Entrepreneurs go into business for many reasons. You want to change the world, solve a burning need, help a community, or simply realise a dream. Whatever your personal motivations are, business is your chosen tool. Vision alone cannot sustain a business though – profits do.
And the way to earn profits is to sell your products and services for more than it costs to produce them. That’s finance 101, so where does marketing come into play?
Marketing has two primary aims: It ensures you are offering your consumers something they really want, and it gets your message out there so that customers know what you’re offering, who you are, and where to find you.
It’s not rocket science, and it doesn’t need to cost you an arm and a leg to achieve. In fact, a great marketing strategy isn’t only cost-effective, but simple to follow as well.
Here are three steps to creating a killer marketing strategy.
1. Create a product or service customers will clamour for
Are you offering your customers something that they really want?
Marketing research can tell companies whether they are meeting their customers’ needs and expectations. With research, SME owners can learn whether they need to change their packaging, tweak delivery methods, or even offer additional services.
A good market research plan indicates where and who your customers are. It will also tell you when they are most likely to purchase your goods or services.
Use the results of research to create a business and marketing plan or measure the success of your current plan. That’s why it’s important to ask the right questions to the right people. Poor research can steer a business in the wrong direction. Here are some research basics to get you started, and some mistakes to avoid.
Types of market research
The goal is to gather data from analysis of current sales and the effectiveness of current practices. Primary research also takes competitors’ plans into account.
Collecting primary research can include:
- Interviews (either by telephone or face-to-face)
- Surveys (online or by mail)
- Questionnaires (online or by mail)
- Focus groups gathering a sampling of potential clients or customers and getting their direct feedback.
- Why would you purchase this product or service?
- What do you like or dislike about current products or services on the market?
- What areas would you suggest for improvement?
- What is the appropriate price for the product or service?
The goal is to analyse data that has already been published. With secondary data, you can identify competitors, establish benchmarks and identify target segments. Your segments are the people of a predetermined age group who fall into your targeted demographic – people who live a certain lifestyle and exhibit particular behavioural patterns.
No SME can remain competitive without understanding its customers, its products and services, and its market. There are two categories of data collection: Quantitative and qualitative. Quantitative methods employ mathematical analysis and require a large sample size.
The results shed light on statistically significant differences. Find quantitative results in your web analytics (available in Google’s suite of tools). This can help you determine where your leads are coming from, how long visitors are staying on your site and from which page they are exiting.
Qualitative methods help you develop your quantitative methods. They can help define problems and reveal customers’ opinions, values and beliefs.
2. Bring your brand to life
Simple steps to effective marketing.
Marketing isn’t sales. You aren’t pitching your product. What you are doing is letting your customers know what you do in such a way that they not only respond to your brand, but want your brand to be a part of their life. This starts with step one – you need to produce something that they really do need in their lives. Once that’s done though, they need to know you exist. Enter our four simple steps to effective marketing. (See checklist)
Marketing is all about deconstructing your business and vision for everyone else. It’s not about dumbing things down (your customers don’t ever want to feel like they’re being talked down to). What it is about is taking the complex and making it easily understood, while tapping into the core values of your customers. What do they really care about? How does your business fill that need?
An often-used example is Harley-Davidson, which doesn’t focus on the complicated technical aspects of its products. Sure, many of its consumers are petrol heads, but many more want to feel the freedom of the open road, while showing they are able to afford that freedom in style. Harley-Davidson markets a lifestyle – not a machine.
Keeping it simple
Products and services (especially digital ones) can be complex. Your job as a marketer is, in part, to make the seemingly impenetrable easily understood, to lose the corporate ‘Frankenspeak’ and convey your business’s value in human, accessible terms.
Businesses that develop buyer personas for their products or services exemplify the ‘keep it simple’ mantra. A buyer persona is a representation of the type of consumer you believe will be interested in what your company is selling.
The idea is to address customers’ wants and needs directly – speaking to their specific pain points from their specific points of view.
More broadly, it can be handy to envision intended prospects as people who demand clarity and simplicity. This will help you to market effectively.
Let’s take Steve as a great local example. While we can all agree that FNB’s Steve ads that flooded the airwaves throughout 2012 were more than a little annoying, the campaign was also very effective. Steve’s prospects touched on our pain points, we have a clear understanding of FNB’s offering, and we associate with the bank as one that speaks our language – not banking lingo.
3. Keep the momentum going
Instead of jumping from trend to trend follow these six steps for marketing that really works.
Feeling bombarded by all the theories on the so-called newest, latest and hottest trends in marketing? You’re not alone. Jumping from trend to trend in pursuit of the latest idea is the last thing a smart entrepreneur should do in this economic climate – particularly when we’re not out of the woods yet.
Now’s the time to keep a level head and chart a course that’s guided by what really works. Take a look at this list of six tried-and-true steps you can take for a successful marketing programme in today’s marketplace.
