In his book How to Become a Key Person of Influence, entrepreneur Daniel Priestley suggests that one way for entrepreneurs to find their passion is to observe a product or service that isn’t working, and set about building their own successful business by offering a workable solution!
Creating solutions that work
This is exactly what Wendy Maynard did almost 18 years ago when she co-founded Kinesis Inc, a successful marketing and small business consultancy firm.
Wendy observed that marketing for small and medium-sized businesses is broken. Why? In most organizations functions are siloed, with the marketing department responsible for external branding and lead generation, while HR tackles internal employee engagement, retention, and recruitment.
On paper, it looks like it makes sense. But in reality it often fails. And it certainly doesn’t support customers very well. As problems develop and grow, business growth stalls and employees become disengaged and underperform or leave. Worst of all, customers feel underserviced and eventually seek out new service providers.
Fundamentally, says Wendy, the solution is transformational marketing, where a customer journeys to be fully integrated into all aspects of a company, so that they – and all your key stakeholders – are engaged.
Transformational marketing
To do this, a business must have what she calls a holistic business ecosystem in play. This system is one of the components of Wendy’s philosophy of Marketing from the Inside Out (MFIO), which is designed to fix the broken small- and medium-sized business marketing.we
Wendy explains what this is, how it works, and why it can help your business.
Q: Wendy, before we talk about your approach to helping businesses, can you tell us where you were in your career when you came to see that marketing for small and medium-sized businesses was broken? Was it a Eureka! moment or an evolution? With your realizations, how did you create and develop your solution?
Wendy: It was really an evolution. I wouldn’t say that there was any single Eureka occurrence. It was a series of discoveries based on our work with clients, as well as the way we evolved our company.
That said, the Great Recession was really a pivotal period for us. Spurred by the same extreme economic pressure that all businesses faced in 2009 and 2010, we realized that our own business model was not highly remarkable. Branding and marketing is a noisy, competitive market.
And, while we created great work, we also had plenty of competitors producing similar work. It forced us to ask some tough questions and completely reinvent our business model. Although I would never want to go through that time in business again, it forced us to look into the mirror and ask ourselves some big, hard questions about whether we were truly practicing all of the things we believed.
Concurrently, the recession did us a giant favor in that it exposed how screwed up marketing was for SMBs. Businesses were struggling to survive – struggling for their very existence – and were simultaneously firing, disempowering, or cutting the budgets of their marketing people.
Connect your marketing to your profit and loss
Of course, this was completely counterintuitive, and Shawn Busse, my business partner, and I realized that businesses couldn’t connect marketing to their profit and loss (P&L). Instead, they saw it as an expense instead of an investment that should be invested in their company for a large return.
The recession was what ultimately revealed to us that marketing was and is fundamentally broken. This lead to us creating our current business model to solve it. It also gave us the opportunity to examine our business operations and do a complete overhaul – establishing replicable, scalable systems and a subscription-based pricing model. I’m not sure we would’ve seen either of these shifts without the recession.
Thank, acknowledge, and recognize customers
Q: In the context of the traditional marketing model, you’ve observed small and medium sized businesses spending a lot of money on customer acquisition, but not having adequate processes in place to keep them and support them. That in itself is pretty shocking. What exactly is going wrong?
Wendy: Well, the short answer is that they don’t know anything different. Here is what happens in many small- to mid-sized businesses.
Companies front-load all of their marketing dollars into lead generation. But they don’t focus on the process of onboarding a prospect and then ensuring a graceful transition to a customer that then has dedicated employees who are responsible for building and nurturing those customer relationships.
There is no system for moving a customer through an internal process of maturation where their needs are met at every touchpoint within the company. These customers are not regularly acknowledged, helped, thanked, and recognized for their loyalty. The workforce is not encouraged by leadership to be obsessive about delighting your customers.
Transformational marketing means nurturing customers
And because there is no internal system for customer nurturing, there is high customer attrition. There are multiple “one-and-done” projects that result in a short customer life cycle (and as a result – lower profits).
This is the leaky bucket phenomenon—companies pay a lot of money to acquire a customer, but then, because they don’t nurture the relationship and work to provide more value over time, the customer drifts away. There is little brand loyalty, and customers make few word-of-mouth referrals.
Amazingly, according to Frederick Reichheld of Bain & Company: "A five percent increase in customer retention can increase business profits by anywhere between 25 percent and 95 percent."
As they return, your operating costs to service them go down. And they will often be willing to pay a premium to continue to do business with your company rather than switch to one of your competitors with whom they do not have an established relationship.
Q: In the intro to our interview we touched on some of the difficulties silos cause. Specifically, how does this affect a businesses’ ability to market effectively, retain valuable customers, and plan for growth?
A key part of transformational marketing: Business processes as part of a continuum
Wendy: Everything should operate as a continuum. When you integrate marketing, HR, account service, and leadership, a company can have a cohesive process to hire and retain amazing people who are engaged in their company and driven by their mission, values, and vision.
Then when the company gets leads, they can more easily convert them to loyal customers, take incredible care of them and deliver an amazing customer experience. This leads to an engaged customer who will not only spend with you again and again, but will tell all their friends.
It looks something like this:
Improved employee engagement --> better service, employee retention, productivity --> higher customer satisfaction and brand loyalty --> more revenue and profit.
Building cohesive culture
Q: Tell us about MFIO and the holistic business ecosystem. What are they are how do they work?
Wendy: You intentionally build a cohesive culture that is driven to live and breathe your company values, rally around its mission, and move it forward toward your Big Vision. You ensure that you have systems and processes in place to plug the leaky bucket, wherein employees are so engaged and customers are so delighted that they will stay with your organization for the long haul.
