Rethink your game plan — become a change championPosted on Written by Mary Elston
I held it in my hand and knew it was time to move on. Had I waited so long because I was comfortable, too busy or procrastinating? Yup, all of the above. It was my old cell phone. The little fossil was more than three years old; about 90 in cell phone years. My friends were Google-Mapping and YouTubing on their cells while I was diligently dialing digits – it was embarrassing.
After looking at Droid, iPhone and Borg (kidding on Borg), I made two cataclysmic leaps. I bought a new cell phone and changed wireless carriers for a better plan. Hello, sleek new model with multiple apps and QWERTY keyboard. Twenty-four hours later, I was bingeing on benefits and evangelizing that “there’s an app for everything.”
If you’ve ever thought about a technology upgrade, you know change can be tricky. The same is true for managing change in your marine or boating business. While slogging through a sluggish market, actively managing change is the “app” required for sustaining profit power. Should you tweak your business model or stay the course? When considering business model adjustments, here’s five ways to get started and help you become a change champion.
- Check up, check down: Begin looking at your business model by reviewing what’s working and what isn’t. Check your strengths and weaknesses, opportunities and threats (SWOT). Where are revenue and margins strong and buffed, and where are they wimpy? Compare what’s up and down in your region with your competitors and across the industry. Find out what trade publications and marine industry associations are saying went right and wrong last year, and what’s trending for the next year.
Remember to tap consumer input from manufacturers, suppliers, partners and your own customers walking in the door. When you check up and down, use personal and broad perspectives to create your business vision of where you see the market heading and what you need to do to peek around the corner and capture it.
- Energize and evolve your 80/20: Define the 20 percent of your business bringing in 80 percent of revenue and margins. Armed with this and the data mentioned above, strategize potential 80/20 product adjustments and a list of possible business-model changes for growth.
If margins are great on repair and service and weak on boat sales, look into evolving your sales mix toward high-margin areas. Selected dealers are no longer generating 80 percent of their revenue from selling new boats because carrying costs are too high. Instead their focus has shifted to repair, service, accessories and selling more used boats, where margins and carrying costs are better. They have energized and evolved their 80/20 business model.
Evolving business models are everywhere – think Starbucks’ now-familiar drive-up window, Redbox movie rentals and organic food stores with in-store dining and fresh gelato. Shift your thinking to generate business-model changes and potentially produce a new 80/20 formula.
- Look to the stars: Who are the star players pulling in consistent revenue, even in a down boating market? How are they managing their business differently from yours? You know they must be closely watching the bottom line to consistently manage and lower costs. They likewise manage their financial accounts and relationships well, avoid living on the economic edge and keep credit and banking relationships strong.
Star performers listen closely to customers, market buzz and what competitors and other players are doing. The stars aren’t relishing their comfort zone; they are always gazing beyond the horizon, adjusting and formulating their vision and product mix to keep revenue shining. The Internet is thriving with market stars – think subscription growth for online and mobile news and magazines instead of printed versions, electronic books and the continuous evolution of other Web-based goods and services.
Market stars don’t arrive and stay there by accident. They’re actively networking, strategizing, adapting ideas and managing their business model for continued success. Do negative market events still have an impact? Sure, but star performers are better positioned to absorb them, bounce back and continue to hang high.
- Exist or resist: Run the risk you’ll cease to exist by resisting change. Contemplate this tongue twister to help twist your way of thinking if you’ve previously managed your organization with a resistance to change. Embrace business change, and something happens – opportunities appear.
Consider the dealer who no longer carries a large inventory of boats, but instead takes prospects to the manufacturer’s showroom to view the finished product.
Another successful example of market change acceptance happened with a family friend who owns a cabinet and stone shop. He previously relied on new construction for most of his business, but with soft building starts he has moved aggressively into the remodel and upgrade market, and his business is thriving.
You can think of similar approaches for your boating and marine company, such as upgrading engines and boat interiors for existing owners who aren’t ready to buy new or consider a trade. Follow the money. When you open your management mind to options, options become opportunities.
- Bundle for bigger bucks: Always maximize customer relationships and encourage repeat and bigger purchases to grow wallet share. Do this more often by providing product bundling or volume purchase programs. This isn’t new, but is easily overlooked. Everyday bundles include value meals with a sandwich, fries and a drink; buy one, get one free promotions; and spend $100 and get a 20 percent discount.
Product bundling and volume purchase promotions prime customer interest and incite salivation for add-on buying (even when it isn’t food). Merchants know that once customers are in the door, chances are high that they’ll spend more money than they originally intended. Build bundled deals and satisfaction to help encourage multiple visits and expanded buying.
When providing bundled deals, engage coupon power or set up a periodic, radio-based Daily Deal. With a Daily Deal, radio ads direct consumers to radio station websites where merchants allow a fixed number of customers, maybe 30 or so, to pay only $25 for an online coupon redeemable for $50 in merchandise (you decide what values apply). If you’re not doing this yet, think about jumping in.
Online coupons draw buyers to your front door. Also post coupons on your own website and make them accessible through e-coupon sites such as Groupon or Yipit.
As you manage changes in your business model, think about your core moneymakers and where the market is shouting “opportunity.” Consider future customer needs and what’s working for competitors and partners, then enlist trusted advisers to help you make the right business-model decisions. Ease in with pilot or test changes. Properly include, train and coach your staff to influence changes, buy into them and help produce success. Keep your plan focused while adjusting your business model at a fiscally prudent and competitively compelling pace.
Just as I changed my cell phone plan after careful consideration of the options, use a like mindset when adjusting your business strategy. Business-model change can be challenging. Become a change champion by managing it with care, fortitude and a sharp mind and you, too, will be bingeing on benefits when you’re done.
Mary Elston has spent more than 20 years in management in the transportation, consulting and technology industries. She is a member of the National Speakers Association and author of the book, “Master Your Middle Management Universe, How to Succeed with Moga Moga Management Using 3 Easy Steps.” Contact her at email@example.com.
This article originally appeared in the October 2010 issue.