Reactive vs Proactive Marketing

By: Admin
Date: 2019-08-08

Reactive Marketing
When I think about the need to be reactive in marketing I think about my friend and client that purchased a fulfillment company.  After the first few months as the new owner he found out that there were troubles with his largest client which represented 50% of his business.  He asked for time to resolve the issue as he had conducted proper due diligence before buying the company and was not aware of any service issues at the client.  Later he would learn that a higher up in the firm’s purchasing department was a good friend with the prior owner of the firm he had just purchased.  When the prior owner knew his friend was retiring he put his business for sale.  With the higher up gone the purchasing department was free to move in whatever direction they wanted.  He found himself without his largest client. 
My friend with his life savings on the line began round the clock selling new business.  His vigilance paid off and some small deals began coming through for him.  Those deals started getting bigger and after a few months of “lightning round” selling he got the firm back to break-even and a few months after that was back in the black. 
Proactive Marketing
Once my friend got back to where the firm was when he bought it he began slowing down.  The axe was not above his head anymore.  He had about a year where the business didn’t grown and then he decided he needed to get back to work and make marketing a focus.  He began developing new revenue goals for the year and started working backwards as to how to achieve them.  One of his goals eventually became to begin selling to the federal government.  After all he had been through he wanted protection from any future economic downturn. 
My friend feels that losing that large client that was roughly half of his business ended up being a good thing because it forced him to get out there and sell.  Otherwise he might have been a good caretaker of his firm but without the “trial-by-fire” he would not have been forced to acquire the confidence and skills of selling. 
Federal Market Place
According to Deltek the Federal Marketplace has seen a reduction in small business contractors by 25% over the last 10 years.  Many consider this to be a result of the longest economic expansion in the America’s history. 
Why be Proactive? - Federal Lead Time
If your firm decided to get into federal contracting tomorrow the reality is the firm would not hit peak federal selling for several years taking 2-3 years to get up to peak federal sales of $1MM.

Year

Number of Firms

Average Sales per GSA Contract Holder

2018

737

41,388

2017

901

546,713

2016

1,692

1,007,142

These numbers look attractive for GSA however they need to be part of a Proactive marketing plan not a Reactive one. 
So when times are good is really the best time to add your federal sales channel, further diversify your business like my friend is doing to build your business to whether any storm.   

Jumping Man