So far in this blog series you’ve received tons of great business and research resources, you’ve learned the importance of validating your business idea, defining your target market and building your customer persona. But nothing is going to happen until you reach your target market through marketing.
WHAT IS MARKETING?
Marketing includes every activity in which a business participates to sell and deliver its products or services. Marketing is a very broad term and can include everything from researching your target market and communicating to potential customers through advertising and promoting, to selling and delivering the product. Marketing your business in the right way, to the right audience is vital to success. Your business cannot survive without sales and sales rarely happen without some form of marketing.
Many people use these terms interchangeably and you may think it’s no big deal unless you’re writing an academic paper or working in the marketing field; it is a big deal. Unless you understand basic business terminology and the business principles at work, it’s very hard to organize and plan for the future growth of your business in a meaningful way.
Marketing Strategy – Your marketing strategy encompasses the following about your business:
a) Clearly defined product or service – Obviously, you must be able to describe exactly what you do or what you sell.
b) Company Purpose, Vision and Mission – Described perfectly in this article by Carla Johnson of Type A Communications, purpose is the why, vision is the what and mission is the how of your company.
c) Your Target market – Again, you must know who you are trying to reach in order to define a marketing plan to reach them.
d) Your Competition – Who are your direct and indirect competitors? You need a deep understanding of your competitors so you can distinguish your products and services (and how you market them) from theirs.
e) Pricing strategy – Will your business compete in the discount sandbox or the high-end, emotional buying sandbox? Your target market will have a lot to do with your pricing strategy.
f) Your Unique Selling Proposition – What makes your product or service superior or different from the competition and how can you convey that in your marketing message?
g) How will you retain your customers – Obtaining and retaining customers are two different stories. How will you turn a one-time purchase into repeat purchases? Does your product or service even lend itself to repeat purchases? If not, you should think about that.
Marketing Plan – Your marketing plan, describes the efforts and activity put forth to position your business within your market, relative to your competitors. I would consider the marketing strategy as the outline for your business (the who, what, when and where) and the marketing plan to be the actual directions for getting there. Certainly, a marketing strategy without a marketing plan is just a dream. Any efforts to communicate your marketing strategy to your target market will be haphazard and ineffective. Your marketing plan is where you create goals, objectives and determine the tactics and tools to fulfil them.
MARKETING PLAN-PRELIMINARY WORK
Gather Data and Analyze
a) Do you have a recent SWOT analysis? If not, it will be helpful to prepare one:
- What are your business’ internal Strengths? (superior product, customer Service over the top, fast delivery, etc.)
- What are your business’ internal Weaknesses? (rookie staff, cash flow issues, need better equipment, etc.)
- What are your business’ External Opportunities? (few competitors, market booming, etc.)
- What are your business’ External Threats? Industry trends? Economy?
b) Look at your most recent sales numbers and projections
c) Gather all other financial records
d) Refer back to your business plan or most recent marketing plan
e) Analyze all the gathered information to help you with the next step
Determine Your Most Important Current Business Goal
Based on your analysis of the above information, you should be able to determine your most important business goal. Now break your business goal down using “SMART” (specific, measurable, attainable, reasonable and time-bound). To illustrate, let’s say your business goal is to increase sales by 5% this year. Broken down into “SMART goals”, it looks like this:
a) Specific – “Increase sales 5% this year” is “Increase sales” is not specific.
b) Measurable – How will you measure success? “Increase” is not a measurable but “5%” is.
c) Attainable – The easiest way to set yourself up for failure (or cause your team to feel like a failure) is to set unattainable If you set the unrealistic goal of increasing sales by 50%, everyone will feel like they’ve failed even if they obtain an impressive 15% increase. Attainable goals = success, which leads to more success. You may not know this is attainable until you further break it down in your marketing plan (see below).
d) Realistic – Even if your goals are attainable, you must consider the ultimate impact on the overall business and determine if your goals are realistic as well. What if your sales really did increase sales by 5% this year? Would the production line or your vendors be able to keep up? What about the shipping and customer service departments? The reality of your overall business capacity, etc. must be considered when setting your business goals.
e) Time-bound – Of course, you can’t accurately measure whether you achieved your goal unless your goal is to be achieved within a certain period of time. Each goal should be measurable at the end of this time period. In this case the time period is a year but it’s important to break this down into smaller milestones along the way (monthly or at least quarterly) to check progress and allow for adjustments either in your goals or your marketing strategy and tactics (see below).
FORMULATE YOUR MARKETING PLAN
You will now formulate a marketing plan for your business goal. If you have multiple business goals, you will have multiple marketing plans.
Your marketing plan will include:
- specific and quantifiable marketing goals and objectives,
- the tactics you must utilize to reach your goals and objectives?
