Marketing Strategy

One of the most essential things that will be a factor towards the long-term sustainable success of your business venture is setting out and implementing a successful marketing strategy.

Despite this, most businesses do not have set out their marketing strategy or, even if they do, it is not followed and implemented comprehensively. Businesses that have the vision to create a vibrant, customer-focused marketing strategy, and the resolve to implement it, will have a real opportunity to do something wonderful with their business.

If you set out your marketing strategy properly you will create the 'buzz' that will set you apart from your competitors.

Having a marketing strategy is different to having a marketing plan. A marketing strategy involves choosing a realistic, measurable and ambitious goal that you think your business can achieve on a sustainable basis. Each marketing tactic you use should be 100% focused on reaching and surpassing that overall goal.

A marketing plan includes all of the tactics and actions that are designed to achieve the overall strategic goal, and a timetable for their implementation. In other words, the plan will detail what you will do to make the strategy happen.

The vast majority of businesses in all sectors market themselves the same way as their competitors, with supply-driven marketing messages based on product features, unappealing websites and bland straplines and statements about what their business does.

They do this because it is easy. Business owners know their products and services better than anyone else. As a result, they promote themselves in terms that they understand but their customers don't. They also do it because they look at what their competitors are doing and fall into the trap of doing the same things, instead of differentiating themselves and creating a unique selling proposition (USP) that gives them a real competitive edge.

Choosing the right marketing strategy

Competitive advantage can be achieved by choosing a marketing strategy that will provide the edge that sets your business apart from everyone else. There is no magic formula for doing this. You cannot just import or implant an off-the-shelf strategy into a business. It is down to you to choose and define your marketing strategy in your own business situation.

There are a number of key principles you can follow to help you choose the right strategy:

Knowing exactly who your customers or target prospects are and where they are located.
Understanding exactly what your target customers want and need, why they need it, how they need it and when they need it.
Being confident enough to develop or create a USP that you can offer to fulfil your customers' needs completely.
Refining your strategy based on what you learn while testing your proposition in your chosen market.
Implementing your USP and ensuring that it is articulated in all of your marketing messages, campaigns and sales channels.
Recognizing when your proposition is working and marketing it fast, first and aggressively in your sector to achieve an unassailable lead over your competitors.

Deciding on your strategic goals

Every business will have different strategic objectives for its own specific situation. No matter how high you set your sights, your marketing strategy will drive everything that your business does to achieve that objective.

Whether you are aiming to double turnover in 12 months, maximize the value of your business in 3 years in order to sell it, or to double your market share in 6 months, you will improve your chances of achieving these goals by implementing a well thought-out marketing strategy.

With your business' marketing efforts accurately aimed and completely focused on the needs of the target market, you are far more likely to succeed.

Getting your market strategy right

In the early 2000s, everyone spoke about the importance of being market-led. But today market conditions change much faster due to technology, fashions and media influences, as well as customers' tastes. The 21st-century marketeer who wants to succeed will do so only by making the right choice of target market, and then focusing everything the business does on providing unique value and benefits to meet the needs of that chosen market better than the competition.

How long should you retain your strategy?

Your business and your marketing strategy cannot stand still. What is unique today is widespread tomorrow and unwanted the day after that. So the vital ingredient in a truly dynamic marketing strategy is to strive continually to discover new and better ways to add value to your customers, and keep your proposition unique in your chosen market.

Every single time you put your strategy into action you will learn something new about your customers' needs and whether your proposition is right for them. The implementation of your marketing strategy should be a continuous process of creating a proposition to satisfy your customers. This involves testing it and learning from it by recognizing what is right and doing more of it, or changing what is wrong as soon as you realize it isn't working.

Marketing Strategy

It is important to determine how the business is going to achieve its objectives e.g. by improving the product, increasing promotion, implementing a new pricing strategy.

This should be clear and realistic, reflecting the practical implications behind the business' marketing objectives.

Marketing Budget - This should contain detail of resources that will be delegated to the marketing activity. Areas of major cost should be detailed.
Marketing Action Plan - An action plan should be compiled for each strategy, e.g. the selection of media for a promotional campaign, delegation of resources for product development and market research.

If clear objectives and activities are set, results can be easily monitored.

