Mike Fromowitz
Nov 23, 2012

When companies and brands stop growing.

Prospective clients and new business start-ups that visit our agency come to us because they have some unique business challenges to solve. Most of them ask three questions: How do you launch a ...

When companies and brands stop growing.

Prospective clients and new business start-ups that visit our agency come to us because they have some unique business challenges to solve. Most of them ask three questions:

  1. How do you launch a brand from scratch on a limited budget?
  2. How do you turn a brand around that is languishing or has plateaued?
  3. How can we re-position or re-design our product offerings to meet new market conditions?

Of course, there are no simple answers to these questions, and every client has his own unique challenges to overcome.  Most ad agencies are inclined to tell their clients  that bold, brave and and innovative advertising ideas will turn their challenges into new opportunities. The problem with this advice is that most agencies view a client’s needs through their own set of capabilities and fixed resources. No matter the client’s complexity and set of challenges, their answer is always an ad—a 30 second TV spot, a print or social media campaign—something that brings the ad agency the greatest profit.

But in the real world, the client’s needs at this time may not be advertising at all. Why waste time and money advertising a brand that has some fundamental problems, a faulty concept or product design that make sales difficult. There’s a good chance that the client needs to write a solid new strategic business plan before determining  the road ahead and to sustain its market presence.

Navigating through the plateau

Most business leaders come to our agency Mantra Partners because they want growth, which often involves finding and fixing problems. They want their sales people to sell more. They want to be more inventive and to innovate faster.  They want their client-care people to better service accounts. They want to improve their peoples’ performance and accountability. Yet these are not the real problems. They are merely challenges or symptoms of underlying structural problems, indications of a company being stuck doing the same old thing over and over again.

Fact is, not all brands keep growing. Promising companies that pass $10M in revenue can lose momentum before they reach $20M, and then $50M, etc..  This is bad news for investors and employees – growth companies create two out of every three jobs (Kauffman Foundation, SBA).

When companies grow, they come to certain places where the things that used to work, the things that created that level of success, don’t work anymore. These crucial points  (plateaus) are tied to company growth and measured by revenue. Breaking through these plateaus is every brand’s challenge. At each plateau, a company must reinvent itself in order to move through it. If it doesn’t, it will become stuck and ultimately decline.

To reach the next plateau and navigate its way successfully through it, the company needs to map out a strategic plan to get there, and then execute that plan with precision. Without a strategic plan, a company could inevitably get stuck at the plateau, barely maintaining its yearly revenue, or even go into a revenue slide. The world is full of companies that look like the “living dead”. They’ve reached that plateau, and on the day of reckoning they fail to leap through it.  The point is: you’re either moving forward or you’re moving backward. The status quo is not a sustainable positioning.

That dreaded plateau

The growth path for a business is rarely a smooth curve. Growth can plateau for a number of reasons, be it changing market conditions, the entry of a big competitor, or internal issues such as a dearth of the right people necessary to scale the business.

Surprisingly, one of the most common pitfalls for brands is when they continue to do the same thing over and over again. I’m reminded of the Albert Einstein quote:  “Insanity: doing the same thing over and over again and expecting different results.”

For some brands, once they are relatively successful and have reached minimal profitability, they find it near impossible to grow their business further and maintain their margins. Marketers are well aware of that dreaded plateau, and it can be more daunting than a fall in sales or growth.  For some brand owners, the fear of hitting the wall tends to inhibit them from embracing the necessary changes they need to make to their business plans, or to make change to the very products and services they offer consumers.

Worse yet, these brand owners fear change because they dread losing some of their precious market share that they currently have. They get stuck like a deer in a car’s headlights, and that usually leads to the brand losing market share anyway. Sometimes it takes a brand to lose meaningful market share before their brand owners wake up to the fact that the brand needs change to achieve its goals.

To sustain their growth, companies must work to reach new markets, and do it with better products and more efficient channels, while continuing to support their customers who bought into the company’s first generation products.  Unfortunately, company executives get blindsided by assuming that exponential growth will continue unabated.  When the reality sets in, the company finds itself unprepared to drive the next wave of growth.

Successful companies plan ahead

One good example of a company that plans ahead is Apple. In his time, Steve Jobs introduced one breakthrough product after another – the Mac, the iPod, the iPhone, and the iPad–while marketing and supporting all of its other products.

If Apple had merely declared itself a computer company, it would have had only ten years of solid growth with the Macintosh.  By creating a new product category with the iPod in 2004 and with the iPod and iTunes in 2007, Apple doubled its revenues (Wikinews.org). iPod sales peaked in 2008 and the company needed its innovation. When they introduced the iPhone and the iPad, the company more than doubled its revenues again (Wikinews.org).

What we have learned from Apple, is that the search for the next source of growth is never over.  A company focused on growth has a narrow ‘innovation window’  to develop new strategies and launch new products before the current business matures.

Beyond advertising

For most ad agencies, everything seems to stop when a brand’s challenges need to be met with solutions other than a new advertising campaign. Which is reason why some marketers today are looking to alternative sources beyond the traditional ad agency. They are seeking collaborative partners with a deeper understanding of a brand’s total value chain.

Smart brand marketers know change is often necessary given today’s fast paced and ever changing market conditions. By implementing changes to improve their products and services the net result is most often an increase in customer satisfaction and an uptick in sales.