- budget for implementation
Your marketing goal describes what must happen for you to reach your business goal. In our example, the business goal is to increase sales by 5% this year so break that down as far as possible:
Question – If you want to increase sales by 5%, to what dollar amount does that percentage equate?
Answer – Assume sales were $1.2M last year, a 5% increase equals $60K.
Question – What is your average sale per customer?
Answer – Assume it’s $500 once per year
Question – So, how many new customers must you add this year to generate a $60K increase in sales and meet your business goal?
Answer – You’ll need to add 120 new customers ($60K ÷ $500 = 120)
So, your marketing goal is to add 120 new customers this year, which should enable you to meet your business goal of increasing sales by 5%.
Now you have a marketing goal of adding 120 new customers this year, which will enable you to reach your business goal of a 5% increase in sales.
However, the question now is how are you going to get those 120 new customers? The Answer to this question will become your marketing objective.
Again, let’s break this issue down:
Question – Where do most or all of your customers come from based on your business model and past metrics?
Answer – Assume your business model is solely web-based and therefore your main sales channel is the website.
Question – Examining your website metrics, what percentage of site visitors become qualified leads for sales?
Answer – Assume 5% of site visitors become qualified sales leads
Question – Again, examining your website metrics, what percentage of qualified leads convert to paying customers?
Answer – Assume, on average, you convert 75% of those qualified leads into paying customers
Question – With all of this information to work with, determine how many new site visitors must you generate this year to garner 120 new customers?
Answer – 3,200 new site visitors (120 ÷ .75 = 160 ÷ .05 = 3,200)
Marketing objectives should really be stated in shorter time-frames to allow you to measure often and make changes in tactics (see below) as necessary. Therefore, in our example, you will need to get approximately 267 new site visitors per month for the next 12 months.
Now, break that down into SMART goals and see if it makes sense:
Specific? 267 new site visitors per month for the next 12 months is very specific
Measurable? 267 is not only specific but measurable as well
Attainable? Is it? Check your metrics; how many new site visitors did you have last year? The year before that? And the year before that? For a very simplistic example, if in the last three years your new site visitor numbers per month were Y1=300; Y2=600; Y3=1,200, how many new site visitors do the numbers indicate for this year? You would assume, 2,400, based on the last 3 years’ metrics (2,400 ÷ 12 is an average of 200 new site visitors per month). But to reach your goal, you need 267. That’s 67 site visitors per month more than your numbers indicate.
Again, is this attainable? Those 67 site visitors equate to an increase of approximately 33% over your average yearly increase. You would need to discuss this with your marketing professional to determine if they can suggest marketing tactics (see below) that will allow you to attain this objective. They may tell you it is attainable, that t’s impossible, or that it’s attainable, but under different time or budget parameters. At this point you may have to either adjust your budget, time-constraints, or even your business goal.
Realistic? This is where your business goals are put to the “reality test”. Based on what your marketing professional tells you, is this objective realistic? Can it be done considering the rest of your plans, your budget, your existing website and branding, etc.?
Time-bound? You’re measuring your objective at 267 new site visitors per month, which is time-bound and can be measured and adjusted along the way if necessary.
Let’s assume you and your marketing professional have determined your marketing objectives make sense. You must now decide which marketing tactics you’ll use to achieve your objective.
Marketing tactics are the specific tools you’ll use during this process, which will lead to the achievement of your marketing objective, your marketing goal and ultimately, your business goal! In other words, what specific measures are you going to undertake to lead to 267 new site visitors per month, leading to presumably 120 new customers, resulting in an additional $60K in sales, which is a 5% increase over last year? Here are a few examples of general marketing tactics:
a) Content Marketing
b) Social Media Marketing
c) Organic Search Engine Optimization
d) Paid Ads
e) Free Trials
g) Email Marketing
These general tactics, however, do not go far enough. You must now break each one down into the very specific steps you will take to get you closer to your objective. For example, content marketing may include a) writing a 700-word blog post three times every week with a minimum of 5 links back to website content and each one focusing on 3 keywords and b) writing a guest blog post on a key market influencer’s blog at least once a month with a free offer that leads back to your website.
So for each tactic you will plan out the very specific details of how they will be carried out, always keeping your objective in mind.
Budget is a big consideration for most businesses. Money for marketing does not always seem plentiful. But if you look at marketing as the driving force behind your entire business, you’ll realize it’s your most important money spent.
If you’ve been in business a while it will be easier to determine a marketing budget for each marketing plan. The general rule of thumb for a yearly marketing budget is 10% of gross revenues. So, depending on what your business goals are, you will need to determine how much of this budget you use for each marketing plan (of course, if you have one major goal and plan, you use the entire budget!). Whether you have a mature business or are starting a new business, your marketing professional will be able to help you determine the budget based on your business goals.
Now, get out there and start planning!