Creating your marketing strategy

Any business that wants to succeed and develop MUST have a strategy that can give a perspective of where the business will be at any given point in time. In other words a strategy is aimed at driving the business forward. But what does a strategy involve?

The strategy should involve the people who work in the business, because without them there is no business.
Many managers fall down because they are not capable of understanding how best to use the people within the business. The staff should be the first to be consulted because they know what is going on in their section of the business and how it can be improved so that even those at the ‘bottom of the ladder’ e.g. cleaner, know what the business is about, where it is going and how she can have an input. After all, the cleaner usually hears what is going on in the various departments.
Think through the consequences of your marketing strategy to make sure it's realistic. For example, there is no point in a strategy based on rapid growth if you won't be able to produce enough goods. The best strategy will reflect your own strengths and weaknesses.

Key elements of a successful marketing strategy could see you start by looking for new customers similar to the ones you already have.

When reviewing your existing customers you need to consider:

How will you target the right people?
How can you promote your products? Options might include advertising, direct marketing, exhibiting at trade fairs, PR or marketing on the web.
What is the best way of distributing and selling your products?
For example, you might aim to sell directly to a few key business customers, or to sell to the general public through retailers.

Could you improve customer service?

Better customer service can be a low-cost way of keeping customers, boosting sales and building a good reputation.

How will you tell if your marketing is effective?

A small-scale trial can be a good way of testing a marketing strategy without committing yourself to excessive costs.

And don't forget that your marketing strategy document needs to be constantly reviewed and updated or replaced when necessary - Just like your own products or services.

Your strategy must take account of how your business' strengths and weaknesses will affect your marketing. Understanding your own strengths and weaknesses are a key elements of a successful marketing strategy.

Begin your marketing strategy document with an honest and rigorous SWOT analysis –

Strengths, Weaknesses, Opportunities, Threats.

First make a list of specialist skills in what you do.

Strengths – e.g. personal and flexible customer service
Weaknesses - e.g. inefficient accounting systems imited financial resources lack of an established reputation.
Opportunities - e.g. increased demand from a successful customer using the Internet to reach new markets new technologies that allow you to improve product quality.
Threats - e.g. the emergence of a new competitor, more sophisticated, attractive or cheaper versions of your product or service, new legislation increasing your costs or a downturn in the economy - reducing overall demand

An example could be:

If new regulations will increase the cost of competing in a market where you're already weak, you might want to look for other opportunities. On the other hand, if you have a good reputation and your key competitor is struggling, the regulations might present the opportunity to push aggressively for new customers.

Price your product or service to reflect the market place.

As businesses pass from small to medium sized, there is quite often a tendency for some of the strengths and weaknesses to diminish. Whatever size your business is you must still be honest with yourself and whether any of the weaknesses still apply to your business?

It would help if you made a list your own business' strengths and weaknesses, getting input from all staff including management as many of your employees as possible. Compare your strengths and weaknesses with those of your main competitors. Check whether you need to take corrective action to minimise weaknesses and identify where you can exploit strengths that your competitors don't have.

There is a tendency for the marketing activity of smaller businesses to be short term, ad-hoc, and reactive leading to a fire-fighting culture. This can cost time and more importantly money, because resources are not optimally deployed as a result of not considering the fuller, longer-term picture.

However, a balance is needed.

The ability of the smaller business to be flexible and respond rapidly to market changes is a major strength in the right direction. This is particularly the case in fast moving markets and when in competition with larger businesses who are far less likely to be able to respond as quickly. In order to avoid short-term knee-jerk reactions whilst maintaining flexibility, you need an overall strategy for your activities to fit into. If you check whether your response to market situations is consistent with your overall strategy you can decide whether a particular course of action is appropriate.

Before you can develop a strategy, you need to identify your objectives.

An example could be what you want to achieve in a particular market.

Once you have your objectives and a strategy, you are well on the way to having a marketing plan. You may well have this in your head, but it's much better to write it down so that you have something to keep you on track and to show to others in your business.

Adopting a focused strategy allows you to avoid the shotgun effect.
Avoid trying to aim too widely with your marketing because your resources will be spread far too thinly to be effective.
The word focus should be the key word for small businesses.

Segment your market

Not all of your customers within your market have the same needs. Think of an orange as your market and within that each orange segment represents individual customer groups with distinct and different needs.

