BioCycle August 2009, Vol. 50, No. 8, p. 29
Here are easy-to-implement tips on how to expand market share and build sales in a difficult economy.
David Hill

IN today’s economy, buyers are being far more selective about the purchases they are making. Consumers are looking for bargains and shopper-savvy, buying opportunities. And in all candor, the best time to exploit a good purchasing deal is when inventory is backing up, operating budgets have been cut to the bone and the trade balance leans heavily in favor of the demand side of the scale versus the supply side. To maintain and grow sales – and strengthen your market share in the compost and mulch markets – consider the following 10 steps:
Start With The Answer: Have a very clearly defined goal for your business, your inventory management practices and your product positioning based on market needs or identified opportunities. Far too often, individuals go into business or acquire one without a clear idea of where they want to take the company and how they will get it there. Yet the goal dictates the strategy of how to achieve it. The same critical thinking applies to promotional campaigns, merchandising, inventory management, etc. If your company needs to get more business, drive higher gross revenue or reduce inventory, a common and easy step is to “discount prices.” While that may ultimately be the right step, first answer this question: Why are you having the sale? If it is to attract new customers, price reductions (well promoted) may be an effective strategy. However, there are several potential downside consequences to a “Price-Reduced” (for regular inventory) campaign. Consider the customer who bought the same item two weeks ago at full price. In that situation, you have taught your customer a valuable lesson that will be long remembered: “If I wait, the price will probably come down.” As a rule of thumb, your product or service should not be discounted unless you have purchased a select product or products specifically for a discount promotion.
If you have excess inventory or simply need to generate additional sales dollars, go for a “Buy three, get one free” or “Five for the price of four” promotion. This type of sale is vastly different from a straight discount. Specifically, it does not reduce dollar volume (and often increases it) but does reduce profit margin. (More on this in Tip #9.)
Stop Selling Compost/Mulch/Topsoil. Sell Your Brand! The generic product is compost and collectively, we are compost/mulch/topsoil producers. If we view and describe ourselves as producers and marketers of “compost” then anyone who may ever have had a bad experience with compost has had a bad experience with our product. Far more importantly however, you are the stewards of your product and your brand, and go to great lengths and expense to manufacture it. Everybody sells compost but only your site or your agents sell your brand.
Sell Benefits, Deliver Features. Features are true, factual statements such as “this compost contains 10 percent organic matter” and benefits are the favorable attributes associated with the feature, e.g., elevated levels of organic matter improve water holding capacity, pore space, friability and cation exchange capacity in soil. A steakhouse sells the sizzle (e.g., taste, quality) and provides the steak. A nursery sells the fragrance and beauty but provides a rose. When I was retailing compost, my very deliberate and literal message was selling gardeners “confidence by the cubic yard” and “success by the 40-pound bag.” Sell the results specific to your brand and both short and long-term sales will improve dramatically.
Think Outside The Box or Bin. Do not attempt to “win the sales, product or service competition” by using conventional thinking or practices. For example, the owner of a garden center that I managed never advertised during the peak seasons. His rationale was that it was a waste of money because his ads would get lost in the mix with all the others. Instead, he used those dollars to buy annual flowers for the front of the store and put in fantastic displays. He then advertised in the off-seasons, when his was the only ad running.
The owner employed other savvy marketing strategies as well. The garden center’s name was mentioned several times a day on a radio station commonly played in offices and we never paid a penny for advertising. Instead, the owner sponsored a “Secretary of the Week” contest and supplied and delivered a beautiful office plant to whomever the radio station selected as the Secretary of the Week. This was very inexpensive for him – a fraction of what similar advertising time would have cost. We had a shop full of plants and planters and a delivery service, anyway. It was great exposure. Another example was providing a nearby television station with a corsage or boutonniere for the evening newscasters on every special occasion and holiday. Not only was this classy for the station and provided differentiation, it got mentioned by the newscasters, noticed by the audience and provided exposure that would have been expensive to achieve otherwise. The real payoff was that whenever there was anything having to do with flowers, gardening, holiday decorations, first frost, etc., ours was the location at which all the media convened for the on-air interview, backdrop for weather shots, etc.
Set Aside Gorilla Marketing And Practice Guerrilla Marketing. Gorilla marketing is an “above the line” form of promotion that takes advantage of large, big budget, broad media distribution (advertising). Although a specific target is intended, gorilla marketing casts a wide net in hopes of reaching the intended target. Guerrilla marketing relies on unconventional coordination of promotional programs utilizing time, energy and imagination rather than a big marketing budget. It is considered a form of “below the line” marketing. Typically, guerrilla-marketing tactics are unexpected and unconventional and are intended to get your attention and leave a lasting impression. Additionally, consumers are targeted in unexpected places, which can make the idea that is being marketed even more memorable. The objective of guerrilla marketing is to match wits against budgets.