They also know the importance of continuously casting a dispassionate look at their brand’s life cycle, and to be agnostic of a “we don’t need to change, we’ve always done it this way and it works” kind of attitude. Making change does not mean being reckless with the brand. It simply means accepting the truth about your brand and not hiding behind rose tinted glasses.

When a brand gets stuck

A company will lean on its ad agency when their brand gets stuck and isn’t growing as fast as it would like to.  Unfortunately, many ad agencies are ill equipped to address supply chain issues, distribution and indirect sales channels, or a brand’s need for changes in design or improvements to its technology (hardware/software). That’s because most ad agencies don’t have the staff nor the disciplines required to tackle these needs.

Finding a consultancy that has this experience and the expertise to provide the solutions necessary to get a brand back on track can be more difficult than it looks. You need to find a partner who understands more than just advertising – one that is staffed by strategic, marketing, branding and technology experts capable of developing new Intellectual Property (IP) for brands.  There are not many consultancies with that kind of expertise.

To push your brand through a plateau, consider these options:

Know the consumer: It simply doesn’t matter what you think about your brand. What matters is what your target audience thinks of your brand. Business success is linked closely with your customers having a positive perception of your brand and your company, rather than from what you actually deliver.  It is highly recommended that you invest in reliable research to guide your strategy. Your brand is created not in the boardroom but in the minds of your customers. So listen to what they have to say and build on your strengths. If your brand is already established, you should continually survey your existing customers to learn what their current perceptions of your brand are. You don’t pick a brand name and then forget it. Branding is an ongoing process of influencing, creating, and fulfilling consumer perceptions.

Know your brand’s purpose: It’s key that everyone in your organization knows and understands what your brand stands for. Think like Apple does. They are immensely successful because they know that a brand is not merely defined by the type of products it sells, but by its greater purpose.

Help staff develop new skill sets: Regardless of their capabilities they’ll likely need to become more emotionally engaged with the brand. As the company passes through the several plateaus to reach higher revenue points, the question comes down to whether or not the company has the right team in place to take on the responsibility, and in the extreme, this can mean a large scale organizational or cultural overhaul. It is also important to make your employees brand ambassadors. If they are enthusiastic about your brand, your customers will be too.

Find the root cause of the plateau: To break through the plateau an organization needs to get to the root cause of why the company has plateaued and treat the cause instead of individual symptoms. Often, an organization’s systems tend to reflect the people who work there – especially the leaders. And that means that in order for your organization to change, everyone has to be involved, from the very top of the organization all the way down to the people on the front lines.

Re-examine how the company operates: You’ll need to look into new operational efficiencies, streamline your expenses and track ROI on all projects. Looking at sales is critical to every operation: does your process of creating and converting new business work well?  Are your sales incentive programs motivating?  Are you tapping all sales channels for opportunities? Is everyone in your organization and outside your organization (strategic partners, industry influencers, and key alliances) aligned with your goals and growth plans?

Learn by your successes and failures: You need to identify and understand the reasons and decisions that have contributed to your brand plateauing in the marketplace. This is not about what happened, but why it happened.

Re-examine your business model: It’s critical that you have a business strategy that reflects how the company will grow – whether organically or via acquisition. As the demands of the business change, core competencies must change in tandem or the business will suffer, stagnate or die. Note that nothing endures but change, and everything evolves: markets, customers, competitors, distribution channels, and technology. You need to consider whether your present product line or service needs to be updated; whether new technologies need to be added; how you can scale up your strategic alliances and key influencers, and how to make your marketing more effective.

Be innovative: Take an honest look at your market. Don’t just be another face in the crowd. To build a loyal following make sure you offer something fresh so that your business will stand out from the competition. Think of ways you can differentiate your business, whether it’s your products, the way you talk about them, or the way you present them visually in the marketplace.

Focus on customer needs: Studies by Ernst & Young show that high performing businesses take charge of their own destiny. These businesses have a laser-sharp focus on executing against four drivers of competitive success: customer reach, operational agility, value, and stakeholder confidence. The study also reveals that high performing companies are laser-focused on their customers too, and this permeates top-to-bottom through the entire organization. These businesses determine the strategy – where to sell, what to sell, and how to sell. They act quick to mitigate customer issues and re-engage relationships. They are highly disciplined to identify, understand, and respond to new patterns of customer demand, and they are driven by superior execution and support of customer expectations.

Make your messaging simple and clear: The world is filled with marketing chatter. Simplify your message.  Make sure that people can quickly grasp what you do and how you are different. If your brand is relevant, clearly communicated, and memorable, you are on the right track. Apple does this well by communicating benefits of their products, whereas Android communicates specs. Personally, as a consumer, I am more interested in benefits before I buy.

Get help from the right outsider: Sometimes a marketer can be so close to his or her brand that they fail to see the forest for the trees. Finding the right consultant partner can help your brand find the route to bold and brave thinking that will help you overcome the daunting challenges and find solutions to push your brand past its plateau.

I like old adages.

They hold significant meaning and lessons for the future. One such adage that brands should take to heart is: “Prevention is better than cure”. In other words,  it is far easier to resurrect a failed product, than it is to resurrect a failed brand.


Mike Fromowitz



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