fbpx

The worker shortage: how to attract great people

The Great Resignation and current worker shortage may seem like a roadblock to getting great talent, but if your company has a strong culture and values, you may actually have a great opportunity. By clarifying your focus, aligning your values with what your employees value, and communicating it clearly, you can attract people who are looking for what your company already does well.

A word of warning: if you have a toxic culture, floods of backchannel internal communication, and values that drive self-interest, you can stop reading now. Nothing in this article will help you address worker shortage until you attend to those deeper issues.

All businesses are feeling it right now. The worker shortage. The Great Resignation. In the last dozen conversations I’ve had with family businesses, it is the same refrain: “We don’t lack opportunity. We lack people.”

Or, more specifically, the right people.

The problem is, when a qualified workforce seems so hard to come by, holding out for just the right fit seems like a luxury from a bygone age.

But like in all challenges, there is an opportunity here for businesses who have been doing hard work on their culture, operations, vision, and values over the years.

It is time to make all of that investment, all of the blood, sweat, and (likely literal) tears pay off.

As I often repeat, your brand is your reputation. You can’t control it, but you can influence it. And in the case of employer branding, the process of influencing it is the same as for a customer-facing brand.

Step 1: Get clear on your focus, and make sure you are solving the right problems in the right order.

I often hear many companies asking the same question: what platform should I be using to attract the right people? Indeed.com? LinkedIn? Zip Recruiter? But it is the wrong question. Or, at least, a question that can’t be answered without raising a number of other questions. (It is comparable to that other question I hear every day: Should we be on TikTok?)

You need to get clear on your audience, your goals, your media, and your message. It may sound basic, but in my experience, these basics are rarely applied to recruiting and employer branding. Our team at Six-Point Creative specializes in providing family-owned businesses with this clarity. If you’re feeling unsure where to start, schedule a discovery call with us to get unstuck.

Some questions to ask that will quickly clarify your focus:

  • What does success look like? What would you be seeing, hearing, and feeling if you had an employer brand that was attracting the right people?
  • Who are you trying to attract? Think about the people in your own organization who are successful, and also what you are trying to accomplish that might require different skills and experience.
  • Where have we seen success attracting great people in the past? Look for patterns in what has worked.
  • Where have we made recruitment mistakes or wasted time and money? Learning from the past can make sure you don’t repeat it.

In our clarity exercise with a client recently, we dug into their recruitment efforts addressing the worker shortage and realized that referrals from employees have been by far their most successful hires, both in terms of skills and cultural alignment. Employees hired out of a slim pool of online candidates have been hit or miss at best. But the number of employee referrals they have been getting has been trending downward over the years.

This line of inquiry surfaced a new initiative: Get the number of employee referrals up.

It gave them laser-like focus on the next steps, and stimulated a lot of creative thinking as to how to get those numbers up: employee referral contests, best place to work awards, reviewing the referral bonus structure, an internal recognition and communication plan, referral templates and training, and more.

If this client had jumped to the solution before digging deeper, they could have wasted more time and money advertising on the already saturated job boards that they knew already would produce only mediocre results.

Step 2: Understand how to align your company values to what your potential employees value.

I know this may sound like a lot of vague nonsense, but this is truly the biggest opportunity staring family businesses in the face right now.

Quit rates right now are at an all-time high, contributing to this large worker shortage. In August 2021, a new record of 2.9% was set, meaning 4.3 million workers quit their jobs. This is the highest rate since quit rates started being tracked in 2000 by the Bureau of Labor Statistics, when the quit rate was 2.4% or 3.25 million workers.

Why is this Great Resignation happening? Both because people’s values and attitudes have shifted over the past two years, and they now have the ability to do something about it.

Money and perks are no longer the only factors driving employment decisions. Like many things, COVID didn’t create this change, but it did accelerate the worker shortage and amplify it. Flexibility, growth potential, family time, and enjoying one’s colleagues are now front and center, and thanks to pandemic-relief checks, a rent moratorium, and student-loan forgiveness, people have more freedom to quit jobs that they hate and find something else. As Derek Thompson, author of Hit Makers, said: “This level of quitting is really an expression of optimism that says, we can do better.”

So how can you position your company as that better option?

Branding is the alignment of your product’s value to what your customers value. In this case, the career potential and working environment are your product. You need to know what your ideal potential employees value, understand what your company offers in terms of value, and look for connections between the two. Then you need to communicate that overlap in a way that makes the prospective employee the hero, not your company.

I have seen a number of companies take the first part really seriously — they articulate what their internal values are, and what they expect from employees. This is like a marketing campaign that talks all about the product or service from the point of view of the engineers or experts. It might work if the category is not very crowded, but we are in a different level of competition. Now you need to reach that next level of marketing, where you are talking about your business from the “customer’s” point of view. How does it fit into their lives? How does it speak to their hopes or aspirations? How does it connect to their personal values?

One of our manufacturing clients had a slew of retirements of long-tenured employees, and for the first time found themselves with a majority of employees who are under 35, and who are excellent workers with a lot of promise. We are interviewing and surveying these employees to hear what they are looking for in their job, and are going to turn these conversations into both some internal training and retention initiatives as well as an external campaign to attract even more new young talent.

Side note: If you are rolling your eyes at this, you aren’t alone. Yes, it would be nice if providing a steady paycheck was enough, but it isn’t. Not if you want to be a high-performing company with staying power. Is it good enough to provide a mediocre product these days? Of course not. Your competitor would eat your lunch. And in this case, the job is your product.

Step 3: Communicate the heck out of your value, and how it connects with your audience.

The exciting part of all of this is that family-owned businesses have always provided more than just a paycheck. Now it is finally that “more” that people are really looking for.

In the old model, you would need to compete with the deep pockets of larger corporate competitors. Now that people aren’t only considering wages, family businesses who can articulate just what makes them special places to work actually can have a competitive advantage.

80% of employees surveyed by Edelman value and expect wage growth, training, career growth, and work which they find interesting & fulfilling from their employer. Respondents answered you would either need to pay them a lot more (42%) or it would actually be a deal-breaker (32%) to work for a company that does not offer them.

Similarly, 74% of employees expect employers to offer a voice in key decisions and a culture that is values-driven and inclusive.

If your company offers these aspects, make sure you are talking about them in ways that are concrete and easy to understand for your prospective employees, and that your current employees can speak to them as well. And be sure to talk about the family aspects of your business. In the U.S., family businesses enjoy a 24% trust advantage over businesses in general, which is a major leg-up on the playing field right now.

We have seen a marked difference not just in the response rate but also in the candidate quality for job postings that start off speaking to what the employee is looking for and is passionate about (in plain language) vs. the traditional ads that lead with what the employer is looking for or industry jargon.

So, to recap, here is the game plan to find great talent during this worker shortage:

  1. Get clear on where your best opportunities are for attracting right-fit candidates beyond just the job posting platforms and whether or not to use a recruiter.
  2. Find connections between what your company already offers and what your right fit candidates are looking for. (Don’t be afraid to have some conversations about this with both current and potential employees.)
  3. Articulate the value connections in clear language in all job postings, website content, and internal documentation, making the prospective employee the hero. Clarity and consistency is critical.

