Every marketing activity you undertake should help you to achieve at least one of the results below:
* Retain your existing customers: If you lose customers, you lose sales. You are also then forced to spend heavily on promotion and sales to attract new customers. If you can lock in your customers through loyalty schemes, excellent service or contracts, you have also locked in your revenue stream.
* Get customers to make larger purchases: Replacing two $1,000 orders with a single order for $2,000 improves your profitability, provided your margins remain the same, as you halve the cost of selling and admin.
* Get customers to buy more products: New customers often require investment in the form of staff time, and money spent on advertising. It is generally easier, and therefore more profitable, to make an additional sale to an existing customer than to make a first sale to a new customer.
* Win new customers: By identifying and profiling your best customers, you can target new customers with similar needs.
Understand your market
Understanding your market and customers' needs allows you to offer better services, products or deals than your competitors and to develop a strategic marketing plan.
* Who uses products like yours? Divide your customers or potential customers into different categories to help you spot the best opportunities for marketing. For example, a pet products company might use three levels of product categories: pets generally, type of pet (such as a dog), and breed (such as a Labrador). The corresponding products are feeding dishes (for all pets), dog leads, and a video on Labrador raising and training.
* What do the users value most in products like yours? To get the most out of your marketing, you need to understand how your customers make their purchasing decisions. For example, are they basing their decisions on price, convenience or customer service? You also need to know how your products and services compare with what your competition is offering.
* How will customers purchase your product? The obvious methods include retail sales, direct sales, and sales through wholesalers, agents, distributors and the Internet. But can you find alternative ways of reaching customers? For example, one accounting software company built its success by directly contacting people in the accountancy profession to reach the small businesses that employ them.
* What size is the market? Is it expanding or declining? Consider whether a market is static or getting smaller, or whether it has the potential to grow substantially. Even if a market is growing, consider its present size when you make marketing decisions.
* What is the competition doing? Know your competitors and their products. Find out why people buy their products. Find out if the customer's preconceptions of your competitor's products and your products are accurate. If not, aim to change their attitude through your marketing.
* What other factors influence your business environment? Be aware of changes that will affect your business, such as government tariffs on imports or the impact of new technology. For example, the government may decide to decrease the tariff on imported goods in your trading category, which will impact on any businesses manufacturing similar products locally.
Complete a SWOT analysis
Meet with your staff or your advisers to complete a SWOT analysis. This reveals your strengths, weaknesses, and the opportunities and threats you face in the marketplace. It is a good way of summarising your position with different types of customers in relation to your competitors.
* Identify the critical success factors for you and your competitors. Give each success factor a weighting out of ten, according to its importance. Critical success factors might include product performance, product range, speed of order fulfilment, customer service, and price. Score your business for each factor, then total the scores and repeat the process for each competitor. Listing the results in a table gives you a clear picture of your relative strengths and weaknesses.
* Identify opportunities and threats. Brainstorm with staff to identify organisations and individuals that directly affect your business, and events in the broader business and economic environment that could influence your business positively or negatively.
Rank your products and services
Determine which products or services will make your business the most money and therefore deserve greater marketing attention. Make sure you separate your various activities in your accounting, because it will reveal inefficiencies, such as one activity or product subsidising other loss-making ones.
Almost all products and services have a life cycle and this means that most products need to be constantly updated to maintain their market position. Re-packaging, re-sizing or discovering new uses and new users are ways of renewing existing products. Extending the life cycle of an existing product is preferable to regularly developing and launching new ones, but it is important to have a product or service development programme.
Focus on customer service
Customer service can have a major impact on customer retention and sales, so try to exceed customer expectations. For example, give customers information about any product guarantees and how to best use a service or maintain a product.
Personal recommendation is often a key source of new customers so consider ways to increase this word-of-mouth advertising, such as by offering discounts to customers who recommend your business. Also consider options such as direct mail, public relations, and advertising.
Analyse and review
It's important to regularly measure the success of past marketing activities and review what edge you have over your competitors.
Develop an action plan
Once you understand your market, you are ready to develop a marketing action plan for your business a year in advance. Don't forget to factor in seasonal events that are particular to your line of business. Your action plan should take each element of your marketing strategy and allocate detailed budgets, responsibilities, targets and deadlines.
Use a calendar and keep in touch. Most businesses need to contact customers at least every 90 days to maintain top-of-mind awareness. This excludes the actual sales process and routine communication. An important way to improve your business is to keep asking your customers for feedback on your products and services.
Be visible. You might want more regular contact with your more important customers in the form of mail outs or emails, or perhaps even personal phone calls - but don't be too pushy. Sending them useful information that has nothing to do with a sales pitch can be a useful way of reminding them that you value their business.
Know the cycles and plan for the year ahead. Get to know the purchasing cycles of your customers so you can approach them when they are doing annual budgets, restocking or upgrading, or need consumables. Plan your promotions for the year, factoring in seasonality, who you will contact, how you will make contact and why.
Prepare a 12-month sales forecast showing what you expect to achieve. Update the forecast monthly from actual sales figures, to compare your predictions with reality.
Base your sales forecasts on your historical performance and marketing strategy, but make allowances for changing market conditions.
As you learn what drives your sales, it becomes easier to forecast sales. For example, the number of expressions of interest from potential customers may be crucial for one business, but the morale of staff and resulting quality of customer service may be crucial to another.
Measure marketing success
What you don't measure, you can't manage or improve. When you develop your marketing strategy, you need to consider how you will measure its effectiveness. This enables you to know what works and improve what doesn't. For example, how many people responded to an advertisement? How many of those enquiries converted into a sale?
Note which products or services are your best sellers. Also take particular note of what happens immediately after you have advertised or carried out a marketing campaign. Check whether you are achieving your objectives and reaching the targets you set.
Work out how much it is costing you to attract new customers. Look at how many new customers your business gained at the time of your marketing campaign. Then consider both the immediate profits you earn from these customers and the potential long-term profits (their lifetime value to your business).
Keep track of your customers
A good customer database is essential so you can monitor how many customers you have acquired, and how many you have lost. Maintain an after-sales dialogue with your customers and encourage their feedback. This will help you understand why customers stay, and why they leave.
Monitor the average value of a sale
Focus on chasing the most profitable business - typically large orders, high-profit sales, and repeat-order business. The average sale amount can often climb after staff have been given training in selling, such as up-selling the customer to a more profitable product or selling extras like a tie and shirt to go with a suit.
* Know your products and services inside out and what benefits they offer compared with your competitors' products.
* Keep in touch with your customers, both new and established ones, and find out why any customers decide to leave so you can make improvements.
* Profile your best customers so you can find more customers like them.
* Weigh up both the potential short- and long-term profits when you plan and cost any marketing campaign.
* Plan your marketing and advertising well in advance, taking seasons, trends, and other external factors into account, and implement monthly and yearly sales and profit forecasts based on past experience or solid market research.
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