Before you set off trying to do this thing called “marketing”, there is probably no single thing more important than that you understand your goals. Specifically, you should have goals at varying degrees of granularity (e.g., strategic goals vs. tactical goals), and regardless of their granularity your marketing goals should be desireable, measurable outcomes.
Many small businesses make the mistake of tacking point marketing solutions on as almost an afterthought when times get desperate. “Quick, I need more customers,” you think. “I should send out some flyers”; or, “I should put up a Facebook page”. Thinking this way is understandable; unfortunately, it is not the way to make your business succeed. If you don’t have a marketing strategy, and goals at both the strategic and tactical level, then you might get lucky — but it’s far more likely that you’ll just end up throwing good money after bad. In fact, you might even be “successful”, but in completely the wrong direction. For example, you might end up getting a bunch more customers, but those customers may be far less profitable than your existing ones. Perhaps it would have been more economical to extract more revenue from existing customers, rather than seeking new one.
So, first things first. Before you even start writing out strategic marketing goals, get a handle on your current situation. A legitimate assessment of where you are in the market. A fairly straight-forward way to think about this is through SWOT analysis. Think hard, dig deep, and be honest — both about the good and the bad. Who are your competitors? What’s your perception in the market? (For that matter, what is your market, both current and target?) Who are your current customers? Who are your potential customers, and how big is your target market?
Once you have a fair picture of your current situation, it should be much more clear what you need to do to succeed. Then, stare out into the future and set some big goals. Figure out where you want to be two, five, or even ten years in the future. Sure, it’s impossible to know what the world will look like that far out. That’s OK. Come back to your strategic plan once a year and reevaluate it. Adjust it as necessary. But if you don’t set these long range goals, you’ll never know where your short term goals are taking you. One way to start is by refining (or creating, if you don’t have) your vision or mission statement. Then, you can derive your long term, measurable goals from that.
Let’s take an example. Say you’re a roofing contractor in Las Angeles. Maybe your vision is to be “the preferred home roofer for LA County”. That statement, combined with your assessment of the market, can lead to some straight-forward, measurable goals. But combining with the assessment is critical if the specific goals are to be achievable. If you’re already a large player in the market, then maybe it makes sense to target 51% market share in 5 years. If you’re mid-sized, maybe it’s to be the largest roofer in 5 years (and maybe “largest” is 4% market share, with the next largest at 3.8% and hundreds of competitors).
Now that you have some goals, it’s time to set out your marketing strategy for achieving those goals. In The Strategic Marketing Plan Audit, Michael Baker defines marketing strategy as a process that can allow an organization to concentrate its limited resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. It’s this last part which is both most important and most often over looked, because of the tendency to think of marketing as advertising or promotion. Your marketing strategy should define your marketing mix.
Marketing mix doesn’t mean your combination of print vs. TV vs. billboard advertising. Instead, it’s the underlying, core tenets that define and explicate your value proposition, from your brand to your unique selling points (USPs. Classically, it’s presented in the four-Ps model: Product, Price, Promotion, and Place. At some point I may write more on marketing mix, but in the short term, if you’re unfamiliar with these concepts, I’d suggest a quick browsing of Wikipedia.
Once your marketing strategy is in place, you can turn to setting your tactical goals to accomplish that strategy. If done well, the articulation of your marketing strategy should enable you to make tactical choices in marketing that expand your horizons well beyond direct mail pieces (though your tactics may well include those as well). For example, if your USPs are in fact unique, you may be able to approach magazines to get an article written about your company. Or, to continue our roofer example, your product strategy may lead you to sign a distribution agreement with large Latin American shingle manufacturer, who in turn may contribute MDF money to your advertising campaigns — dramatically reducing your advertising costs.
That previous one is particularly interesting. If you don’t already employ a senior marketing manager, then it may seem unorthodox to think of product decisions as part of marketing, but they really are. Your product selection (or development) can both directly and indirectly support or oppose your vision and brand development.
And last but not least: measure, measure, measure! Let’s say your long term goal is to grow from 2% to 4% market share over four years, and to do that, you need to be growing at the rate of 3 new deals per month. You might add 3 new deals next month with a direct mail piece. But will you add 12 new deals in the fourth month? How much did you need to increase your budget in the second month to add 6? The key here is that for any particular campaign, there’s an optimal spend. That is, if you spend $600 to get 3 customers ($200/customer), $1,200 to get 8 ($150/customer), and $1,800 to get 10 ($180/customer, but $300/customer for the last 2) you can see that this particular campaign was maximally effective at $1,200. Spending more than that was actually increasing your cost of customer acquisition, so it’s time to look at your other campaigns and see if any of them are more effective than the $300/customer that last round cost you. It doesn’t really matter what the “campaigns” are. The $600 could represent a certain number of minutes of TV commercials, or a certain number of clicks on a web campaign, or the cost of an inside sales rep including telephone bills and commissions. Whatever tactical goals you set, make sure you can measure them, and measure them quickly, or you won’t be able to make the adjustments necessary to achieve your long term goals.
Prosperity to you and your!
Chris