.
With that, we got a lot of traction. We had an award for Best New Product of the New York Incentive Show. We were able to mail cakes to Microsoft, Oracle, and even did some cakes for Jennifer Lopez and Jay-Z. That was pretty cool, but then I found out that I didn’t know what I didn’t know about growing a business.
Even though we had all these things going for us, that business failed as well. I asked myself the question, clearly, I don’t know what I’m doing, but who does? Who knows how to grow a business? And that’s when I went on a 10-year journey to work with the best companies in the world. Companies like Google, ADP, Ford, General Motors, a whole list of companies. And now I’m teaching what I learned—the strategies, the tools, the tactics, and the resources that the best companies have and bring it to small and medium-sized businesses.
Ben: Very cool. That’s awesome stuff. This is something I think that you can speak to both anecdotally from personal experience, and also more broadly and theoretically. Businesses tend to reduce their marketing spend when their revenue drops.
I think it’s almost become a cliche at this point that when things aren’t going well or when recessions hit, marketing and advertising spending is one of the first things to get the X. Do you believe (in your opinion) that’s a mistake, and if so, why do you feel that’s the wrong way to go?
Tony: Yeah, that’s a great question. It depends on the status of the company. Rule number one is to keep the ship afloat. You want to make sure you’re sustainable because if you don’t have a sustainable business, it’s not profitable, then you don’t have a business, you’re going to go out.
Rule number one and make sure you maintain your profitability so that you can sustain yourself. Assuming that you have some level of profit—and you might have to cut in other areas. Sometimes (sadly), you have to cut the staff, you might start outsourcing, and things like that. If you can, I strongly advise maintaining your advertising spend and your marketing. The reason being is because now is the greatest time to expand your market share. There are a couple of reasons for that.
Number one, it’s less competitive because everyone else is cutting as well. If you look at, for instance, Google or Facebook, they’re essentially auctions. If there is less competition, you’re naturally going to have a lower cost per click, or at the end of the day, a cost per acquisition. Because A, your costs for the click or the visitor is lower, but also because there’s less competition. You tend to have a lower cost per acquisition. The acquisition cost is better.
Number two, because of that, you can expand your market share. You can grow much faster than your competition. If you have 10% of the market, you could conceivably double it in a very short period of time because there’s no competition. That’s another reason you want to maintain it if you possibly can.
Ben: Sure. That makes a lot of sense. That’s a pretty clear and concise way to sum up the opportunities versus the risks there. Right now, I think with everything that we’re dealing with the COVID-19 pandemic and all the ways in which that has upended our normal ways of doing pretty much anything. There are some businesses that are thriving, some that are struggling, and some that are maybe doing okay right now but the future looks a little murky. Depending on what industry or vertical you’re in like you could be dealing with a wide array of different circumstances right now.
For a marketer who’s working for a company or for some organization, they may or may not know—depending on how transparent that company’s culture is—what situation that business is in right now. What (in your view) would be some red flags that maybe marketers could look out for in order for them to develop an accurate understanding of where they stand right now, and whether or not that organization could be looking at a crisis in the near future if they’re not in one already?
Tony: Obviously, you want to look at what’s happening around you. Are people getting laid off? Are receivables coming slower? Is payroll tighter? Are they reducing hours? Things like that can be a problem. I think as a middle manager or someone that’s working for a bigger company, there’s only so much you can control.
A lot of times when I talk about this topic, I’ll talk about cash flow, profitability, and things like that. If you’re in middle management, you don’t have control over that. What do you have control over? Well, as a middle manager, what I would be thinking about is how do I add the most value? You want to position yourself as having the most value. You want to make sure you’re aligning yourself with really the most important thing for a company, which is cash. What does that mean, though? It sounds great in theory.
Well, if you’re a salesperson, that’s pretty easy to tie. But as a marketer, how close can you get to the sales activity? For instance, can you track your marketing activities down to the sale? If you’re in lead generation, how closely can you tie the effort that you put into the end result because, at the end of the day, everybody wants the result? They want the value.
You want to prove to your management what that value that you’re providing is, and the best language is sales, revenue, and profitability. How are you proving that? Or on the flip side, maybe you can’t control the sale. Can you control the costs?
Can you say, look, per our discussion before, I was able to reduce our advertising spend by 20% because we’re buying clicks at a cheaper rate. You have to know your numbers. You have to know what you’re doing and be able to hold that accountability, not just to yourself but to your team, to the people above you, and below you. The more you have a dial on that the better position you’ll be in to weather this storm.