If this sounds great, but executing it feels overwhelming or impossible with everything else you are juggling…schedule a discovery call to see if our Solve for Y process might be a fit to help you accelerate your employer-of-choice branding efforts.

Breaking Through Business Growth Plateaus

Cap’t Jim Palmer, best known internationally as the Dream Business Coach, is the creator of the Dream Business Mastermind and Coaching Program and host of Dream Business Radio podcast, interviewed Six-Point’s CEO, Meghan Lynch, about helping break through business growth plateaus.

Hosts & Guests

Jim Palmer

Meghan Lynch

 Share Video

podcast transcript

business growth plateaus

Jim Palmer:

Good afternoon, everybody. This is Captain Jim Palmer, the dream business coach coming to you from North Carolina as we slowly make our way north to the Chesapeake Bay. I’ve a wonderful guest today, Meghan Lynch and Meghan actually lives in the town where I grew up. It’s a very small world. Meghan is the founder and CEO of Six Point Creative, a brand strategy agency that helps second stage companies’ breakthrough growth plateaus, which is an interesting thing as part of her mission to help small business owners challenge the Goliaths, the behemoths, the big box or whatever it is in your niche. Meghan has served as an expert advisor to second stage clients in a wide range of industries from fast casual restaurants to industrial manufacturers. Meghan was named an enterprising woman of the year in 2019 and enjoys testing her limits as an endurance runner. Wow. Meghan, welcome to the show.

Meghan Lynch:

Hey, thanks for having me, Jim.

Jim Palmer:

It was so interesting, I would have killed half an hour just talking about Springfield, Massachusetts.

Meghan Lynch:

I know. I know, that was fun.

Jim Palmer:

It’s such a tiny town. My goodness. So anyway, so you were born and raised in Springfield, East Longmeadow?

Meghan Lynch:

Yes, indeed. Lived most of my life there.

Jim Palmer:

So, you graduated from East Longmeadow High School. And then did you go to college?

Meghan Lynch:

I did go to college. I went to Saint Anselm College in New Hampshire and went to Boston College for my master’s.

So I was an English major. I had no desire to be in business. I’m not even sure how and why I got here other than I was going down a Ph.D. track and kind of looked around and was like I think academia is like more corporate than corporate America. And I’m kind of like in my day job in marketing more and that was kind of all she wrote. My kind of standard joke is that I learned to read businesses instead of books, but kind of same skills of seeing patterns and kind of asking good questions and stuff like that.

Jim Palmer:

It’s so interesting, this will be episode 448 so I’ve interviewed a lot of people and I’m so amazed at how many people went to college for something, whether it’s accounting, lawyer, political science and they turn into an entrepreneur. It’s like, well, so much for that education, right? Or I’m sure maybe it helped in some way, so you didn’t have any parents or grandparents, did you have any entrepreneurial role models at all?

Meghan Lynch:

No. It’s funny, my mom was a teacher and my dad is an Episcopal priest. So, we were about as far away from a business mind as you could get.

Jim Palmer:

So Sunday morning you definitely went to church.

Meghan Lynch:

Exactly. Like it or not, whether I was awake or not, I was pulled out of bed, for sure.

Jim Palmer:

Oh, that’s funny. So when did you start Six-Point Creative? And was there some kind of a big event in your life? I interviewed somebody, David Phelps who just wrote a book and he talked about a lot of entrepreneurs who have a cataclysmic event, some people lose their jobs, some people it’s just whatever it is. What prompted you to say goodbye to the every other week paycheck?

Meghan Lynch:

Yeah. So for me, it was being kind of young enough not to know any better. I was working with my partners who I eventually started Six Point with at another agency and they got it, well, I kind of was cheerleading in the background for them to go out, do your own thing. You guys can do this. I’ll come work for you. And so they finally were like, “No, we’re going to do it. And we want you to come with us, but come as a partner, not as an employee.” And I was like, “Sure, yeah, why not? I don’t have anything else going.”

So, we just kind of left from there and they were both much more into the doing of the work. They were more like the creative types, writer, and designer team and I was more like working on the business and leading the business. So I really started to just get into that, the more I learned and kind of that trial and error, the frustration of learning on the fly and then realizing that there were people who could help you do it smarter, faster, better.

Jim Palmer:

So were they the creative ones and you kind of ran the business?

Meghan Lynch:

Exactly. I’ve always liked strategies, so I would kind of do sort of strategy consulting, and then as I started to get more knowledge about how to run and grow a business. My partners have both retired and now I’m in my own work. I really bring the business strategy and the brand and creative strategy together and that intersection of that is my sweet spot.

Jim Palmer:

Got you. Are you the rainmaker, are you the one that brings in the business, or is there somebody else?

Meghan Lynch:

Yeah, for the most part, I do the relationship development and we’ve got a bit of a system behind me, but for the most part, I like to connect with people on a personal level and we don’t have a ton of clients, we kind of handpick the companies that we want to work with. So it’s a lot of fun to meet people and get to know their stories and see what we can do to help.

Jim Palmer:

When you started out Meghan, did you look for clients locally in East Longmeadow, Longmeadow, Springfield, just keep going out from there? Or did you, obviously with the internet, you can attract clients anywhere.

Meghan Lynch:

Yeah, I mean, again, kind of this gets into sort of like my entrepreneurial journey and kind of where now Six Point is focused but when we first started, we were very kind of like general full-service marketing. We just had local accounts, in Western Mass and Connecticut and kind of stayed pretty close to our own area. And we’ve just got a reputation of being pretty easy to work with and providing good values. You kind of grow organically just through that word of mouth, somebody tells somebody, you pick up another client, you add another employee.

Then it was also probably about eight years in, we just hit a plateau where it was like, you kind of tapped out all of the companies that you want to work within the area, and you kind of start to hit the boundaries of your own network, you kind of know all the people who you’re going to know.

For us it was kind of like as my partners were starting to talk about transitioning out of the business, I was trying to decide like, well, they’re the real creative brainpower here, what the heck is this company going to be when it’s just me? So I took those two problems and sort of mushed them together and realize that as I was kind of working on what do I need to do to grow and scale this business and kind of lead it into its next generation of our business growth.

I started doing a lot more peer learning. Like I know you lead a mastermind group, those kinds of groups where you just start to hear from other business owners who are ready to be vulnerable about what they’re experiencing.

And I realized that number one, I wasn’t terrible at my job, and number two, that we were a thing that was called a second stage company and we had very predictable business growth pains. As soon as I learned that I was like, oh man, why didn’t somebody tell me that this was going to happen? I could have been prepared.

Jim Palmer:

It’s almost like when the doctor finally gives a name to what you’ve been experiencing.

