Increasing profits as a business owner is almost like the New Year’s resolutions millions of people make each year. Everyone wants to start the year with better profits, but this goal doesn’t always materialize without dedicating time, money, and resources to the project. Increasing business profits means finding a balance between effective marketing strategies, money-saving business practices, and creative product development.
Managing Your Marketing Efforts
Developing an effective marketing plan requires money, and modern businesses spend anywhere from zero to 40% on marketing each year. Figuring out the percentage that works for your business ensures revenue growth without the waste often seen in static, tired marketing plans. Like other facets of running a business, marketing investment should change each year based upon industry growth, competitor marketing strategies, and the company’s current profit margins.
In its literature on strategy marketing management, the University of Virginia’s Darden School of Business reveals that the current business landscape is “noisy” and requires creative and comprehensive solutions for reaching customers who want a human connection despite spending much of their shopping time on the internet.
Using analytics helps a business identify its best customers and develop strategies for successful branding campaigns targeting those customers. Topics under discussion during the development of an effective marketing plan include developing a product portfolio, managing advertising channels like social media and content creation, and building a brand and using its equity to further the business’s mission.
Adopting Energy Efficient & Eco-Friendly Practices
Eco-friendly business practices have an unfortunate reputation of costing more money than traditional methods. However, research suggests going “green” can save money. For example, research published by the Institute of the Environment and Sustainability at UCLA suggests that eco-friendly business practices help the environment, as well as result in increased productivity from employees.
Their study, “Environmental Standards and Labor Productivity: Understanding the Mechanisms That Sustain Sustainability,” surveyed the employees working at more than 5,200 companies in France. The researchers used an equation that took the revenue minus costs of sustainable practices and divided those results by the number of overall employees. Results found that firms that had implemented sustainable practices saw a 16% increase in employee productivity.
Eco-friendly business practices that can save a company money and increase profits as a result include green building practices, using energy-efficient machines, and limiting the use of materials in traditional office spaces. From eliminating printers to providing recycling opportunities at all company sites, achieving sustainable status as a business begins with small steps and can result in better profits for your organization.
Engaging in Effective Online Advertising
As of 2016, search engine behemoth Google received an astounding two trillion search requests for the year, which means the importance of online advertising and building has increased exponentially over the past two decades. However, buying advertising on Google and working on search engine results is only a small part of the online marketing machine you must run to ensure marketing dollars are spent wisely and result in greater profits.
A research study published in the March 2016 edition of the International Journal of Research called “Effectiveness of Online Advertising” used a 5-point scaling technique to measure the performance of advertisements ranging from online advertising, television spots, magazine spreads, and banners. Online marketing initiatives received a 29% rating for customer preference, and the only advertising medium to exceed that value was television advertising.
In addition to organically grown search engine results, other types of online advertisements measured for their effectiveness included floating advertisements, email advertisements, pop-ups, and videos. Video advertisements resulted in the most effective method of encouraging purchasing activity with e-mail, floating, and pop-up advertisements seeing slightly lower effectiveness. Managing a successful online advertising campaign means balancing each of these kinds of online advertisements.
Running a profitable business is essential whether you work as a sole proprietor, the leader of a start-up, or the head of a large business. To maintain and grow profitability each year, revisit techniques and business practices used in marketing, advertising, and sustainable business practices.