Promote stars. Milk cows. Watch question marks. Retire dogs
June 11, 2012
(Marketing perspectives for small business owners. Contributed by Perry Ballard, owner of Manage Perceived Value and a past chair of SBAM’s Strategic Communications Advisory Committee)
As in your business, my marketing communications firm was a blend of service (creating the plans and messages) and product (providing a tangible tool to use — brochures, ads, manuals, etc.).
The Internet nearly eliminated the brochure business. Prospect requests of “I need a brochure” became a solid client income source — updated at least annually due to depletion via sales distribution or outdated by new/modified products.
But who needs a 36-page printed brochure when the customer can print the exact page they need? And why reprint when a web site update corrects your “brochure”?
The Internet changed our staffing, pricing, product offering, support systems, training, and company marketing efforts. It also turned cows into dogs.
Cash Cows, Stars, Question marks and Dogs are the shorthand terms used in the Boston Consulting Group (BCG) Growth/Share matrix to help you evaluate products or clients and take action based on rational market analysis.
Products or clients, cash cows have a high market share in a slow growth industry. They produce excess cash with little added investment. Dogs have low market share in a slow growth industry; they “break even” or lose money and need to be replaced. Question marks have growth potential but low market share. They could become stars, but need time/dollar investments and close monitoring. Stars are high-share, fast growing business segments. Knowing how each client or product fits lets you make the best use of your limited resources.
The Business Next audio semnar and Focus magazine (see below) list steps to identify categories. It isn’t easy, but a tight BCG matrix evaluation can mean the difference between a profit and a lot of wasted resources.
(Hear an interview with Perry about the BCG Growth/Share Matrix today on Michael Rogers’ Business Next audio seminar. And read a detailed article about the Matrix in SBAM’s member-only Focus on Small Business magazine, in member mailboxes beginning July 6.)