Meghan Lynch:

Exactly. Just that relief of having it named and then you can move forward and problem solve it once you know what it is, once you have that diagnosis, it’s like, okay, well, if I’m this and there’s a solution to it, well now I’m just going to implement the solution. So that was kind of what we started to do with the company. And that was where I really focused Six Point on brand strategy and helping companies solve positioning problems to kind of unlock that business growth because that was a big game-changer for us, that kind of focus and expertise.

Also figuring out oh, I actually love these people who I’m in these peer groups with, they’re good people, they care about their communities. They care about their employees. They give back, they’re working super hard and just trying to do what they love. Then I would be talking about brand strategy, kind of bringing that to the peer group. Some people were like, “Oh, this is really helpful. We’ve never heard this before.” And I was like, maybe I can kind of combine these, these two things that I love and kind of make that sort of the next generation of Six Point. So that’s what we’ve done.

Jim Palmer:

So interesting in that term, a second-stage company. In one of your blog posts, I was checking out your website, it’s like, what the heck is a second stage company and I totally get it, but a lot of people might be going, what is a second stage company? Why don’t you explain that a little bit?

Meghan Lynch:

So a second stage company usually starts around when you have 10 employees, but the definition of is 10 to 100 employees, about a million to $50 million in revenue. Again, that varies a lot based on the industry so I find the number of employees is probably a better marker.

Basically what happens is you just start to experience different kinds of business growth pains. You probably grew organically and got business organically for a certain period of time and then all of a sudden the things that used to work so well when you were starting out now just don’t have the same result. So you’re kind of like, oh my gosh, we used to send out this mailing, or I used to go to these events and it used to be so meaningful. And now I’m not getting the same lead or sales results or business growth.

Or you might find you’ve kind of tapped out a niche like your food company that’s overly invested in the restaurant business and you need to diversify into retail or family business that’s kind of grown over time into a certain market.  Then you realize, oh, there’s this whole new opportunity to do what we do in this market over here. But you’re not really positioned to like go after that business. So you start to kind of hit those business growth pains.

Then the other big things are systematic things you need to delegate the brand, the marketing, the sales, but every time you let it go as the owner, founder, other people just don’t do it as well and so it’s not as effective. It just kind of reinforces these patterns of see, I can’t give these people anything and this is why I have to stay involved. Nobody knows how to do this better than I do. When really it’s a matter of clarity. You’re not able to articulate what you want and how you want it and what the brand is and what it stands for in a way that other people can access it. It’s still kind of living too much in your head.

So,  that’s what we work with owners and founders and teams to do is to start to pull those things out of that first-generation and start to pass it on to the second generation, whatever that might look like. It’s really fun work because it both empowers, let’s say like the marketing coordinator or the salespeople who have been frustrated right along with the owner. It also helps the owner take a step back and really enjoy watching their company grow and flourish without them having to work so hard for every single lead, every single sale, all those fun things.

Jim Palmer:

So you mentioned, I have the Dream Business mastermind and I’ve been coaching for 12 years. And it’s interesting to me that one of the things I’ve noticed after 100 or so clients is that they often don’t know what they need. It’s like they’re drawn to you because they have a prior relationship, they’ve heard of you or they see what you do, but then in the end they kind of need something else. I’m guessing that you have found that also with second-stage companies, they’re kind of plateaued but don’t know what, and they think, well, do I need a new brand? Do I need new marketing? Do I need what? And really in a lot of ways they need some internal systems and ways for the owner to actually remain the owner and not the floor sweeper like he was the first week he opened, right?

Meghan Lynch:

Exactly. I mean, in a lot of the conversations I have started out with, I think we might need to update our logo or I think we might need a new website or we just need a marketing plan to get into this market. The more we kind of work with them and do that kind of root cause analysis, the more they start to see if we just did a new logo now or a new website now that is not going to number one, solve the problem.

And number two, we aren’t even set up to engage because we see fabulous design shops and really great website companies and search engine companies who try to apply their expertise to the second stage companies, but they can’t articulate what they want. They can’t articulate what success looks like,  what they do, or how they organize their products or anything. There are all these major questions that they can’t be clear on. So the person trying to design a logo or the person trying to do a website for somebody who can’t articulate what they want, it’s impossible for them to get the benefit of these people’s skillsets until they do some groundwork that really unlocks the ability to use expertise. Because that’s the other thing that second-stage companies need is they outgrow the kind of homegrown logo on Fiverr or the one that your cousin made.

Jim Palmer:

The niece who built the website, niece or nephew.

Meghan Lynch:

Those things were right for that time and place when you were starting up and that was what you needed. But then they start to outgrow them and they need somebody who really understands our ERP system or really understands how to integrate with Salesforce or you start to need specialists.  Specialists need you to be clear though about what you need. So we can basically kind of help bridge that gap between the second stage company who needs the specialist expertise, whether it’s internal hiring it or external contracting it. Then help them get the most out of their people and others who they bring in to help them grow.

Jim Palmer:

Imagine the struggle for you though, Meghan, and please correct me if I’m wrong, is the person that’s coming in or the company coming in, they don’t know necessarily what they need because they have never been a second-stage company, even if they are by definition so they don’t really know what to ask for, is that right?

Meghan Lynch:

Yeah. And I think that it’s where it just becomes meeting people where they are. I think one of the things, again, having been there and having made those mistakes myself. I recognize them when they’re coming to me. So for me, a big thing isn’t to shut them down right away and be like, hey, you’re asking for a website, but hey, dummy, that’s not what you need. Instead of just being like, well tell me about why you need a website and what problem that’s going to solve for you, and just kind of meet them where they are and ask probing questions so that it becomes self-evident to them.

I find you ask a few good questions and these people are smart, you don’t build a successful business because you don’t know what you’re doing. You’ve just never experienced this problem before. So usually through some questioning, they start to see oh yeah, I see what you’re saying. This probably isn’t what I need. Ooh, yeah tell me more about this.

I think it’s just not shortcutting that journey for them, just respecting their brain enough to say you know what you need, you just need a little bit of guidance to help you make the right decision. That’s where a lot of companies really appreciate how we and I work with them that way, because sometimes if you go to a web development company and you say, I want a website, they’re going to sell you a website.

Jim Palmer:

Yes, exactly.

Meghan Lynch:

They can’t help it, that’s their job. For us, we just have a much broader toolkit of being able to really do that, take that time and do that due diligence to really match them with a solution, I was talking to somebody the other day and I got to the end, finally, I asked,  “Have you been selling on Amazon?” And she’s like, “Yeah, our Amazon sales have really gone down over the past year.” And I was like, “Whoa”.

Jim Palmer:

Whoa, Amazon’s through the roof and you’re going down?

Meghan Lynch:

Exactly. Hold on. And she was calling me up for a marketing plan and I was like going to say you don’t need a marketing plan. You need Amazon’s help. That is low-hanging fruit sales that you need to be capturing and revenue that you need to be capturing.” So I hooked her up with an Amazon brand accelerator and I’m like, “Eventually, maybe we’ll work together, but first take care of this place where you’re just bleeding opportunity. Then let’s come back and do something.”  I think she appreciated that I took the time to get to that root cause. She’s like, “Nobody’s ever said that to me.” I’m like, “Well, yeah, because you’re asking for a marketing plan. Why would somebody?”