Ben: For sure. That leads well into my next question. Let’s say I am that middle manager, marketing manager at some hypothetical company. Let’s say I need to go into a conversation with the C-suite, the CEO, or some stakeholder who’s above me on the org chart to make the case for marketing, and why marketing spends shouldn’t be cut for reasons that are bigger than just I want to keep my job.
For a marketer in that position—you talk about showing value—are there some specific talking points or some specific areas that you would recommend that person to focus on in order for them to show, look, marketing can help get us out of this thing that we’re in right now before that spend gets cut.
Tony: Absolutely. Again, you have to know your numbers, have the data. A lot of times, at the C-suite level, they don’t actually have that information. Even though they’re executives, they may not have the level of detail that you have, so you can add value that way. But also, along those lines are actually almost the opposite, you want to make it succinct.
When you’re talking to someone at the C-suite, you just want to have the specific numbers. Here’s the impact on sales, here’s the impact on projected sales, and here’s how long it takes for us to typically close. If I was in a position, I’d be very familiar with analytics, whether using something like Google or something more robust like Adobe has.
I would make sure I have a CRM system, marketing automation. Know your numbers and how everything impacts it, and come to lag too. You might have a great return on investment, but if it doesn’t happen for six months, because you have a long sales cycle that may be a difficult thing to sell too.
The faster the cast the better, especially in times like this. If you’re looking at and you have influence over what you’re marketing, I would focus on products and services that have a quicker turnaround. Not as much as on the profitability or the revenue of it, but things that can turn very quickly, because it’s easier to make your business case.
Ben: That makes a lot of sense. Let’s say I’m the same hypothetical marketer, and I’ve bought myself maybe a little bit of time. Or maybe in a better case scenario, I have the trust of people calling the shots and marketing is not going to go away, it’s not going to get cut. But let’s say that company got to be efficient with what they have and they need to get a result quickly.
What would be some things that you would recommend that marketers do in order for them to identify what their strongest opportunities might be in the short term?
Tony: That’s a great question. I created a framework called the results loop. It really looks at the six factors that drive growth in any company, any size, any industry, et cetera. The first question you want to ask is what markets am I serving? Am I in the right niche? Let’s say you’re in B2B. There are so many different segments in that.
I would look at your past historical efforts over the past six months. I won’t go back too far, because the world’s very different today, and look at what’s gotten the most traction? If you’re looking at leads, segment your audience, your lead data, and say, okay, where have most of the leads come from? Is there a specific niche within B2B?
I would look at niches based on the kind of company, maybe their position. Do I sell better than marketing managers, the directors, the size of the company, how many employees they have, and things like that? You want to identify your markets first, look at where you’ve had success in the recent past, and then extrapolate that into the future. Again, you have to know your numbers. You have to have your data setup. This is assuming you have the analytics, everything in place. That’s question number one.
Question number two would be the offers you have—the offerings, the products. Which products and services are gaining the most traction along with the market? They’re married together. You can ask yourself the question, can I sell more into existing markets? Can I have my existing customer base buy new products?
A lot of times you get super low hanging fruit by going back to who you already have worked with in the past. Doing the email campaign to upsell them, cross-sell them another product you already have. You’ve already got the trust there. A lot of times, you can get quick revenue there. And then your value. Why would people buy from you as opposed to anyone else? That ties a lot of times into your offer, how you position yourself. Those things like that are very, very important.
Really, when you’re growing your company, the three factors that focus on your revenue growth is how to get new buyers—the number of buyers, how to increase the lifetime value of those buyers, and then finally, how do you drive loyalty? Meaning, how do you get them to come back and buy again and again and also drive referrals? Referral campaigns are another thing I’d be looking at right now because that’s a very low hanging fruit that has a very low cost per acquisition.
Ben: One of the most important points Tony shares during the course of this conversation is asking yourself the question of how close you can tie marketing measurement to sales activity? When companies cut marketing budgets, even when times aren’t tough economically, just like when budgets need to get cut for whatever reason. It’s often because whoever is making decisions for the company or the organization’s finances, just doesn’t understand what marketing is doing to drive value or to justify its own existence within that organization.
That’s often because marketers don’t know how to adequately and accurately demonstrate that value, but it doesn’t necessarily mean that they’re not creating it, or that what they’re doing isn’t effective. It’s just, whatever you’re doing may as well not exist if you can’t directly tie the activity to some revenue-creating activity.
