Future-proofing your business

Australia is currently undergoing significant demographic change.  An aging population due to higher birth rates and lower death rates means by 2020 the Australian population is expected to reach 27 million, with one in five Australians aged over 60.

Leading Australian demographer Bernard Salt says this shift will have a profound effect on the way small to medium businesses operate in the future.

The big change in the next five to ten years is that baby boomers will be transitioning out of the workforce and into retirement. As a result, services that support succession planning, sea change, tree change, wellness and wellbeing will be in huge demand.

Generations X,Y, Z (those born in the early to mid 90s) and Alpha (those born in 2010) will also have their own unique needs and desires.

Salt says businesses that can recalibrate, relocate or expand their businesses to capitalise on satisfying these needs based on trends such as the movement of people, age profile and a shift in the ethnic composition of the Australian community away from Italians and Greeks to Indians and Chinese, will put themselves in a strong position.

In a changing world with shifting demographics, businesses need to broaden their focus, looking at the environment in which they operate and ensuring that what they offer is truly what this evolving market and client base demands.  Your current client base of course remains valuable, but to grow your business and ensure future success, you need to understand your clients of the future and adapt your offering to also meet their needs. 

We all know that clients are the key to business success. Macquarie Relationship Banking’s Best Practice Benchmarking 2011 Surveys found that 66 per cent of new business enquiries in the legal industry come from repeat business with existing clients or word of mouth referrals and 76 per cent of commercial real estate agents surveyed identified the maintenance and development of relationships with their clients as the strategy that has the most impact on profit.

The more successful businesses are already thinking about these demographic trends and integrating them into their sales and marketing strategies. Using the right sales and marketing strategies, small to medium enterprises (SMEs) can effectively leverage demographic trends and ensure they are creating businesses of the future.

Joanne Thrift, Macquarie Relationship Banking’s head of marketing, says that once you have a good understanding of your clients of today and tomorrow, the best approach to sales and marketing is to ensure that both are intertwined and in sync. 

While this sounds simple enough, it can pose a problem for many business owners, who may have a strong sales background, but for whom the marketing component may not come as naturally. 

Ms Thrift said that business owners often take on a marketing role as they feel they cannot afford the luxury of marketing professionals: “Many ‘bells and whistles’ marketing campaigns can require large budgets, however often the most effective marketing is the most simple.”

According to David McMurdo, a director of global business consulting firm rogenSi, this simple approach requires in-depth knowledge of your client base. “The deeper your understanding of your clients and their needs, the better you can engage with them and more likely they are to believe you have a genuine interest in them as more than just a revenue stream, all of which boosts loyalty.”

Marketing isn’t necessarily about reinventing the wheel, but about making the most of what you already have in place. 

McGrath Estate Agent’s founder and chief executive John McGrath has been at the cutting edge of entrepreneurialism and innovation since 1988 when he established his own real estate business.  McGrath says one of the best marketing strategies for SMEs is to create “raving fans”. To do this, he says SMEs should effectively stop selling and focus on becoming a “trusted adviser” to their clients.

“People are into long term relationships. Build a business for life not a business that has a good year or two.”

He says once a business has its service offering right and its sales process correct, it needs to make sure it is easy to do business with, it adds value, goes the extra mile and stays in touch with its clients.

“Once you get these components down pat, then you can target your market and focus on demographics.”

A simple place to start is your internet presence.  The internet is the ultimate sales and marketing channel and for this reason it is the ultimate tool for future-proofing a business; but while it can be cost effective over the medium to long term, it does require an investment of time.

“The days of having a static website are limited,” McGrath Neutral Bay/Mosman principal Dean Mackie says.

A long-standing franchisee in the McGrath network, Mackie’s leadership has achieved outstanding sales and property management results and with his team, was the recipient of the Franchise Council of Australia’s NSW Award 2011 for excellence in community service.

Mackie says a website should focus on how to provide value to clients and how clients want to engage with a business.  These days many clients are doing their pre-analysis remotely, so it is vital to provide them with the right level of information pitched appropriately at their needs.

“For a lot of people, they see it [their website] as an opportunity to say how good they are,” Mackie says. “But we think it’s an opportunity to give more information.”

Currently McGrath Neutral Bay/Mosman is looking to the internet to help establish a database which captures information to create value-add to people who are not yet clients of the business. One of the simple initiatives that McGrath Neutral Bay/Mosman has recently created is a landing page called Lower North Shore Property for people who may have attended a viewing and may like more useful information on the area.

Mackie says while many businesses do not maintain good databases and their sales teams are resistant to database management, these are a valuable tool which can help you to nurture relationships.

“Client relationship management systems or CRM systems are about supporting a business so they speak to people when it’s relevant to do so.”

Over the past 12 months, he has focused on upgrading McGrath Neutral Bay’s systems and platforms to improve its database management, and establishing a lead generation team separate to its sales team. 

According to McGrath, the most successful lead generation and database selling techniques comes back to word-of-mouth and creating “raving fans”.

Another opportunity is with past customers or the “neglected group”. He says businesses should always have a record of who they are dealing with.

Mackie agrees: “For us to grow and to be a profitable business, we have to extract all the opportunities around us first before we get new opportunities.  It’s about making the most of what we already have.”