As a result of creating this holistic ecosystem, you will achieve incredible brand loyalty from all of your customers (internal and external). They spread word-of-mouth referrals to other great customers and A-level talent who decide that you are the crème de la crème and they would LOVE to work with your company.
Q: How can clients prepare when they commit to MFIO? And what can clients expect when they start to work with you?
Wendy: They start by talking to my business partner, Shawn, about our process and how we could be a good fit working together. If they are excited about applying MFIO to their company and sign our agreement, we start them off with an extensive Marketing and Business Questionnaire that forces them to undertake a period of business self-reflection.
From there, we set up a full-day Strategic Planning Session with their leadership team. In it, we help them set their Mission, Values, and Vision (we have a unique approach that we use) along with a number of other culture shapers that will set them up for success. Then we help them craft 6-12 months initiatives and goals that we will help them to implement.
Q: MFIO really makes sense. But at the same time, your approach is pretty deep, and it’s obvious that it’s going to take time. What kind of time commitment are clients looking at before they start to see results?
Wendy: Depending on what they choose to apply, companies that are smaller can see results within a few months. But to put everything in place, it’s a three- to five-year trajectory.
The high cost of low employee engagement
Q: An important element to your approach is employee engagement. What kind of leadership and culture do employees need to be truly engaged?
Wendy: Leadership that prioritizes a healthy, positive culture and reinforces its employees for living its mission, values and moving towards its Big Vision. Leaders who grow other leaders from within and believe in radical transparency and authentic communication.
Leaders who make sure that every single one of their employees are obsessive about delighting customers. The company produces, designs, develops, invents, and innovates with customer happiness in mind. Everything is focused on the things the company can do to create value and success for customers.
Q: What is the cost of low employee engagement?
Wendy: Here are some stats on the power of employee engagement:
In an ongoing multi-year study of over 25 million employees across geographies and industries, Gallup found that business units that ranked in the top 25 percent of their organizations for employee engagement showed:
22 percent higher profitability
21 percent higher productivity
10 percent higher customer satisfaction
37 percent lower absenteeism
48 percent fewer safety incidents
41 percent fewer quality incidents (defects)
In addition, The Towers Watson 2012 Global Workforce Study of 32,000 employees in more than a thousand businesses, focused on how employee engagement affected a variety of metrics in their places of employment. Researchers found that those companies with the highest engagement had an operating margin of 27 percent, while those at the lowest engagement levels were less than 10 percent.
The Gallup poll I mentioned also revealed that a whopping 70 percent of the American workforce is not reaching their full potential. Of these, about 50 percent fall into a category that Gallup calls "Not Engaged." These folks are emotionally disconnected, checked out, and less likely to be productive. They are essentially sleepwalking through their day. As a result, an organization’s vital economic influencers—their ability to grow and innovate—are at high risk.
Avoid actively disengaged employees
The other 20 percent are "Actively Disengaged" in their work. These are the folks that you need to avoid hiring or must move off your payroll (yes, this means you will have to let them go).
Not only are these employees acting out their unhappiness and actually working to undermine what their company accomplishes, a growing body of research suggests that having even a few unengaged employees can quickly turn a positive working environment into a divisive and negative atmosphere. These “bad apples” have the power to ruin the performance of a team or an entire organization—no matter how stellar the other employees.
We can’t stress this point enough. Poor performers not only under-deliver; they also bring others down with them.
In the 2006 study How, When, and Why Bad Apples Spoil the Barrel, University of New South Wales Professor Will Felps and his colleagues discovered that just one “bad apple” will drive down team effectiveness by 30-40 percent. And in addition to performance issues, there are morale hits that employees take too from working with bad apples.
Q: For new businesses that aren’t yet ready to use MFIO, what guidance do you offer so that they can avoid creating the foundations that lead to a siloed structure?
Wendy: I think all businesses should apply principles of MFIO. The earlier the better. The foundation of it all is a company’s mission, values, and vision.
Who can benefit from transformational marketing?
Q: Describe the mindset/attitude/approach of your ideal client. What kind of businesses will really benefit from MFIO?
Wendy: Businesses with a CEO and leaders who are the following:
Are forward-thinking and strategic.
Hunger for new insights and approaches to business.
Want to grow a sustainable business with a strong, well-known brand.
Are interested in positioning their company as a leader in their field.
Care deeply about customer experience.
Want a vibrant internal culture that runs smoothly and attracts the top talent.
Seek a consistent marketing execution rhythm.
Understand that marketing operates most effectively when it integrates with business strategy, company culture, and sales outreach.
Q: Focusing in on your own background, Wendy - you have a Masters in Environmental Studies. Was an understanding interconnectedness and impact important parts of your study? How influential was this degree in shaping your business philosophy and leading you to create the model for a holistic business ecosystem?
Wendy: I wish I could say that my journey was that intentional. Alas, with my undergraduate degree in Public Relations, my goal was to combine my two areas of expertise and become the Director of Communications for an Environmental NPO. Unfortunately, as I was about to finish my thesis, the Dot Com crash occurred and since so many NPOs had been rolling in the donation they had been getting from the Dot Com sector, when that dried up, so did any hiring they were doing.
I forged a different path by starting Kinesis with Shawn (and a third partner for the first few years). We worked a lot more with non-profit organizations in the beginning years of our company, and then transitioned to almost completely working with for-profit companies.
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Marketing strategist and business growth expert Wendy Maynard
Wendy Maynard is an entrepreneur, writer, and business consultant. She is also a marketing strategist with more than 20 years’ of experience helping businesses grow and succeed.
Wendy co-founded Kinesis, a Portland-based marketing firm. She is now an independent marketing consultant.
Wendy has a BA in Public Relations and Marketing from the University of Florida and an MA in Environmental Studies from Southern Oregon University. You can find Wendy on Linkedin and Twitter.
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