Depending on what you’re doing right now, you might not need to change your tactics all that much. As long as you can get better at understanding and communicating the value that marketing creates, and doing more of the things that are driving the most of that value for you. Now, back to Tony.
One point that would be really interesting to dig into there, so it’s like the concept of customer lifetime value. Obviously, if you can increase that along with some of these other things that you’ve mentioned, you can get more revenue from the customers you already have, maybe even strengthen those relationships, and you’ll weather this storm together (perhaps).
Since our present circumstances with the pandemic, since that’s affecting everybody, no matter what industry you’re in, odds are your customers are feeling the pinch in some way too. Or at the very least, at a bare minimum, their behavior has been changed in some fashion. Which could impact their willingness to buy, their purchasing habits could force a change in their needs, or all kinds of different variables could be impacted.
In your view, what a marketer needs to ask themselves or need to do to better serve those customers who might be in the same position there. How do you strengthen those customer relationships or how do you extract more revenue from existing customers who might have less money to go around toward anything?
Tony: That’s a great question. It really depends on the company, the size of it, and your ability to reach out to them. But I would tap the sales team if it’s a bigger organization because they have the relationships, and they’re talking to them. I would call the people that are in the sales organization and ask the questions.
What are their new pain points? What new problems are they having? Because the problems that your customers or clients are experiencing are the opportunities for you to sell. You want to look at that. You want to see how can I build a community. Now’s a great time to be launching groups, whether it’s a Facebook group, a LinkedIn group, and gang your customer and clients in there because that’s a great testbed to identify what they’re self-selecting these issues.
Again, that’s something you can monetize, potentially, and you can add value. You always want to live with value, because when you live with value, you’re going to build more trust and provide sales opportunities. You want to go right to the sale. That’s a big mistake.
And then the other thing you could do is send out surveys. That might be tougher in this environment, but if people have the bandwidth, a survey is useful because then you can ask the questions directly about what their new problems are and how you might go help them.
Ben: Sure. I imagine once you have that data like you’re getting that straight from the customer in their own voice, and then you can make a very direct connection between what their problems are and what services, what products, or what kinds of offers you could provide to them. I think that’s a great tip.
Tony: That’s a great value that you provide to the C-suite. You go back to the C-suite and say, look, we surveyed. And then all of a sudden you’re positioning yourself and becoming more and more valuable within the organization, which will help you rise above these challenges.
Ben: It almost seems like if you’re in middle management in this hypothetical company that we’re using as an example here, it sounds like you have to think hard about how you’re going to provide value in two different directions. Obviously, first for your customers, but then by driving more value for your customers, that’s going to then give you something that you can take back to the C-suite.
Tony: Absolutely. The other thing you could do, I’m just coming to mind now is always be looking at keyword research data. Because with keyword research data you can see how things have changed, that’s a very useful report. Also, with a lot of the competitive intelligence tools now, they’ll also give you the questions that are being asked.
Maybe you’re in event management. People are now maybe typing in, how do I do virtual event management? You go back to your boss and say, hey, look. People used to search for how to do event management. Now they’re saying, how do I do virtual event management? Maybe we should have a virtual event, seminar, webinar, or something. The data is always the summing point because it gives you something factual that you can go and solve that need.
Ben: Yeah, for sure. The last question, I’ll throw your way. Let’s say that a marketing team’s budget and as part of the budget, potentially some personnel do get cut. Where should the remaining staff focus ensure that they’re able to make the most impact with fewer resources than what they may be planned on having at the start of the year so that they can help turn that company around and rebuild their team and help get that company back on a path to growth?
Tony: You always follow the trends, so success begets success. Again, like I said before, I would look at where you had the most sales and leads prior, and then do more there. Don’t try to recreate the wheel unless you have to do a completely different pivot, that’s a different circumstance.
For the most part, if you’re staying the same trajectory—which you don’t have influence over that, anyway. That’s going to come down to you. But assuming you’re doing the same market, look at where you’ve had the most success and do more of that.
Ben: Yeah, I think that’s probably pretty sound advice. If you’re not really in a position to be throwing Hail Marys, then just think about what you can do reliably and consistently, maybe.
Tony: Yeah. Now is a good time to look at conversion optimization. Is there a way to get higher output from what you’re already doing? Look at your website and say, can I get a higher conversion rate by changing the copy, by changing the headline, and by changing the imagery.