Jim Palmer:

Yes. So where do brand and culture intersect? I mean, I think the culture initially is obviously with the entrepreneur who starts it, it’s him or her or whatever, but then second-stage companies, I mean, it really take on a life of their own, it has the company brand to a large degree.

Meghan Lynch:

It’s such a good question because we do see the overlapping of these a lot. In order to be able to delegate a brand and empower your people, you really need a strong and clear culture, people need to feel, there needs to be a high level of trust and people also need to be clear on what the company stands for and you need those right fit people. Because if you delegate the brand to, let’s say, sales representatives or customer service representatives, those people have an outsized effect on how customers, in whatever industry you’re in, feel about the brand and the company. Any brand interaction that is with individuals is person to person and is more than a few minutes long has a really, really lasting impact on how we perceive the brand as humans.

So for me, they almost become inextricably linked. You can’t kind of separate the brand and the culture. If you have a great brand, but a terrible culture that is not going to be a sustainable position to be in. If you have a great culture, but a terrible brand, then you have this asset that you are not leveraging. I think the two really go hand in hand. And we’ve done a lot of work, we’ll partner with culture experts if we feel like, oh, this company has opportunities, but they’re just not healthy. We’ve got people who excel at that, that we can kind of bring in and introduce them to, and kind of help them get the kind of back of the house in order before we do the front of the housework.

Jim Palmer:

Got you. What have you found, Meghan, as far as some of the fears that hold back, let’s say high potential companies from business growth, going beyond their initial roots, so to speak?

Meghan Lynch:

I think the biggest one is that when you are at second stage and you’ve had success and you’ve started to build up a team, you now have something to lose. When you are an entrepreneur and it’s just you, or it’s you, and one or two other people, you’ve got nothing to lose, it is do or die. You just go for it and everything’s an opportunity and it’s kind of fun and free in that way. One of the big things that we find is that companies who start to hit second stage and get larger, you’ve got 10, 20, 30, 40 people depending on you for income, now, all of a sudden, every decision you make is loaded. And so it’s like, oh, well, we could enter this market, but these other customers, they pay everybody’s salary, so are they going to freak out when we try to penetrate this other market.  Then they’re going to leave us and then I’ve just destroyed everything that I’ve spent so many years building up?

They feel like big problems and they feel like real problems, but they can be solved very easily. Companies pivot markets all the time and it’s really a matter of putting together a strong communication plan, really training your team. These are the things that we will walk companies through of like, hey, if you want to pivot into a new market, here’s the way you do it in a way that engages your existing customers and brings them closer to you so that they become allies in it. It also opens up a new market for you with positioning and a plan. So you can have both, but I think companies often feel like they have to choose one or the other. Either I’m going to choose business growth or I’m going to choose to protect what I’ve built. I feel like our job is to say yes, we can do both of those things.

Jim Palmer:

Right. We got about three or four minutes. I want to keep jamming as many questions as I can while I have you. I know on your website, I saw this thing called Solve for Y, the letter Y. Is that like your mantra or is that how you approach business with new clients or?

Meghan Lynch:

So Solve for Y  basically is this brand program for second stagers that I developed. I developed it on Six Point when we were kind of making our big pivot, so I kind of practiced it on ourselves first of how would I, as an entrepreneur get clear, how do I empower my team? How do we pivot our positioning in a way that brings us closer together and brings our customers closer to us?

We basically just took that and then we’ve applied it on lots of second-stage companies and have really codified it and dialed it in. So it’s like our process that we walk people through how to solve that seemingly impossible question of saving what we have and grow into this new future that is going to be the next generation.

Jim Palmer:

One of the challenges I’ve helped a lot of my clients with, I’m just curious if it happens for you also is, they don’t charge enough for the value of what they’re doing.

Meghan Lynch:

Yes, and I think the brand is a big piece of solving that problem, price sensitivity, which is directly related to how strong your brand and positioning are. I’m sure this is exactly what you see too, as a marketer, that the more clear you are on the value you bring, and the more clear you are on what makes you different, and the more clear you are on who your ideal client is and how well you know that customer, that’s what allows you to charge that price premium. It also allows customers to not be price sensitive so that you’re not constantly doing that race to the bottom. And for a lot of companies, there’s just so much pressure to commoditize that in order our mantra is that challenge the Goliaths mentality. In order to challenge the big guys, we’ve got to be more focused, we’ve got to be more nimble, we’ve got to be more specialized, again, regardless of what kind of business you’re in.

Jim Palmer:

Well, I could talk to you for a long time, but the clock dictates everything. So I’m sure people want to follow up with you. I’m thinking of a website, or you mentioned you may have a landing page where people get a little more information.

Meghan Lynch:

Yeah, exactly. Our website is sixpointcreative.com. If you just go to sixpointcreative.com/dreambusiness, there is a quiz that you can take if you think you might be a second stage company, but you’re not sure, or kind of want to get a scorecard on where you stand there, we’ll put together a customized report for you for free.  There are also some other tools, a little eBook that you can download or we’ll ship you a hard copy. And a couple of other tools that those folks can use that are particularly helpful for second-stage companies that are looking for business growth. So just some tools and resources.

Jim Palmer:

sixpointcreative.com/dreambusiness, see, there’s some good creative right there. Meghan, thank you so much. Really a pleasure talking with you today.

Meghan Lynch:

Thanks so much. Appreciate it.

Jim Palmer:

Hey, folks that wrap up this very special interview with Meghan Lynch from Six Point Creative. I am Captain Jim Palmer, the dream business coach, and connect with me at getjimpalmer.com. Www.getjimpalmer.com. If you are interested in the dream business mastermind, that is dream biz coaching, dream B-I-Z coaching.com. But until this time next week, another fantastic interview. You take good care.

What branding fears are holding you back?

Bill Black, a high-demand speaker to Business Owners Groups and host of Exit Coach Radio podcast, interviewed Six-Point’s CEO, Meghan Lynch, about the fears holding high-potential companies back from growth.

Hosts & Guests

BIll Black

Meghan Lynch

 Share Video

podcast transcript

Bill Black:

Thank you for listening. It’s a pleasure to have you with me. And, you know, we interview a wide variety of advisors, as I mentioned earlier. Over 1500 advisors have been on exit coach radio. So if you think about it and you want to listen to 20 minutes of business oriented information, head to wherever you listen to podcasts and look for Exit Coach Radio. My next guest, Meghan Lynch is a CEO of Six Point Creative, a brand strategy agency that helps second stage companies breakthrough growth plateaus. As part of her mission to help small business challenge the goliaths, Meghan has served as an expert advisor to second stage clients in a wide range of industries from fast casual restaurants to industrial manufacturers. And Meghan was named an enterprising woman of the year in 2019 and enjoys testing her limits as an endurance runner. Welcome to the show, Meghan, thanks so much for joining me.

Meghan Lynch:

Thanks so much. I’m glad to be here.

