Courtesy navigation

Market your business

Marketing is about much more than the popular promotional methods it employs, such as advertising and direct mailing. In reality, it is the comprehensive process of planning and carrying out the conception, pricing, promotion and distribution of goods or services to meet predetermined business objectives.

An effective marketing campaign requires a lot of thought. You have to weigh up the strengths and weaknesses of all your competitors. This can enable you to specialise, fill niches in the market and reap the rewards.

If you are thinking about marketing for the first time, it is wise to carry out a SWOT analysis of your business to define your strengths and weaknesses, as well as opportunities open to you and any threats you face. You also need to identify any selling points your business or product might have that separate you from your competitors.

Understanding your customers is vital. Only by knowing their needs, tastes and habits can you identify the key messages you need to get across when highlighting the benefits your product or service offers. You also need to know the best ways of making sure this information reaches your target market. As with most things, it pays to have a well thought-out plan, which sets out your objectives and how you intend to achieve them.

1 Weigh up the competition

1.1 List your competitors and their products and services.

Research the market well. Don't forget indirect competitors. For example, a new restaurant might have to compete with the local cinema as a 'night out'.

Carry out a detailed analysis of your competitors' strengths and weaknesses. If necessary, test their products or services.

Find out about their prices.

Identify which customers they serve.

Look at the potential they have to improve their services or upgrade their products.

Assessing the competition will give you an idea of what you can do to establish a niche in the market.

1.2 Find gaps where you can become a market leader.

Look for niches in the market where, as a specialist, you can offer a superior product. Small businesses succeed by becoming leaders in niche markets.

Think in terms of 'stepping stones'. Unless you have an exceptionally strong offer, a start-up business should seek to establish itself in niches with little or no competition. Then, once you have a track record and a customer base, you can target more profitable niches.

The more lucrative a market niche is, the fiercer the competition will be.

2 Assess your business: a swot analysis

2.1 List your business strengths.

Consider critical success factors such as customer service, product (or service) performance, price, quality or range.

Compare your strengths against those of your competitors.

  • A key strength of many new businesses is their dedication to excellence. This is necessary to build up a good reputation and to achieve word-of-mouth recommendations to other potential customers.
  • Existing personal or business relationships can provide a useful foundation to build from.
  • The key strength of many established businesses is their customer base, because people tend to prefer to buy from people they know.

2.2 List your business weaknesses.

These could include a limited number of employees, or a lack of funds, customers, knowledge or experience. The fact that you are a new business without a track record could also be seen as a weakness.

Thinking about your competitors' strengths might help you to identify some of your weaknesses.

  • Finding and selling to new customers is an essential part of growing your business. You may need to overcome a lack of sales skills and confidence.

2.3 List possible business opportunities.

For example, selling your goods or services online or to overseas markets, perhaps selling to a business with an existing group of customers.

When your business is established, opportunities can arise when your competitors experience difficulties or when market trends shift.

Thinking about your competitors' weaknesses might help you to identify possible business opportunities.

2.4 List potential threats to your business.

Threats can seem minor, however, they can have the potential to destroy your business. This is why you need to give them serious consideration.

They can include the emergence of a new competitor, a competitor introducing a new product or over-reliance on one supplier.

3 Know your market

3.1 Segment your market into groups.

For example, an interior-design company might service the residential, small business and corporate markets, as well as a niche such as the education sector.

Segmentation helps you to spot the best opportunities and to then develop special know-how.

3.2 Understand your customers.

Having identified your potential customers, you need to ask them key questions such as:

Make sure you understand the different requirements and challenges of each market segment.

  • How do they choose between the businesses from which they buy?
  • In which quantity do they buy and how do they pay?
  • What do they think about competitors' products/services?
  • What do they most value in products/services like yours?
  • Which individuals control the budget and make the purchasing decision if your customers are other businesses?
  • What do they think about your product or service - including its price and the benefits it offers them?
  • How can you improve your product and customer service?
  • For example, you might need to overcome cultural or language barriers to sell effectively to different ethnic groups or overseas markets.

3.3 Identify all of your distribution channels.

Explore all options open to you when thinking about how to get your product or service to market.

 

Clever distribution can be the key to success. For example, by using firms of accountants as its sales and installation partners, accounting software firm Sage grew rapidly from a start-up to sales of more than £500 million.

4 Sharpen your offer

4.1 Realise the benefits you offer customers.

For example, the benefit of a light drill is that it is easy to handle. The benefit of a heavier drill might be that it is more powerful. The benefit of a cordless drill is that you can use it anywhere.

To understand your product's key selling points, put yourself in the shoes of each customer.

Don't confuse features with benefits. Teflon coating is a feature of many frying pans. The benefit is that food does not stick to the frying pan, which is easier to clean as a result.

Features are worthless unless they provide the consumer with benefits. These are what you need to focus on when thinking about your offer.

4.2 Identify your business' unique selling proposition (USP).

Your USP is the thing that sets you apart from competitors. You can have more than one.

To help you identify these, ask yourself: "Why would anyone buy from my business instead of my competitors?".

Most businesses claim to offer high-quality products or services backed by fast and reliable service. This does not provide the basis for a USP. Being the only bakery in town that bakes bread from fresh, organic ingredients on a daily basis is a USP.

Offering the lowest price can be a USP; however, it is dangerous to rely purely on this. Identify other benefits as well.

4.3 Be ready to establish your credibility, instantly.

Measurement is a powerful differentiator. For example, saying "I redesigned a client's website and visitor numbers then rose by 50% in six months" sounds compelling. Merely saying that numbers rose is not as convincing.