A good example of guerrilla marketing is product placement (using a specific and very readable product brand on TV or in a movie). Have you ever noticed that if a laptop computer is shown on a television program, invariably the laptop is an Apple computer? An example, specific to the composting industry includes the use of Kellogg’s Garden Products in the Oscar-nominated movie “Adaptation.” Although the scene was brief, actor Nicolas Cage was shown carrying a bag of Kellogg’s “Amend” over his shoulder while he tended to his orchids. Kathy Johnson of Kellogg’s said they do not pay for product placement, however Kellogg’s does enjoy the benefit of brand image reinforcement among customers: “Lots of them said, ‘Hey, I use that product. I love it.'” Johnson says results were similar when Kellogg’s products showed up in “The Longest Yard.” She recently heard that a scene in the current box office hit “Transformers” also includes a bag of Kellogg’s Gromulch.
Use Blogs And RSS Feeds. Engage customers and potential customers and groups in interactive marketing. Blogs (formerly weblogs), list serves and subject forums such as www.gardenerscorner.com, are a very effective way to attract new customers and to keep current customers loyal. An RSS (most often translated as a “Really Simple Syndicate” or also called a “feed”) is a way to quickly get new information from your favorite websites or blogs without having to go to each and search them individually. With an RSS reader such as Google Reader®, this information can be sent to subscribers as it is published, providing an excellent way to alert your customer base of new product introductions, price changes, promotions, etc. Of course, the addition of broader, thought provoking, time saving information will entice customers to your site and have them signing up for your RSS feed. This frequency of contact keeps customers engaged with your company and loyal to your product. It is a value-added, interactive application that keeps information current – in both directions – and can be one of your company’s most effective customer service tools. There are many RSS readers or Aggregators. Do a web search using either name to find out more about them.
Elevate Perceived Value. Perceived value is a measure of the benefit expectation of a product, weighed against the selling price. There are several ways to increase perceived value: Include testimonials; Provide a strong product guarantee; List all of the product’s beneficial attributes; Have packaging look like and demonstrate value added, i.e., packaging should be strong, have good, well-printed information and have strong seams/seals; Become part of the US Composting Council Seal of Testing Assurance or the Compost Council of Canada’s Compost Quality Alliance and exploit the use of the “Seal” in all promotions, advertising, print literature and collaterals. My favorite tool is use of what I call “Marquis Customers.” It is similar to a celebrity endorsement however, instead of a celebrity, the site is the one with celebrity status. The fact that the product was used on a high profile property brings a certain amount notoriety and mystique but more importantly, it brings a lot of credibility. Examples include the Maryland Governor’s Mansion, Orioles Park at Camden Yards, the White House, etc.
Co-Brand/Engage in a Strategic Partnership. Leverage the value added opportunity created by the sale of complementary products. This approach can be utilized if a producer is supplying two different products (compost and mulch, topsoil and container mix, or any combination) or if two separate companies want to work cooperatively in running a promotion. An example is plants being sold in containers with Miracle-Gro® branding imprinted on the pot. In a case such as this, typically the branded partner either supplies the pot or pays some negotiated amount per pot distributed.
Use The Proper Method Of A Discounting Promotion. There is a significant difference between a “25 percent off” promotion and a “buy three, get one free” program. On the face of it, both work out to a 25 percent discount. However, by providing a simple discount, you face a substantial risk of simply leaving money on the table. Sure, you may generate additional sales but the increase in gross sales has to be greater than 25 percent in order to offset the discounted price. A straight discount promotion is fine for introducing a product line or a brand extension. To increase sales of an existing product line, however, the most cost-effective way is to provide a buying incentive or discount in the form of additional product. Buyers recognize a “Buy three, get one free” as tantamount to a 25 percent discount when comparing prices to competing brands. This also moves additional inventory, keeping product fresher and increasing inventory turnover. A popular twist on this strategy is to offer, “Buy one (yard, bag, etc.) and get a second one at half off.” This still equals a 25 percent discount on the total purchase if the customer buys two, and no discount if they only purchase one.
Be Creative With Billing Methods. More and more, we are experiencing wholesale distributors, wholesalers, etc. who are less motivated by SPIFFS (additional rewards provided for the sale of specific products or product volumes) and more motivated by direct economic benefit. If cash flow ability supports it, provide off-season or preseason invoice dating programs. By giving extended 60, 90 or 120 day net due terms, several not so obvious things occur. Delayed billing allows your customer to buy your product and sell all or part of it before having to pay for it. This also moves inventory from your stockpile to your customers’. This sales method does not adversely affect your company’s DSOs (Days for Sales Outstanding) while dramatically improving your customer’s cash flow and his or her inventory turnover ratios at the same time. DSO is a financial tool that averages how long it is taking customers to pay their bill and how effective you are at collections. This is often used by financial institutions as one of many determinants for ascertaining credit worthiness.

David Hill is founder of CycleLogic (www.mycyclelogic.com) in Bethesda, Maryland, an environmental marketing, consultation and business development firm that assists clients in matching recovered materials with reuse markets. Hill has more than 26 years of operations and marketing management in the composting and recycling industry. He can be contacted at hilldm@gmail.com.