Bill Black:

My pleasure. Wow, you have an interesting background, I’d love to hear more about that. Tell our listeners a little bit more about you and your business and we’ll get into some of the questions.

Meghan Lynch:

Yeah, sure. So I started Six Point it was around 2007, just as the market was crashing. So I made it through one grade.

Bill Black:

Perfect timing.

Meghan Lynch:

Recession then. Yeah, perfect timing. And basically, when we started, we were a very generic, local, regional full-service marketing agency. And I’ll put full service in air quotes because it was a few of us, a few smart people in a room, just kind of getting stuff done. And over the years, as I started to grow that business and kind of get myself more educated about what it means to grow and lead a company, I started joining more peer round tables, and really educating myself because I don’t have a background in business or anything like that.

And while I was doing that, I just started spending more and more time with a lot of family-owned businesses, second-generation businesses, closely held businesses that people were starting, and kind of growing and trying to sustain. And I just realized these are my people. That I love working with these kinds of businesses that are devoted to their communities and are really trying to make something sustainable for themselves, their families, their employees. And it was also where I started to realize that the brand strategy work that I was doing for other kinds of companies was particularly helpful to these companies. That they didn’t often really know how to build equity in their brand or how to use brand strategy to create business outcomes.

Bill Black:

There’s a lot. There are many facets of what you do that intrigue me. But one question I have before we get into it is what do you … when you say a second-stage company, tell us what you mean by that.

Meghan Lynch:

So second-stage companies are between 10 and a hundred employees. It’s usually around then you start to have this tipping point early on of starting to feel some of these, just pains of oh, we used to just grow with no problem, and now we’re kind of plateauing. Or it’s not as easy to get customers as it used to be, or we need a lot more processes or the people problems are getting out of control. All of those kinds of early-stage pains.

Then later on in the second stage, often the issues are much more about,  now that we have processes and systems in place and we’re really ready to grow, how do we keep alignment? How do we kind of bridge where we came from and who we used to be, with what is going to get us to this next level and not kind of lose the DNA of who we are in the growth and scaling process? So that kind of tends to be what second-stage companies are all about. And it’s sort of both a uniquely painful business life stage, but also kind of a uniquely exciting and just transformational one. If you could make it through second stage, you can do anything.

Bill Black:

Very good. And you know, I’ll use a golf analogy I know a lot of people, when they start, they start tracking their handicap and it’s probably in the twenties or something very high. And it’s fairly easy with some regular practice to get that down to about an 18 or 17. And then you get into the next phase, maybe this is where the second stage comes in, where you have to start changing your game to get better.

Meghan Lynch:

One of the things that we often remind our clients is, what got you here won’t get you there.  Whatever made you a better golfer early on, you have to kind of get into more like nuance finesse work to make that next leap.

Bill Black:

And that’s where you need, that’s where you really need an outsider to help you to maybe … because there are rules of the road and tricks of the trade. So there are things that need to be probably looked at differently and implemented. What are some of the fears that hold high potential companies back from growth?

Meghan Lynch:

I think that that fear of loss is it’s a very strong, human feeling.  I feel like particularly for second-stage companies, for family businesses, it is something that really does strongly hold them back from growing and from even building equity in their company. Because they have a lot to lose, right? They have employees who are counting on them, they have a reputation, they have customers who are counting on them. Oftentimes their identity is very tied up by this point in the business and what they do in their community. Sometimes they are like pillars of the community. So the stakes are not low for them. Sometimes they let themselves get so afraid of, oh well if we change anything, we’re going to lose what we have. And I think that in our experience you can kind of have both, right? You can keep what you built and you can also make the changes needed to position yourself for that next week.

Bill Black:

So it’s a kind of a case of if it ain’t broke, don’t fix it, but they don’t realize that it is broken or it’s not going to achieve high growth from here on out if they don’t make some changes. And I think one of the areas that might hold back some companies is they’ve always done it this way. And I work with a lot of family businesses and they basically … there’s a new generation coming up saying “things have changed. We need to change up how this business looks, how it looks to the world.” What are some of the brand strategies that you run into that need to be put in place for family businesses?

Meghan Lynch:

Yeah, it’s such a good question. I think particularly for family businesses and especially that are working, not generational, like conflict or transition, a lot of what they’re dealing with I would say over … of all the family businesses that we work with, I would say most of them when they come to us have 70% or more of their customer concentration in one market, or even in just a few big customers, big relationships. And it’s just super, super common when you’ve had this long track record of success, family businesses are very relationship-oriented. So this idea of doing anything new becomes also sort of like a threat to the stability of the business because it’s like, oh, well if we enter this new market, if we do too much digital, we’re going to lose these customers who got us to where we are.

But at the same time, that level of concentration is so high risk, that it’s really not a sustainable way to be around for the next 20, 30, 50 years. So a lot of the work that we do is around helping them diversify that customer base and really say okay, well, how do we talk to these existing customers, make sure that we are not going to lose them, and create a strong communication plan around whatever’s happening. Look at some of these new opportunities that are on the table and pick the ones that are the strongest and also craft a strategy that opens up some new business, diversifies the business, strengthens the brand. So I think that brand strategy becomes a lot about that diversification piece, especially as a first problem to tackle.

Bill Black:

In the COVID environment and hopefully post COVID environment, things have changed obviously over the last year or so. And is brand … have a lot of people have been forced to change their branding, to appeal to the online marketplace more, into the worldwide market, if you will? The companies that might have been perceived as too regional in the past, as they changed to more of an online footprint, are they … what are some of the things that they’re doing to reflect that?

Meghan Lynch:

Yeah. I mean, we’ve seen just obviously like an explosion in e-commerce, and even for brands that historically have not dipped their toe into e-commerce or really haven’t paid much attention to it, they really started seeing growth and the business case for like, okay, well we’re getting growth and we’re not even doing anything, so maybe we really need to do this. Or they were seeing their competitors grow while they were staying out of that game. So that’s definitely something. And I think, for a lot of companies one of the things to realize about digital is that it’s really no different. Like the basics are the same, you create good relationships, you’re authentic, you are clear and consistent in your messaging. The same true basics that make other channels effective are the same here.

I think it’s where people get tripped up, they don’t know what they need to pay attention to. They don’t know which channel is right for them,  where their customers are or where their prospective customers are. Again, they kind of get frozen with, we don’t even know where to start. So often the starting point that we use with our clients is to just start serving and interviewing your customers and talking to them and saying, what is your life like? It’s not about satisfaction surveys. How often are you online? What sites do you go to? What devices do you use?

Just kind of understand what their buying behavior is like, in a way that’s relevant to your business. But all you need to do is do 10 or 12 of those interviews and you already start seeing some patterns and it starts to demystify … if a company’s like, oh my gosh, do I have to worry about Tik Tok? Should I be on Instagram or Facebook? Or should I be on LinkedIn? Should I be doing e-commerce? Your customers will tell you that information. We’re just often, for whatever reason, reluctant to ask.