Carry out a survey to identify your customer’s needs.
Group your customers according to their needs. These groups are your main market segments.
Don't treat all of your market segments the same. You need to customise your product / service offering and your communication to be appropriate to each segments needs. The results will be worth the effort because there is substantial evidence to show that businesses that take account of their market segments in this way are more likely to be successful.
Focus on a manageable number of segments to avoid overstretching your resources.
You can use a 'rolling' promotional cycle, where, for example, you concentrate your promotional activity on a different segment every three or six months. Choose a time period for the 'cycle' appropriate to your business. In this way you can still cover several market segments but you will achieve a greater return on effort by focusing on one segment at a time.
Focus your marketing attention on those customer segments where your main strengths have the best fit.

Focus on a niche

Focusing on a market niche is a particularly appropriate competitive marketing strategy for small businesses.

If you face heavy competition in a mass market, particularly from larger businesses, it takes a lot of resources to compete, and for smaller businesses, your size can also make you less credible.
Take a look at your market and identify whether there are any market segments that are not being adequately served. Look at ways in which you can make an offering to fit their particular needs.
Of course it has to make good business sense before go along this path, and it is not without risks in itself. There is no guarantee that larger business won't see what you are doing and achieving and start to concentrate their own assets on your niche, especially if it looks profitable.
You always need to monitor the market and be prepared to move to another strategy if necessary.

Focus on a particular segment:

If you are a smaller business, you may find it beneficial to consider focusing even further within a niche or market segment to become a specialist. Small businesses have greater credibility as specialists and there is the advantage that you will develop a very deep knowledge and expertise within your market as you pursue this route.
The disadvantage to this strategy is the risk associated with total reliance on a small market sub-segment. You will need to monitor the market regularly so that you can be ready to target an alternative market if necessary.

Adopting lower risk strategies:

When you are operating with limited resources, it makes sense to look at lower risk strategies first.

Avoid moving into new markets too rapidly:
Far too many small businesses get carried away with the excitement of new horizons and forget to fully exploit their existing markets before moving on.
You may have a very good reason for looking at new markets if your existing market has dried up or has undergone a down-turn, but remember that the further you move away from your existing market, the risk and cost of marketing increases.
This is because you know far more about your existing market and have far more information upon which to base your decisions.
Your production, systems and procedures are also geared up to your existing market. This is illustrated by these simple growth strategies that increase in risk as you go down the list:
Selling more of your existing products to existing markets
Selling modifications of your existing products/services to existing markets
Selling new products to existing markets (totally new products or associated with existing products)
Selling your existing products/services to new markets
Moving into completely different markets with different products

Check your need to increase your customer base:

In many cases micro and some small businesses are operating with a customer base that is far too small. This imposes undue risk, because the sales from one customer can account for a substantial proportion of total revenue. Consequently, the loss of a customer could have a major impact on your business, and in some cases result in its demise.
Ask yourself whether you are in a high-risk situation. This can be done by taking a common sense view by calculating the percentage of your total revenue accounted for by each customer, and for each, ask yourself what the impact on your business would be if you lost that customer and whether you would survive.

If the answer is no to any of them, then you need to take steps to increase your customer base.

Make an estimate of how many customers you need in order to reduce to an acceptable level the percentage of your total revenue accounted for by each customer.
Set this number of customers as your target. Then identify how you are going to obtain these extra customers and over what time period.
Draw up a mini plan for this as you are unlikely to be able to develop new customers overnight, and so the sooner you start planning to do this the better, but remember not to neglect your existing customers while you do this.

Stimulate referrals:

Recommendations and referrals from existing customers form a substantial source of new customers for many small businesses. This has the advantage of being cost-free, but the downside is that over-reliance on a passive phenomenon that is uncontrollable is risky.
You can reduce this risk and take control by actively stimulating referrals.
As not all of your customers will know everything about your products or services. This can be done by:
Regularly providing them with information sheets summarising your offerings. This is a good thing to do anyway, because it is likely to generate more sales from the customers themselves.
Ask them if they can identify anyone who could use your products/services and encourage them to pass on the information to others.
Make a judgement as to whether you need to provide an incentive for them to do this but in some cases it will not be appropriate.
Personally thank your customers for their custom, and make a point of asking them to pass on your name to others. At the same time find out how satisfied they are with your offering and take corrective action where necessary. Dissatisfied customers will not make recommendations.
The adage seen across many countries "If you like what we do tell others but if you don' t like it then tell us" is very appropriate in successful business circles.
Take the opportunity to enclose a referral slip with any communications or delivery documents.