I would look at what has the lowest cost? Ultimately, what you want to be able to do is say, look, here’s our lifetime value that we’re projecting. Here’s our cost per acquisition. My job is self-funding because it’s paying for itself. It’s like a slot machine. You give me $100,000, the outcome is $300,000, and here’s how I can prove it. All of a sudden, you’re going to go from being on the risk of being out the door to being their most valuable asset, and that’s how you rise quickly through the organization.
Ben: For sure. I think what’s great about that and thinking about that way too is that once we’re all on the other side of this thing and the pandemic is something that is starting to look more like it’s in our rearview mirror. Whenever that happens or that time comes to pass, if you’re able to do those things now, then I imagine you’re going to be all that much better off once circumstances improve and your customers suddenly have more money to spend.
Tony: Yeah. Probably the most recent example I have was back in 2008 when we had the crisis back then. I was in the automotive industry. I literally remember going to Ford Motor Company, and they had every other light bulb unscrewed to save energy.
That’s a great model of what great companies do. They’re looking at every cost and making sure that they’re saving as much money, and that says a lot. Even if it’s not that much money, relatively speaking, it makes a statement. But on the other side of that, they had Cash for Clunkers all these government programs just to survive.
On the other side of that, there was a huge boom in automotive sales because there was nascent demand. Demand is still there, it hasn’t exploded yet. A lot of times, on the other side of these crises, there’s a great opportunity, and you want to position yourself to be able to capitalize on that when it does rebound.
Ben: For sure. Here’s the actual real last question I have for you because that just sparked an interesting thought, or what seems in my brain to be an interesting thought. I think that’s a great point that you make about what demand was like for vehicles back in the recession in 2008 because it’s not that people stopped needing a car.
It was just maybe for a while they didn’t have the money to buy one, and so that purchase gets kicked down the road until people have the money to buy the vehicle. Would you say that’s an accurate understanding?
Tony: Yes. I’m a believer that money is always there, it just shifts. Right now, a lot of the money is shifting to Jeff Bezos, for instance. Money is still there, it’s just flowing to different places. But I can tell you back then being in the center of this automotive industry at that point in time, there was a shift from car demand.
Guess what went up—service, and parts. People retain their car, but that means it was breaking down longer because the people that would have normally bought it, they’re holding on to it a little bit longer. All of a sudden, the cars are breaking down, so they’re still spending money, but they’re spending it in different markets. Which is why I mentioned the first two sections of the results […] are your markets and what are your offerings?
In the automotive world, we shifted from selling new cars to focusing more on service and parts. We still were able to stay afloat through those additional revenue streams.
Ben: Yeah, it’s super interesting. I think that’s a great way to help visualize that concept and actual practice. The question I want to get at, and I appreciate you taking the time to clarify that a bit. If you’re a marketer or you’re in business at all (just in general) do you have any advice or any insight into how a company might be able to project when demand will come back for one, and in which segments of the business where they think that demand is going to grow?
Tony: Yeah. I think competitive intelligence, again, is very useful. Because for instance, if you know that your sales lagged by a couple of months because of the sales process, what leads to that? One of the concepts I teach in my training is called triggers. There’s usually a trigger event.
If I am going to buy a new car, there’s a trigger event. Usually, I got a new job, had a baby, and got laid off on the flip side. Certain things happen. What you want to do is look down on your buyers’ journey. You really want to know your buyers’ journey, you want to know your persona and what triggers their needs.
If you can look at the triggers, you can project demand. When you look at the trigger, that’s where keyword research comes into play, competitive intelligence. Again, I’ll go back to automotive because it’s very easy. Everyone has a car (most people at least). Before they buy that car, there’s going to be trigger events for those things I just mentioned—jobs. Maybe even a better example is babies. They pop out nine months later, but what happens before that? They’re searching for cribs and then searching for how to get a doula. There are things that happen prior to that.
If you take that into the context of your own business as a marketing manager, for instance, know your buyers’ journey and the triggers. When you look at those triggers, you can project that, and that’s something you can bring to your executives.
Ben: Sure. That’s great stuff. Before I let you go, where can our listeners find you online?
Tony: Yeah. If anyone wants to connect with me, probably the best place would be LinkedIn. You can go to my website meettonyg.com. At the bottom of that, just scroll down, there’s a link to connect with me on LinkedIn. If you have any questions I wasn’t able to get to hear today, I’m happy to answer them on a call or send me an email.
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