Assessing Your Company s Marketing Strategy
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- Randolf Little
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1 The following Survival Guide supplemental resource is provided by Self Employment in the Arts advisory board member Gary Vaughan and is made possible in part by support from The Coleman Foundation Assessing Your Company s Marketing Strategy By Gary Vaughan. Forward In my work I have often been approached with these questions; Do you think this is a good idea and should I go into business? I usually asked them to further describe their business idea for me. They begin by speaking calmly and at an average pace, then, as they begin to get excited, their voice tone starts to rise, the pace of their speech increases and they often become animated. This is a great sign, since it shows they have a true passion for what they are describing. Passion for what you re doing is one of the critical ingredients for success as a small business owner. Next I ask them to describe their competitive advantage. If they respond with, What s that? I tell them not to quit their day job; end of discussion. Having and identifying a competitive advantage is so important that if a business owner cannot describe their competitive advantage then I believe they are destined for failure. Once you have identified your competitive advantage you should climb the tallest mountain and shout it out for all to hear. OK, maybe a bit dramatic, but in all seriousness, your marketing message must include your competitive advantage. To begin, identify your competitive advantage(s) and then set up your marketing strategies. What is your company s competitive advantage? As the owner of your business, you must identify or develop your company s competitive advantage. Once you ve done that, you have to teach your key management and employees how you plan to use your competitive advantage to outsell the competition and increase your company s market share. In order to identify your competitive advantage you should compare the advantages and disadvantages of your business against two or more competitors. Pay particular attention in the major areas of; price, location, image, products/services, customer service, and quality. A great tool to identify your competitive advantage is a SWOT analysis. The SWOT analysis identifies the Strengths and Weaknesses within your organization and the Opportunities and 1
2 Threats outside of your organization. Companies often do a nice SWOT but typically fall short on the analysis of the information collected. Don t let your organization fall into this trap. Your competitive advantage(s) should prove to both your present and future customers that your organization is distinct from your competition. You will then have to differentiate your products/services from those of your competition by communicating the differences and promoting the advantage(s) you provide, over and over again. Sustainable businesses have identified and communicated their competitive advantage(s) as part of their branding efforts. Here is an example of a competitive advantage; each morning I stop at a local drive-thru coffee shop where the coffee tastes good, is affordable, and the access into and out of the drive-thru is easy to maneuver. I do this often enough that I would consider this MY coffee shop and an important part of my morning routine. Now, let s say you open a drive-thru coffee shop directly across the street from MY coffee shop. How are you going to get me to stop buying coffee at MY drive-thru and instead spend my coffee allowance at YOUR drive-thru? If you are successful, whatever the reason, that reason is your competitive advantage. Identify it and communicate it to all who will listen. Have you identified your customer s profile? A question I would ask you is this; Am I one of your potential customers? You may not know it yet because, as a potential customer you haven t met me, talked to me, nor do you know anything about me. Can you say the same for your current customers? Have you met them or talked with them? What do you know about them and is what you do know enough information? Not what information you guess about them, but what information do you know for certain about them? These are important questions when developing a marketing plan. Your customer profile will consist of demographic information. Demographics are the social and economic characteristics that describe us such as; age, gender, location, education, occupation, income level, and household type. These characteristics make up the lives of your customers. Knowing this data about your customers will help you develop the best message and target the media best suited to communicate with your customers. Finding this customer specific information can be an art and if you or your staff are not proficient working with research websites, I would suggest consulting with a marketing professional to help identify this data. If you do not identify the correct customer profile before developing your marketing strategy, you could be delivering a good message to the wrong target market. Next time you re watching your favorite television show pay attention to the commercials. In our house I often turn to my wife and say, I certainly wasn t the target audience for that commercial, I didn t even get what they were selling! See if you don t find yourself making the same statement. The right message to the right audience doesn t happen by chance. 2
3 Do you know your target market? Once you have identified the demographics of your customer base, you must decide if the market area you are currently serving is adequate to support the sales you ve determined you need to sustain your business. To do this you will use valid sources to determine the Fit of your market. The Fit is essentially estimating how many of your target customers reside in a predetermined market. All of the above information can be researched by using the Internet, customer polls and surveys, and various media sources where demographic information can be accumulated and validated by reliable data. As the owner you must determine, through an educated guess and intuition, what percent of your targeted customers within an identified market are your current customers and what percent have a high potential to become new customers. This information is critical when analyzing the potential of your current market and is used in creating a sales forecast prior to entering a new market. If your research shows that your intended target market is not going to support another competitor, you may want to save your investment and not enter into that market. Knowing this prior to entering a market is critical to making the best decision for your organization. If your research shows a huge potential in a market you are currently not operating in, you may want to allocate more marketing dollars to take advantage of the opportunities this unmet need provides within that market. Being proactive by performing market research has the