The business value of a company rests on various factors, but is generally understood as the potential financial worth the company brings to its owners, shareholders, or potential buyer. A high business value does not solely rest on a huge turnover and good financial performance – although this is certainly one way to increase the value of a business – but is also increased or reduced by brand recognition and reputation, intellectual property, digital assets, market share, customer satisfaction, and the potential for future growth.
Whether you have just finalised the papers on a new start-up or are looking towards your retirement, enhancing the value business value of your enterprise is a good long-term success strategy, and marketing can help you optimise all the variables that contribute to business value. Let’s look at how a good marketing strategy can impact each aspect:
1) Profitability: a good marketing strategy can help drive more sales and increase revenues, directly impacting profitability. This is a straightforward metric of business value; the more money you make, the more value your company will hold for potential buyers. However, marketing goes beyond the money you make today by helping you identify and target the most lucrative markets and customer segments for future and ongoing marketing campaigns, helping you optimise your resource allocation and increase your profit margin steadily over time.
2) Revenues: marketing activities contribute to your business’s revenue streams in several ways: Directly by attracting and converting customers, and indirectly by helping increase general brand visibility, stimulating customer interest, and driving referrals. Even if your profit margins are currently low, steady revenues are a good indicator of business value, as there are always ways to streamline costs and lengthen your margins if the revenues are there.
3) Assets: in the digital age, not every small business owns property, but that’s not essential. It’s often not bricks and mortar that does the most for business value as it is your company brand. Your company brand is your most valuable asset, and a marketing strategy is key to developing and maintaining this asset. Conscious branding, content marketing, and strategic customer relationship management will all contribute to enhancing the value of this intangible asset long-term. A strong and varied digital asset base, including an authoritative website with good search position, valuable lead magnets, a high ranking blog or YouTube channel, and social platforms with an engaged user base, are all indicators of a successful and valuable business with the potential to make money now and in the future. Other assets involve intellectual property you may own, plant and machinery, and your employees. All contribute to strong business value when you come to sell.
4) Market share: one of the hallmarks of a successful marketing strategy is an increased share of the pie compared to your competitors. Niche businesses in small technical markets with fewer competitors often draw a higher sales value than larger and more profitable businesses in a crowded marketplace. Through competitor analysis, content positioning, and strategic promotional activities, you can expand your customer base and increase your share of the market, increasing your business value.
5) Brand reputation: the public perception of your business goes a long way to increasing its business value, and this reputation is based on your track record for service delivery and customer service, as well as your portfolio of reviews, comments, and social currency on social media and the search engines. One of the roles of digital marketing is to increase business value by developing a strong brand reputation and authority through your content.
6) Growth potential: resilient and agile businesses with the potential to adapt to changing circumstances and technologies are more valuable than rigid business models that could be vulnerable to sudden changes in market fluctuations. Marketing can contribute to your business’s future growth potential by helping you identify new market opportunities, expand into new buyer personas/ideal customer bases, anticipate technological trends, and diversify your content messages.
To find out more about the role that business value plays in our approach to marketing and how you can use a bespoke digital marketing strategy to strengthen the value of your business, please click here to contact one of our marketing specialists today.
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