Retaining and developing existing customers:

Once you have achieved a reasonable number of customers, beware of focusing only on developing new customers as a means of growing sales. This runs the risk of neglecting your existing customers. Clearly you need to look for opportunities to develop new customers, but a balanced approach is needed.
Retaining and developing more sales from existing customers should be the first priority, because this strategy has distinct advantages:
It is the least risky growth strategy.
Developing more sales from existing customers is less costly than obtaining new customers.

Existing customers:

When considering existing customers always remember that they are the bedrock foundations of your business and are:

Generally less price sensitive.
Likely to offer more opportunity for repeat business.
Offer the potential for recommendations and referrals.
Are generally more loyal.
In order to develop a strategy for retaining customers and developing more sales from them you need to carry out some analyses:

Analyse your customer base:

The 80:20-customer ratio:

It is likely that 80% of your revenue is accounted for by only 20% of your customers.
The 80% of your customers with small sales probably fall into two categories.

Either they will never have the potential for increased sales, or, given some work, they could be developed. Identify which are which and take steps to sell more to those with sales potential.

Customer profitability:

Analyse the profitability of each of your main customers who are probably in the top 20%. You may be surprised to find how unprofitable some of them are so look at ways of increasing the profitability of these or consider 'losing' them.
Focus on the more profitable ones; check their needs and identify ways to sell more to each of them.
Make your database work for you:
Many small businesses operate with inadequate inefficient customer databases because it is not considered to be a priority to invest in them but if you don't have the means of storing and manipulating data on your customers you can't hope to fully exploit this gold mine of an asset.
Many of the strategies discussed require the ability to analyse your customer/contacts database in order to obtain the information required.

Questions you should now be asking yourself are:

Is your database just a list of customers and contacts?
Can your database be manipulated with ease to group customers according to: Sales – Profitability – Needs - Main product/services purchased – Location - Frequency of purchase - Average size of purchase, etc.
Is your database fully integrated with your other software programmes e.g. financial?
Was your database design based on an audit of your business needs?
Does your database allow you to keep additional information on your customers other than contact details etc?

If the answer to the above questions is yes to the first question and no to questions two to five then you need to take an urgent look at upgrading your database, but take expert advice on this.

Satisfaction through innovation:

In order to retain and develop existing customers you will clearly need to ensure their total satisfaction. This process can stimulate innovation because you may need to modify existing products and services or develop new ones in order to continue to satisfy their needs.
Find out from your customers what their needs are now and in the future in order to achieve this. This will indicate if you will you need to modify products/services or develop new ones to fulfil these needs?

Retaining employees:

There is a distinct cost advantage to retaining employees because it costs a lot to recruit and train a new employee, and in the early days they are less productive. As with customers, you need to make sure that your employees are satisfied in order to retain them. You are also unlikely to have satisfied customers if your employees aren't satisfied.

These are two good reasons for making sure that you keep your employees but how good are you at this?

Consider if you have:

An employee satisfaction programme?
Knowledge what your employees' needs are in order to ensure that they are satisfied?
Taken steps to find out what motivates each of them?
A selection process and training programme adequate for each employee role?

Now look at your Marketing Strategy and identify how it actually applies to your business or business idea.

Choose the right market for your product. The most important aspect of any marketing strategy is ensuring you have chosen the right market at which to aim your products and services. No matter how convincing your sales messages and advertising copy, or how good you are at selling and articulating the benefits of your service, you will almost certainly fail if you haven't selected the right target audience in the first place, or haven't understood what that audience needs. By selecting the market with the right profile of consumers who have a propensity to buy your products or service, you will be able to aim your proposition and the benefits it brings directly at them.
Keep up to date with changes in customer preferences and buying patterns, and the seemingly relentless changes in technology and other external forces. If you do not make the effort to move forward constantly, your competitors will steal your market share, your biggest customers, or your intended new market before you have a chance to do anything about it.
Keep your eye on the marketing ball. The market focus of your business ensures you are continuing to provide the unique value and benefit your customers need and expect from your service.

Choose your marketing strategy for your business...

Good luck with your marketing strategy..

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