potential to save your organization both marketing and operating dollars. Do you know where your customers get their information? Identifying where your customers get their information can save you dollars by ensuring your company s marketing message is reaching your target audience. Just think about your own habits and how they have changed in the last decade. How many households do not get the daily newspaper or even the Sunday newspaper? Many newspapers have gone out of business or are now only found on-line. How many people use their I-Pods to download and listen to audio books? Even billboards are becoming digital and change several times during a typical stretch of highway. We are in the digital age and business owners of my generation have to get up to speed. By using the customer data you gathered earlier, you can now identify where your customers get their information. Getting your information in front of these customers, in their preferred format, is crucial and you don t want to spend marketing dollars on media your target customers aren t seeing. Once you have determined where your customers get their information you will want to communicate your competitive advantage to them by answering these three questions: What s 3
4 this?, grabbing your customers attention so they are receptive to your message; what s in it for them? creating or injecting the desire for your product or service; and What do they do next? motivating your customers to act by using a call-to-action statement, which invites your customers to buy your products/services or redeem a coupon, for example. A word of caution, don t underestimate the power of the various social media available. As a small business owner you should be aware of the most popular and upcoming social media. You don t have to participate in all of the various types, and as a matter of fact, you may not want to use them at all, however, these very powerful and inexpensive forms of marketing are currently standard in many companies marketing plans and strategies. At the very least, you should understand what they are and the potential they may offer your business. Also, know what social media your competition is using and how they are communicating their messages. By locating where your customers get their information, you will be assured of delivering your marketing message to the most customers thus optimizing your promotional dollars. Do you have a formal marketing plan? Your operating budget should have a designated dollar amount to support your marketing budget. A good marketing plan determines what percentage of your marketing budget will be spent on advertising, personal selling, sales promotions, and publicity. It states what type of media is best to invest your marketing dollars, depending on what your message is and to whom you are speaking. It identifies the best vehicle to use for communicating your message such as; newspapers, magazines, television, billboards, direct mail, printed flyers and brochures, promotional displays, and your website. Each item will have a budget amount tied to them. A marketing plan will coordinate the branding of your company via your business cards, your building signage (if applicable), your stationary, your uniforms and anything else used to identify your company to the public. Formalizing a plan and tracking the effectiveness of each media used within the plan is important to the future success of your company s marketing goals. A good marketing plan usually includes these components: A description of your business; Locations of your operations; An analysis of your operational advantages and disadvantages; Identification of your products and services; An analysis of your competition; An analysis of the current economic conditions; 4
5 A SWOT Analysis featuring strengths and weaknesses within your organization and opportunities and threats outside of your organization; and Specific strategies you should employ such as: Point of Sale Ideas Formal and informal networking Branding strategies Promotion ideas I often find businesses operating without a marketing budget. I cannot stress the importance of establishing a marketing budget and staying within that budget. I like to see the marketing budget as a percentage of total revenues. As total revenues increase so does the marketing budget, giving you more options for marketing. As you employ more options, and consequently spend more on marketing, your total revenues will increase as your customers become more informed. An effective marketing strategy should be designed to drive revenues. Do you have an annual marketing budget? Establishing an annual marketing budget and including it as an expense in your profit and loss statement will assure you that your advertising dollars will be within an acceptable range. By using an annual budget you will be able to react to the seasonality of your business cycle and advertise when the promotion will have the greatest impact on your revenues. You should plan on spending more marketing dollars prior to the months when sales have historically been weak; this can greatly improve future revenues other areas of your company, such as work flow and cash flow. Establishing an annual marketing calendar can help you avoid spending money on impromptu marketing that does not reach your target market. You will be able to track specific promotions and trade shows to determine if the marketing dollars spent generated the desired increase in revenues. By creating a marketing calendar you will be able to plan your marketing activities on a monthly, quarterly, and annual basis. You will develop a history and be able to use this plan as a template and basis for creating subsequent marketing plans. For example, you will know what you spent on this year s anniversary sale and that information will help you budget for next year s anniversary sale. Another financial statement that will be positively affected by a marketing budget will be your cash flow statement. The better the planning the better the management, no matter what the area within your business and marketing is no different. 5