Bill Black:

Yeah, so many platforms, so little time. One of the things I’ve heard from companies is that as they start to think about future generation ownership or whatnot, or passing the baton, that they’ll change from a name-based company to maybe initials instead of the name. Or if they say we’re the Orange County, they’ll pick out that region, so that they’re more … so that they’re not confined in the consumers’ mind to only working in a certain region. What are some of the other common mistakes you see that companies make when they’re contemplating rebranding?

Meghan Lynch:

I think sometimes it’s stressing too much about those details. We think that we put way too much weight in a name and we’re like, Oh, this has got to explain the full scope of what we do and capture it. And I often think that’s wasted energy. You think of all of the most valuable brand names, they’re all nonsense names, Xerox and Apple and Google. It’s like, the name is what you make it, and your brand is what people say about you when you’re not in the room to quote Jeff Bezos. It is your reputation.

So if you build equity in a brand name, it always hurts me a little bit in the gut when people change their name to initials, because it’s like even it was a person’s name, that name has personality. That name has an emotional connection and you just stripped all that away and became initials. I would rather change the story, Let’s not necessarily jump right to a name change or a logo change or whatever. Sometimes it’s really about communication strategy, not those kinds of superficial elements that I think sometimes we spend a little too much time on.

Bill Black:

Very, very good advice. How about for some of these multi-generational family businesses where it started with the parents. Okay, then they had their few children get involved. Now those children had each had a few children and now the third generation is now 15 potential people getting involved in the business. And pretty soon you have this big kind of mushrooming number of people that want to be involved in the business, whether they’re qualified or not. What about … have you run into situations like that? Where families have said, look, let’s do this. Let’s get involved in the community in another way, maybe with a family foundation, and really get involved with some charitable groups or others. And let’s give some of those family members a job of working with that. How do you figure out how best to show up in the community as a family business?

Meghan Lynch:

I love that question. I think that there is such power, again, oftentimes these family business brands, and once they get to that third-generation stage, they truly are very powerful in their community and their reputation, their name, just their presence at certain events, and things like that are very symbolically powerful and then also, it can be economically powerful for a community. So I always love it when you can create a much wider brand impact and brand story by getting community members or family members involved in different ways. Like you said, setting up a foundation, sponsoring events, creating marquee events in the community. And then oftentimes too they’re leaders in their own industry as well. So I think to think both locally of where can we make an impact and where can we build the brand and the story and the loyalty locally.

If you work nationally or internationally, where could we also expand the value of the story in our industry? How could we as a family get involved in policy, in trade organizations, things like that, where it does really have a connection back to the family, even if you’re not involved in the day-to-day of the business. Getting to know the industry, being influencers in the industry, all of that comes back to the family eventually, and supports the work of the business and supports the equity that you’re building in the brand and therefore in the value of the company. So, yes, it’s such a good question. I think it’s such an overlooked asset that people don’t usually think about spreading out their influence in that way. So I’m really glad you asked that.

Bill Black:

Yeah, it’s branding and it’s really interesting, especially as a lot of our listeners head towards their thinking about exiting their business. Maybe they’re thinking about selling it to a much larger business in their industry as a strategic sale. And so they need to really work with someone to think about, well, how do we start showing up better, differently, in our industry so that we’re not begging them to look at us. They’re begging us to let them look at us. And so it’s really important. What you do is really, really important. And how do our listeners learn more about you and get in touch?

Meghan Lynch:

Sure, our website is sixpointcreative.com. And we set up a landing page for your listeners, so if you just do backslash exit coach, there is a free brand assessment on there. So if people want to take that quiz, you get a customized report based on the answers to see, where is your brand. If you’re thinking about exiting, how much work is there to do and where should you start and focus first? So that’s a helpful tool and there’s a couple of other resources as well about building brand value in your company, right on that site.

Bill Black:

Great information. We went through a lot of information pretty quickly and I hope you’ll come back and share more with us down the road. Because I think again, we just started to scratch the surface, but you really gave our listeners a lot of great tips today, Meghan, I really appreciate it. And thanks so much for joining me today.

Meghan Lynch:

Thanks so much for having me on Bill, appreciate it.

 

 

 

6 consumer trends impacting growing CPG brands

Most leaders feel overwhelmed by uncertainty right now. The questions CPG brands are asking are big ones, and they have consequences for companies with limited resources who are trying to grow and scale. What from the last year was an aberration? What can and should I count on going forward?

Here are six trends we have identified that CPG brands can and should plan to take action on:

  1. COVID-19 made “buy online, pick up in store” a mainstream option for shoppers, meaning even more purchase decisions are being made on our devices, not at the physical shelf.
  2. At the height of the pandemic, consumers would put up with inconvenience to support small businesses by buying direct. Now their patience is waning.
  3. The rise of remote work means that where consumers are spending their time has changed drastically.
  4. Amazon is becoming even more flooded with both brands and third party sellers, increasing competition.
  5. Consumers are becoming harder to reach, which means the ability to speak directly to your current and prospective customers is more valuable than ever.
  6. Consumers are expecting more from social media content than most brands are delivering, meaning there is opportunity for those that create truly relevant and engaging content.

Read on to learn more about each of these trends and get tips you and your team should use to address them.

Trend #1: More retail purchase decisions are being made online. 

 

THE DATA

  • “Buy online, pick up in store” orders placed online increased 202% in just three months from March to May 2020 (Rakuten Intelligence).
  • It’s not just for the upper-middle class. 29 percent of dollars, orders, and items are coming from consumers earning $25,000-$50,000 annually.
  • New order-for-pick-up activity spans all generations. In fact, Gen Z buyers and seniors are the two groups accounting for the most first-time orders, with each group accounting for 22 percent of the new growth respectively.

WHAT TO DO

  • Since CPG brands previously depended on a strong shelf presence in-store, you now need to translate the same experience to digital environments. Here are some ways to make up for that lost tactile experience:
    • Invest in high-resolution, naturally lit photography that will allow shoppers to zoom in on details.
    • Set a style for primary product images (image quality, lighting, distance from camera, background, size, styling, etc.), and then maintain it consistently across all of your brand’s products.
    • Leverage 360-degree product videos to mimic the in-person, three-dimensional shopping experience.
    • Mix in-use and lifestyle images and video with your product images, too. Don’t rely solely on product descriptions to convey your product’s features and benefits. Help your customer imagine how the product will fit into their life.
    • Take image loading speed into consideration. Your product photography can be “saved for web” after photoshopping to limit file size, without significant effect on image quality.
    • Tailor product descriptions to your primary target customer, ensuring you anticipate what questions they will have, and consider their top priorities when making purchasing decisions in your category. Emphasize keywords most important to that primary target, and build your product information hierarchy in a way that’s consistent with their shopping priorities.

Trend #2: Customers did put up with inconvenience to buy direct from CPG brands before the pandemic. Now they expect more of you.

In addition to more widespread consumer adoption of online shopping methods, more retailers have arrived (albeit a bit late) to the ecommerce party, too. This perfect storm will result in higher expectations for CPG brands in direct sales as well-polished, seamless ecommerce experiences become a shopping norm.

