Nine FAQs on planning your marketing.
- Where do I start?
- What will my marketing strategy do for me?
- What are the generic marketing methods I can use?
- Why do I need a written marketing action plan, and what must it cover?
- How often should I audit my marketing and update the plan?
- Is marketing to businesses different from consumer marketing?
- How do I know what my sales will be?
- How do I track what is working?
- What am I most likely to get wrong?
1. Where do I start?
Profitable marketing for small businesses involves identifying gaps in the market not covered by mass providers. You must identify a need that can be met profitably, in reasonable volume, where price is not the main criterion for purchase.
- Research the competition.
- Match customer needs with what you can realistically supply.
- Run tests and trials before you fully commit.
- Cost and budget your plans to meet your objectives.
Assuming that your business is already up and running, look ahead, say two to three years, and decide how much revenue you will need to generate the profitability you require.
Next, ask yourself if you will achieve those results if your business carries on as it is today, using your current business plan. If the answer is yes, then you might not need to do much more than maintain your course. If the answer is no, then you need a new marketing strategy geared to meeting your objectives.
Start by reviewing your business performance to establish where you are stronger or weaker than your competitors. Also consider what external factors could impact on your business or on your relationship with customers. These factors could be threats or opportunities. The prime objective of marketing is to make sure your resources are focused on only the best, most accessible business opportunities.
2. What will my marketing strategy do for me?
Your strategy is the route map that defines how you will achieve your marketing objectives. Broadly, there are four marketing objectives for most businesses.
- Increase penetration into existing markets with existing products or services.
- Develop new markets for existing products or services.
- Innovate by developing new products or services.
- Diversify into new markets with new products or services.
Most small businesses do not have the resources to attempt all these objectives at once. You will do better to focus on just one or two of them.
The most appropriate strategy will only emerge as you review your marketing journey. This can be based on three questions: Where are we now? Where do we want to be? What strategy will get us there?
3. What are the generic marketing methods I can use?
You need to draw up a profile of the needs of your target customers and then decide how best to reach them. A SWOT analysis may help. You should be aiming to pinpoint five major elements.
- A target list, broken down into segments.
- What your target customers need (think benefits, not features).
- Prices, maybe using differential pricing for different segments.
- How to reach your customers (website, email, text marketing, social media, advertising, leaflet drops, direct mail and telesales).
- The offer (innovative edge, rarity value, more benefits than the competition).
4. Why do I need a written marketing action plan, and what must it cover?
Committing your plans to paper is the best way to turn your ideas into reality.
- A written plan makes it easier for managers to understand where the company is going and the part they have to play.
- A written marketing plan can also be invaluable in making the case for a bank loan, or attracting investment.
- A written plan provides a quantifiable basis for measurement and review at the end of the exercise.
A marketing plan will usually include:
- a brief mission statement about the purpose of the business
- a summary of the previous year's performance
- financial objectives for three-year and next-year periods
- market overview
- key factors identified in SWOT analysis
- marketing objectives and strategy
- underlying assumptions about marketing objectives
- forecasts and budgets
- detailed programmes for the next year (who does what, when?)
The degree of formality needed will depend on the size and complexity of the business. Small companies can cover what they need on just a few sheets of paper.
5. How often should I audit my marketing and update the plan?
You should make some kind of regular check on progress every month. As long as the signs are good then a more in-depth review can take place bi-annually. However, always analyse the result of specific campaigns as they happen and, if necessary, adjust your plan accordingly.
Plan two or three years ahead in broad outline, but plot the next year in more detail. Try to stick to your plan but be prepared to be flexible if circumstances change.
6. Is marketing to businesses different from consumer marketing?
Business-to-business marketing tends to be more targeted, as prospects can be more easily identified. Business-to-business marketing typically revolves around building relationships - through networking, personalised marketing communications and direct selling.
7. How do I know what my sales will be?
Sales forecasting is not an exact science, but it is much easier for established businesses that can base their estimates on last year's figures. Start-ups should beware of basing their plans on sales forecasts that are too ambitious. Companies House can provide you with copies of the accounts filed by your competitors - but only, of course, limited companies. It's worth measuring your progress against the market leader but expecting to grab any more than 5% of the market would be ambitious in the first year.
8. How do I track what is working?
For most businesses, 80% of the most profitable sales come from 20% of the customers. Track what is happening with these key customers to safeguard the most important chunk of your business.
It is important to monitor the number of new contacts made each week and to check how many of these result in a sale. Without new contacts in the pipeline, sales will dry up. Be alert for mistakes - the stage at which the sales process breaks down will give a valuable insight into possible areas for improvement. Similarly there will be a point in your sales pitch where you typically get the buyer's agreement. Learn from both the positive and negative experiences.
You should measure the effectiveness of all of your marketing efforts. Most online marketing - including social media, website content and email marketing - offers tools for analysing customer engagement. These tools can help you discover what is working and what it having a limited impact.
9. What am I most likely to get wrong?
- Everything takes longer than shown in your plan. Allow for extra costs and slow payers. In the early days, cash will be more important than profits.
- Pricing. When launching new products, it can be difficult to establish the right price for the market position you have chosen, but it is usually better to start off with a higher price and offer reductions for volume. It will be much harder to put prices up later.
- With any marketing or advertising - whether online or offline - it may take time to get results. "Repetition is reputation", as the advertising gurus say.
- Do not waste your energy on time-wasters. Work to a hot prospect list that will form the backbone of a profitable business.
Planning your marketing is a logical and practical process, which can and should be measured and, if necessary, adjusted. Use market research, consumer testing and SWOT analysis to help shape your plan.
Those businesses that get it wrong tend to be those who either don't plan or whose plan is based on hunches. Guesswork is free - but completely unreliable. The only sensible way to move forward is to know in advance where you are headed.