07 Jul Sales and Marketing in Busy Times
It is a busy period in the cultural heritage industry and forecasts are that it is going to get busier. It’s not really a problem for firms to acquire work right now; the problem is finding the resources, particularly the labor resources, to get it done. Does this mean that you abandon your sales and marketing? No, not at all. You still need to continue these efforts but you do need to change your goals.
When you have limited capacity to do work, your strategy should be to maximize the value of the work you do. Your organization can continue to grow in value, the ultimate goal of any for-profit business, even though you aren’t increasing in size. How? By doing higher value jobs.
What is a higher value job? It is a job that produces more free cash flow than another job. How do you figure this out? You need to do a little data mining and this is what your marketing staff should be doing all the time, but particularly in busy times. You identify the most valuable job, client, type of work, client industry sector, region, office location, etc. by looking at the final profit dollars/pounds/euros for each job or task order. Don’t confuse profit percent with the profit amount. For this, you are after the amount–the absolute profit contribution. When you do this, don’t look at your planned profit from your proposal, as this won’t reflect what actually happened on the job. Look at your final realized profit after the job is completed and closed. As well, do include the job-specific proposal and sales costs.
When you have job-by-job profit amounts, you can pick a time period (e.g. last year) and then total up the amounts by the categories of interest (e.g. job type, client, client type) and sort them from high to low. The ones at the top of the list will be the most valuable.
When you have limited capacity, don’t spend time chasing work from the bottom of the list. Let that work go to your competitors. You want to have your staff spend their 2,000 hours per year on work that most contributes to firm value. In busy times when you can’t increase your capacity, keep your sanity and high work quality by only taking high-value jobs. Successful firms aren’t big firms; successful firms are valuable firms!