In most sectors, being able to show a track record is vital. So aim to get some high-profile names on your customer list as quickly as possible, even if you have to cut your profit margins right back to achieve this.

Good sales and marketing material ('collateral') can help to turn an enquiry into a sale. This could take the form of a high-quality brochure containing customer testimonials and case studies that illustrate the benefits of your product. All of your marketing collateral - including your website - should be rich in such content.

5 Set your objectives

5.1 Select potential customers you need to target.

Work out who you are most likely to be able to sell to. It is likely that you already have a good idea, however, knowing who your competitors sell to might help you to identify other customers (see section 1.1).

Prioritise marketing to customers that are most likely to give you major revenue streams in the future. In most businesses, 20% of customers account for 80% of revenue.

Segmenting your market (see section 3.1) will help you to identify which customers offer the best returns.

5.2 Decide which products you should push.

These are the ones most likely to prove popular, or those with the highest profit margins.

It is useful to have some 'door-opener' items to help you win a new customer in the first place.

  • For example, a management training company might give away a guide to managing staff absenteeism, follow up by asking people what they thought of the publication, then offer some related training.

5.3 Aim to build up a market position.

Start with a narrow focus. For example, you might aim to be the UK's leading specialist supplier of children's waterproof riding trousers. From this market position, you can then branch out into other riding or waterproof clothing.

When launching anything new, it is often advisable to get a few 'reference sites' in place before you market to a wider audience. A reference site is a happy customer who will act as a reference for you, which should greatly increase your sales-conversion success rate.

6 Promote your business

6.1 Formulate your key messages.

Combine your key business strengths, USP(s) and benefits your products or services provide to customers. These are the key messages you need to convey when promoting your business.

Think about how you want potential customers to contact you. You might want to refer them to your website to find out more, saving you from having to cope with a deluge of telephone calls. Alternatively, you might want people to telephone or email your business directly.

Give serious consideration to how you will manage responses from any marketing or advertising campaign you launch.

6.2 Decide on a medium.

Think about how you are most likely to get your key messages across to potential consumers.

There are four main options:

A campaign might combine some or all of the above.

Explore all options that are free.

  • direct marketing (mailshots etc.)
  • exhibiting at trade fairs
  • advertising and public relations (PR)
  • online marketing (using email or the internet)
  • You can get a free one-line entry in Yellow Pages (however, you might think it better to pay to have an increased presence).
  • Check that your business appears in all free-entry directories.

Find out more about direct marketing on the Direct Marketing Association website

6.3 Learn from others.

Speak to other business owners and managers to find out which marketing and advertising methods haave proved most successful for them.

6.4 Find out how your competitors promote themselves.

If none of them advertise in magazines perhaps this is because it doesn't achieve the desired effect. If they regularly advertise in a particular newspaper maybe this does work.

Do they rely heavily on direct marketing or online methods? Have you seen stories about them in the press?

Don't simply copy your competitors' strategy. It might not be working. Always find out more and focus on meeting your business objectives.

6.5 Discover what works.

This is a major advantage of direct marketing. For example you can send a mailshot to a dozen people to see how well it works before committing further time and effort to a larger mail-out. Similarly, you could try five different mailshots to a dozen people each, to see what works best.

6.6 Consider using a marketing or PR consultant

This enables you to save yourself time and effort, as well as capitalise on their knowledge, experience and contacts. However, you need to weigh the cost against likely returns. Using such consultants can be expensive.

7 Devise a plan

7.1 Think about the 'marketing mix'.

When devising a marketing strategy many find it useful to think in terms of the 'marketing mix', also referred to as the 'four Ps':

  • Product (the product or service you offer).
  • Price (its cost to your customer).
  • Place (who and where you customer is).
  • Promotion (getting your message across effectively).

7.2 Draw up a marketing action plan.

This should detail exactly what you are going to do and the results you expect to achieve. It acts as a benchmark against which you can measure success.

Read about marketing techniques and use a free marketing planning tool from the marketing resources section of the Chartered Institute of Marketing website

7.3 Be realistic about your resources.

Once you identify the marketing and advertising methods you want to use, you still have to work within your resources.

  • Your cashflow might mean that there is no money to spend on marketing during certain months.
  • A lack of staff might mean that you can only handle a small flow of sales leads.

7.4 Measure results and learn from them.

While your campaign is in effect, create a sales enquiry form to record how respondents heard of your business. Use coding to identify sources (eg 'MS 20/10/12' for a mailshot on 20 October).

Calculate success ('conversion') rates, tracking both leads and orders you receive as a result.

Compare the cost of acquiring each new customer with how much revenue it brought you and how much revenue it is likely to bring you in the future.

Learn which methods and strategies brought you the most valuable custom and aim to replicate these in the future.

Avoid methods and strategies that did not work.

Remain open to new ways to market your business (eg you might choose to add an online marketing dimension to an existing campaign).

8 Gain from everyday marketing

8.1 Retain customers and get personal recommendations.

For most businesses, selling to an existing customer costs much less than attracting sales from new customers.

Personal recommendations are the best form of marketing for any business, with no costs involved and extremely high rates of conversion into sales.

8.2 Use every customer interaction as a chance to impress.

You and your staff are the company as far as the customer is concerned. Every detail counts, such as answering the phone quickly and professionally.

The more enthusiastic you are about your business, the more enthusiastic others will be. If customers trust and like you - and if they get real benefits from doing business with you - they will recommend you to others.

8.3 Think about the image you want to portray.

If you offer the cheapest delivery service in town, then using a rusty old van might be fine. But if you want a reputation for reliability and professionalism, having a clean new van and a uniformed driver will help you.

SIGNPOST