 

THE DATA

  • 19 percent of small businesses began selling products online or shipping to customers for the first time in 2020. (Chase Ink)
  • Large retailers are making it more difficult for brands to be competitive with their direct sales. Digital Commerce 360 notes that the top 100 retailers, minus Amazon, accounted for 74 percent of the new, non-Amazon ecommerce growth in 2020.
  • More competition means increased investment required to move your target customer from awareness to sale. The top spending increases for small businesses in 2020 were shipping, social media and search advertising, and ecommerce platforms.

WHAT TO DO

  • Understand how building direct-to-consumer sales fits into your brand strategy and business plan. If you’ve punted on selling direct-to-consumer through your own website and are unsure if the model makes logistical sense for your brand  — now’s the time to decide.
    • Our Solve for Y Ecommerce Gap Analysis can provide guidance on what it will take your brand to compete in ecommerce. We will dive into everything from shipping costs, to logistics, to SEO, to how (and how much) your competition is advertising.
    • Then, invest accordingly. If CPG brands intend to rely on direct sales as a significant revenue stream, you must invest in tech (platform), creative that aids the sale (web design, product photography, video), and advertising that drives traffic (SEO and search advertising, social media advertising, etc.)
    • Winning a first-time sale is only half of the equation. With ecommerce acquisition now more costly than ever, be sure to have a retention strategy in place to keep customers engaged, happy, and purchasing regularly.

Trend #3: Where consumers are spending their time has changed drastically.

Changes to where and how consumers spend their time means your advertising focus should shift. It also means you could quickly become out of touch with your target customer’s new lifestyle if you aren’t proactive. 

THE DATA

Lifestyle changes, new hobbies, new financial priorities — this is a transitional time for everyone. Your target customer has gone through an evolution that will have lasting effects.

  • Job status and finances are volatile. We’ve still lost 10 million jobs in our country overall. Millions have transitioned jobs, and/or have transitioned to working remotely.
  • The number of people continuing to work remotely could increase three to four times compared to pre-pandemic levels of remote work.(McKinsey & Company).
  • An estimated 9 million Americans relocated between March and October 2020 (National Association of Realtors).

WHAT TO DO

  • Go straight to the source. Interview and survey your existing customers, and plan to do so more frequently than you have in the past.
    • Use email surveys to engage past customers who haven’t made recent purchases. 
    • Capture in-the-moment feedback from your site’s visitors with an intercept survey. 
    • Mix optional survey questions into the checkout process.
    • Follow-up with a survey post-purchase as an opportunity to re-engage the customer in your brand. 
  • Compare pre-pandemic website analytics (2019) to present day analytics.
    • Are you noticing major shifts in visitor location? It’s possible that your customers are moving away from major cities, into suburban and rural areas where you may be able advertise more cost-effectively. 
  • Go through the exercise of mapping the customer journey again.
    • For most, the daily commute has instead been replaced with more screen time, frequenting social media and other digital channels during breaks in the day. How you influence the first stage of the customer journey — brand awareness — will need to shift further towards digital spaces. 
    • Think about all of the decision-making advantages your customer has in-store. If your packaging tells your brand story in a way that immediately resonates with customers, that experience needs to be brought into the ecommerce shopping experience. If consultation from a store associate is an important part of the decision-making process for your product, look to mimic this experience in ecommerce. Cover frequently asked questions through multimedia when possible, limiting reading time for the customer. 

Trend #4: Amazon competition continues to increase exponentially.

Amazon’s 2020 growth (38 percent net growth in North American sales) means sellers will be spending more to jockey for the attention of Amazon shoppers. 

 

THE DATA

  • Amazon currently boasts 2.4 million active sellers, with as many as 1.5 million more expected in 2021. 258,000 have joined in Q1 2021. (Marketplace Pulse)
  • 96 percent of Amazon sellers plan to expand their business in 2021. (Jungle Scout)
  • Amazon advertising dollars increased 47 percent year-over-year, with bidding on popular searches commonly costing $7 or more per click

WHAT TO DO

  • If you’re selling on Amazon, a “set-it-and-forget-it” approach to your product listings won’t get you the results you need anymore. Invest in optimizing copy, images, and videos for your product listings. Build an Amazon Brand Store, making it easier for fans of your products to shop your full product lines. 
  • Tap into video ads, which don’t yet suffer from the same level of cut-throat competition. 
  • Understand which Amazon fulfillment model best fits your goals. All have their drawbacks and positives. If you don’t know the difference between them or haven’t recently reviewed them, you need to. If you don’t know where to start, contact us and we can recommend an expert that can help you.

Trend #5: A direct connection to current and prospective customers is more valuable than ever. 

While Amazon’s Fulfillment-by-Amazon (FBA) model makes it easy for brands to sell more without logistical challenges, it’s still critical to keep a direct throughline to your target audience.

 

THE DATA

  • Tech giants are preparing to roll out new advertising targeting policies that will inhibit brands’ collective ability to target potential customers.
    • Apple’s new policies will allow its users to opt for increased privacy in mobile ad targeting. 
    • Facebook is making its own adjustments to remain compliant with Apple. 
  • FBA is an easy sales model logistically, but as more CPG brands lean on it as a primary ecommerce channel, they’re missing out on useful customer-identifying information Amazon doesn’t share. 
  • As consumers uproot and move across the country, your customer data is likely to quickly become out-of-date. 

WHAT TO DO

  • Maintaining a direct-to-consumer ecommerce strategy, even if not a primary sales driver, can help you build and segment CRM lists.
    • Email marketing keeps your brand top-of-mind and reengages existing customers. 
    • Communicating regularly with existing customers helps to increase their lifetime value to you, and provides access to cheaper revenue vs. costly one-time advertising and acquisition programs.
  • Build “data collection” into your social media content strategy.
    • Focus on building a community of engaged fans. 
    • Poll customers where they’d like to be able to find more of your products. 
    • Run contests and giveaways, building a direct connection with winners you can survey or interview in the future. 
  • Engage influencers.
    • Influencers have a built-in, trusting audience. If you can find influencers that appeal to your target audience, you can shortcut the process of getting in front of them. Find influencers that align with your brand, and begin building partnerships. 
    • Start with a $10,000 budget while you’re still learning what influencer partnerships will work best for your brand. In general, influencer activity shouldn’t dominate your marketing budget — and it doesn’t need to dominate it to add value. 
    • Understand that costly “big names” aren’t the only partners who will get a return on investment. In fact, content posted by “nano influencers” (1,000-10,000 followers) and “micro influencers” (10,000-100,000 followers) gets more engagement.  

seTrend #6: Consumer expectations for relevant and engaging social media content are high. 

Virtually all consumer brands have social media presences, and consumers are spending more time perusing social media than ever before. Still, consumers have indicated that the majority of brands are still missing the mark with their content.

THE DATA

  • 68% of people don’t think brands or companies share interesting content. 

As noted in HootSuite’s Social Trends 2021 report, brands are now counteracting this by paying closer attention to what their customers want. 