6 Which leads are producing ROI? Tracking and evaluating the performance of several media options will assist you in determining which options are generating the best results for your business. If you do not track the results in writing, listing the media names, the development and placement costs of the advertisement, and the number of exposures during the designated time period, you cannot fully evaluate the Return on Investment ( ROI ) for a specific media. Tracking depends heavily on being able to understand what media your customers use to find your products/services. To get the best data, you have to get the information directly from customers. One way to do this is to conduct telephone interviews of your current customers. Another option you can use polls and/or surveys to ask your customers where they heard about your products and services. This data is then compiled, analyzed, and used when developing your annual marketing plan and budget. Does your company have a website? You know your company needs business cards and brochures to communicate to your customers; well, in this day and age a website is an equally important tool to use to promote your business. A good website can enhance your company s credibility; it is an extension of your business. Providing information on you website that assists your customers in solving a problem is no different than helping your customers when they call your office for assistance. Having an effective (not necessarily flashy with all the bells and whistles) website can help your company in several ways: Improve the productivity of your staff because the answers to routine questions can be found on your website; It provides continuous promotion of your company; You may be able to find customers, or even markets, you didn t previously have; Can lead to increased profits; Customers can ask questions 24 hours per day, making them feel as though your company is always open; and Can provide qualified leads. By having the ability to process transactions on-line your website can help drive revenues for your company; allowing you to sell to anyone, anywhere in the world, at any time of day. The majority of business websites are hosted by providers who offer a wide range of options including the quantity of megabytes you can store; the number of accounts available, and 6
7 how many gigabytes of data transfer are allowed, to name a few. You should consult a website development company to assist you with initially creating your website. Do you understand how SEO works for your website? The main reason you invested in your website is so your customers can find more information about your products and services on the web. In order to do this, they will generally use search engines like; Google, Yahoo, MSN Search, and Altavista, to name a few. It s important to make sure that when your customers or potential customers are looking for you on the web, they find you and not someone else. A key component of getting found online is having the appropriate keywords or phrases imbedded within your entire website. These keywords and phrases are used by the search engines to rank your website. The more relevant your keywords are to what potential customers are searching for, the greater the likelihood the web crawlers software will find your site. This is called Search Engine Optimization ( SEO ). Your goal with your company website should be to appear on the first page of search results when any of your keywords or phrases are entered into one of these search engines. Ideally, you want to be at or near the top of the page ( above the fold ). If that isn t currently happening, you need to think about what you can do to raise your ranking. Here is where you will want to talk to a marketing professional who specializes in website development. Search Engine Optimization (SEO) is the engine of your website. You can have a great looking and very informative website but like most marketing tools, it will only work if your customers can find the message. SEO is a key component in defining how your current investment in your website will pay you dividends in the future. Should your company be using social media? Facebook, Twitter, Linked In, etc. you ve probably asked yourself if this is even English. You may find this new world of marketing may become a vital part of you marketing plan appealing to a vast number and variety of potential customers. So, where do you start? In order to determine whether you should, or want to use social media to promote your company, you first have to determine what you want to achieve by entering this new marketing realm. Once you determine that you may indeed benefit from it, you need to ensure that you develop a social media plan, as part of your overall marketing plan. A word of caution; social media isn t intended to take the place of marketing you re currently doing, it should be used to enhance it. Just because social media tools are available to everyone and are free doesn t mean everyone should be using them. To help you determine if they re right for your company, make sure you understand how each of them works. In addition, here are some questions to ask: 7
8 Are you looking for broader brand awareness? Are you interested in driving more traffic to your website? Do you want to collect more information about your customers? Do you want to build buzz about a particular product/service? If you answered yes to these questions, you re a good candidate for marketing through social media. Before you begin using any social media, it s very important that you determine how you re going to measure success. If you can t measure the results, you will not be successful; you won t be able to benchmark and therefore you won t be able to determine if you need to make any changes. A marketing professional can help you get registered on the various sites and determine which are best for your needs. Conclusion Business owners hire lawyers to draft the documents legally necessary to establish companies. Very few will, or should, do this on their own and take the risk of not having the proper legal protection. Owners perform due diligence before they hire a CPA to do the company s year-end taxes. Most business owners do not do their own taxes because they fear they may overpay or worse, incur penalties due to the fact that they don t have a thorough understanding of tax laws. If a business owner does not feel qualified to perform legal duties or create tax returns because they are not trained in these areas, why do they feel they can do a better job marketing their company than a marketing professional? I can t answer this question but I do see businesses every day that could use a marketing professional on their team, either as an advisor or a paid professional. Gary Vaughan has shown a passion for helping business owners through his work in economic development and working with small businesses counseling them to sustainability and growth. His management experience is in several industries including; retail, petroleum, and manufacturing. Gary has been a partner in a manufacturing firm for eight years where he was responsible for financials, administration, human resources, and safety compliance. Gary is currently an Instructor of Innovation and Entrepreneurship and the Coordinator of their Innovation and Entrepreneurship Interdisciplinary Area at Lawrence University located in Appleton, WI. Gary launched Guident Business Solutions, LLC, a management and consulting firm in He specializes in firms of less than $10MM in revenues and under 50 employees. Gary is a member of the board of directors for the Fox Cities Chamber of Commerce and also sits on their finance committee. He is an active board member of the Self Employment in the Arts organization and often speaks at their annual conference. 8
9 Gary has volunteered as a judge for the Wisconsin Governor s Business Plan Contest for the past several years. 9
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