Consulting

Serving the Wrong Market

In some cases, geographical expansion can throw a wrench in years of experiential success. Take the case where a business owner came to us with an exceptionally successful brand with better than a fifteen-year track record of success. They were stymied by the fact that one branch could not seem to make money. While all of their branches were returning a healthy profit month over month, this one branch was posting significant losses every single month. Owners were confused, they transferred their top talent over, tried several promotions, and pretty much everything else they could think of. Nothing worked. By the time they reached out to us, they were beyond the point of frustration.

A thorough analysis of the regional market showed that the demographic of this area was significantly different from the other branches. While on the surface, all of the indicators the organization looked at were well aligned with their growth strategy and consistent with other areas. The area was experiencing significant growth, the people moving to the area were within the proper age demographics at the center of their target market, and property tax values were high. Looking a little bit deeper, however, revealed that the growth in this particular neighborhood was occurring at a much higher leverage ratio than other markets where the organization thrived. Careful examination revealed that the problem was that there was a significant gap in the liquidity of the market, which impacted the ability rather than the desire to patronize our client’s branch. No amount of marketing or brand development could bridge the gap, and the brand itself was a deterrent to many within the market based on a well-established understanding of the price point.

How Blue Sky Helped

With this client, we were able to pivot the entire branch to develop a new brand and product offering that better aligned with the demographic. With a lower price point and a brand identity that offered high quality and a touch of nostalgia, the company was able to diversify its portfolio while righting their ship. Within four months, the branch was turning a healthy profit, and they never looked back. Out of this process, we were able to provide a better tool for targeting geographic expansion opportunities, a second brand offering for serving multiple end markets, and profitability where there were previously significant losses.