WHAT TO DO

  • Begin social listening, the practice of tracking conversations and mentions related to topics relevant to your brand. Brand mentions, relevant hashtags, competitor mentions, industry trends, and keywords will provide you with complementary insights you can’t get from customer surveys and interviews. 
  • Use the insights you glean to make adjustments to your content strategy. 
  • Between social listening and trial-and-error of new content, answer the following questions:
    • How does your brand fit into customers’ lives on social media, and how does that influence your posting frequency? 
    • How can you find creative ways to fit into the conversations customers are having, instead of leading them? 
    • What will “break the wall of indifference” customers have to brand social media?
    • Are you “reading the room” to get timing right before launching campaigns? 
  • Treat social listening as ongoing practice and critical must-have to optimizing your social media results going forward.

CPG Brands: Count on the six trends outlined in this article to continue into the long-term future. Nimbleness is an advantage for second-stage brands over slower-moving, enterprise-level competitors. Lean into that advantage! Adjust now, and capitalize on change as opportunity. If you wait until beyond 2021 to address new consumer preferences, expect to fall behind your savvy competitors.

Answer the questions keeping you up at night.

If the pandemic has brought into question your purpose, your target customer, or your brand strategy altogether, find out if Solve for Y is the right solution for your team.

When Brand Focus is More Important Than Brand Scalability

When Brand Focus is More Important Than Brand Scalability

Effective brand strategy is critical to companies in the second-stage business life cycle. The outcomes that brand strategy needs to accomplish depends on where in the life cycle your company is.

Does generic talk of “growth” make you cringe?

When you hear young companies aspire to scale, do you smirk a bit? “Been there, done that,” you might say. “It’s not all it’s cracked up to be.”

Six-Point’s focus is on “second-stage companies” — meaning 10-100 employees or $1M-$50M in revenue. But that is a wide gap, and the growth-oriented companies in the first half of second stage have very different headsets than the focus-oriented companies in the latter half of second stage. Companies with more than $25M in revenue or 50 employees, especially ones that are decades old and may now be smaller than they once were, are battle-scarred enough to cast a skeptical eye at growth for growth’s sake. They know that not all revenue is created equal.

One of our clients, a product manufacturer, had experienced solid revenue growth over many years. They were getting national placements in “big boxes,” controlling full retail bays, and selling entire walls of planogrammed product. But it soon became clear that the bump in revenue didn’t equal profitability. The big boxes did what they do — demand more and more price breaks, start private labeling, and erode margins wherever they can.

This company had to make some hard calls: Say no to some high-volume, big box sales in order to focus on more profitable customers. Reinvest in streamlining operations and new product development to better serve their core customers. Begin to speak directly to new end-user customers and influencers, rather than simply relying on shelf space to drive sales.

This same decision to focus on profitability over unbridled growth is one that faces most privately held companies under $50M. Especially as they become large enough to attract attention and compete with companies (and sometimes even customers) much larger than themselves. At some point they have to ask … is growth the goal? Or is profitability and strength really what we are looking for, even if we have to shrink top-line revenue to get there?

From a brand perspective, this is a time when saying no is much more important than saying yes.

If your company is in a period of needing to focus on its core instead of simply chasing growth, here are four critical questions that you must be able to answer:

  •  Who is your primary customer? Yes, this can be someone other than the end user, such as distributors or franchisees. No, you can’t have more than one. More than one primary customer will guarantee underperformance. As Robert Simons of Harvard Business School underscores, the competitor who has clarity about its primary customer and devotes maximum resources to meet their specific needs will beat you every time.
  • Is this customer profitable when we include all aspects of making and fulfilling the sale?
  • Where do our core values and our primary customer’s core values intersect?
  • How can we maximize this customer’s brand loyalty? What would make them accept no substitute for our brand?

These should be your areas of focus as you hone your brand strategy. Protect and defend your core. Focus your capital and human resources as much as possible towards your primary customer, and cultivate their brand loyalty. Minimize resources that are allocated to attracting secondary customers or any unprofitable business.

Yes, the overall size of your company will shrink, but if done successfully, the business will become more profitable. Employees will be more engaged. The cost of customer acquisition and customer price sensitivity will drop, and customer retention will increase. From there, you will have the groundwork laid for a next stage of growth that is purposeful and focused.

Should you work with an agency who is a specialist in your industry?

When companies search for a branding or marketing agency to partner with, they often wonder if they need a fresh perspective with specialized branding and marketing subject matter expertise, or if industry specialization is more critical.

There is an ad industry adage: Two clients in the same industry is a conflict. Three is a speciality.

Industry (or vertical) specialization is a common tactic employed by marketing and branding agencies to gain credibility and expertise. When we were developing Six-Point Creative, one of our big questions was “do we specialize in a single industry?” We opted instead for “horizontal specialization.” In our case, this meant focusing not on industry but on company lifestage that we felt was underserved in the agency world (second stage companies preparing for additional growth), and on brand development and brand strategy instead of general “marketing and advertising.”

Prospective clients often ask me if they should choose an agency that is more specialized in their industry. Unfortunately, I don’t have a yes or no answer to that, but I do have some food for thought.

You want a horizontal agency if: 

  • You have a significant amount of internal industry expertise. Leadership teams that already have a lengthy history and experience in their own industry may greatly benefit from a relationship with an agency with a broader experience. I have seen many companies get so mired in looking left or right to their competition that they miss opportunities by not seeing broader social, technological, or business trends. Our clients are already experts in their industry and their existing customers and markets. They are relying on our expertise to bring them best practices for reaching new customers and markets, and employing positioning techniques that are not already part of their competitors playbooks.
  • You are trying to do something new or disruptive to your industry. For these companies, experience outside of their industry is a necessity, because they are developing opportunities that their competition isn’t. A distributor launching private labeled products for the first time needs an agency skilled in product launch, not industrial distribution. A business-to-business company who need to extend its brand to the end user consumer needs a consumer product specialist, not an industry specialist.

You might want a vertical agency if:

  • Your industry is highly technical (and you don’t have the time or the resources to get an agency up to speed). When speed and self-direction is of the essence, and you have a technical product or industry, you might gain a lot of value from a company who has worked in your industry for years. You will spend a lot less time with them upfront, and will likely have to do less collaboration with them during the engagement. You may even save money if they can use pre-developed templates, technology, or content and repurpose it for your business. For many small businesses in which resources are scarce, this is a significant benefit.
  • Your internal team is new to the industry. If you have hired talent without industry experience, especially in marketing and sales, it can be very helpful to bring in outside industry marketing specialists to give your team insights on the competitive landscape and what techniques are traditionally successful. Particularly if you are in an area of the company where the labor market is tight and limited, bringing in an outside partner from elsewhere in the country can allow you to access industry expertise that isn’t available locally, as well as industry connections to media or other partners that may be particularly valuable to you.

The bottom line: Vertical or horizontal specialization is your call based on your goals, structure, and comfort level. But you never want an unspecialized agency. If your agency is totally unspecialized (“we will do anything, for any company”), they are not experts. It is simply impossible.