1. Put finding prospects first
How do your best prospects find what they’re shopping for? Chances are they begin by using a search tool. Having a strong presence in the online search engines or directories is a must, and you can also purchase links in the resource sections of third-party websites your prospects frequent.
Traditional search tools, including the printed Yellow Pages, industrial directories and newspapers have moved online as well and offer increasingly affordable solutions. Magazines with ‘shopper’ sections also represent smart search corridor options for advertisers.
2. Don’t drop out of sight
It’s always a huge mistake to stop communicating with customers: Out of sight = out of mind. So while the recession may have shrunk your marketing budget, it’s essential to find a good mix of tactics you can sustain over the long haul to reach out to clients with sufficient frequency.
Develop a database of prospects and customers, then retain and up-sell them through ongoing communication via email and direct mail. And coordinate this effort with acquisition tactics to bring in new prospects.
3. Separate from the pack
Economic hard times have changed the way people shop. Today’s big motivators include low prices and savings. Free shipping continues to be a strong incentive for example. Green practices or aligning with a charitable cause can also help positively differentiate your business from its competition.
After all, you can’t always differentiate based on what you sell; but how you sell, who you are and what you do can make all the difference to prospects.
4. Invest in relationships
In uncertain times, consumers want to buy from companies they trust and believe in. That makes one-to-one customer relationships essential. Wherever possible, increase in-person selling, networking in business and professional groups, and online social networking.
Use experiential marketing, such as events that bring you into direct contact with customers in small groups, to foster positive client relationships with your company, products or brand. Create several great letters that can be customised to follow up each interpersonal contact – and send handwritten thank you notes.
5. Get people talking
Recommendations and positive word-of-mouth are extremely important today. Cautious shoppers want to know they’re making safe and smart decisions. A public relations campaign that includes savvy article placements or product reviews can give your sales a lift.
For example, a well-placed article that runs on a respected website can quickly be spread friend-to-friend across the web. Another strategy for building word-of-mouth is to create an advisory group of influential clients who are the first to receive your new products, info and special offers. If they like what they see, they’ll pass the word along.
6. Expand your website
Customers are shopping on more websites and viewing more pages in less time than ever before, so your site has to immediately grab and hold them with information they want. Highlight special pricing, offers and incentives at the top of your homepage.
Include background information about your company, its principals, media coverage and charitable giving. And create a space for customers to share their experiences through a message board, or post their stories and testimonials somewhere visible for a website that works hard to help you close sales.
Useful Marketing Tactics For Growing Businesses
Customer acquisition, customer experience and content marketing can be identified as the three most important marketing strategy areas to focus on.
Digital marketing offers the business world so many advantages, including the ability to communicate with their target markets quickly and easily. Unfortunately, digital marketing has also opened doors for companies to flood mail boxes, news feeds and ad spaces with junk mail and spam resulting in customers tuning out to anything irrelevant and suspicious.
Customers have become less likely to trust companies and less receptive to messages. The only way for valuable messaging to stand out from the noise is if a business knows how to market itself properly.
Over and above advertising, there are a lot of other aspects that contribute towards an effective marketing strategy, these include research, email, content creation, list curation, social media and even customer service. To be a successful marketer it isn’t necessary to become an expert in every single marketing tactic, but it is important to master the most important areas. Customer acquisition, customer experience and content marketing can be identified as the three most important marketing strategy areas to focus on.
1. Customer acquisition
Of course, not all customers are the same. Some customers are only interested in buying products on sale from a particular brand and then never interact with that brand again. Acquiring, and of course retaining customers with a high lifetime value should be the overall objective for businesses, but this requires more time and money being invested in better, more qualified leads. While the upfront costs might be higher, in the long-term this investment will pay off with continued business from these lifetime customers.
2. Customer experience
Competitive pricing can’t be the only aspect that businesses focus on in order to stand out against competitors. In the current digital era customers expect a good customer experience when they deal with brands so this should be an important focus area for all businesses. Customers expect fast and seamless experiences such as intuitive user interfaces and processes, fast websites and service response times, as well as accurate information about the problems they face.
Customers don’t want to waste their time on websites that require them to jump through hoops, and they definitely don’t want to feel misled by anything a business is communicating. Customers will quickly move on to other sites that offer better experiences as well as other businesses that are more trustworthy. Good customer experiences can go a long way.
Offering more personalised, interactive engagement tactics and improving the customer technology interface should be high priorities for businesses.
3. Content marketing
Marketing is no longer about telling customers that your brand is the best. With the movement towards content marketing, marketing has become about showing customers why you are the best. Content marketing is a legitimate, effective strategy that every business and brand should make use of. While content marketing is a lot more cost effective than outbound marketing, it also generates three times as many leads and offers many other benefits.
Content is a key feature for growing businesses who want to survive in an information rich environment. Customers are looking for brands that provide value beyond their products so creating high-quality content can help you grab your audience’s attention.
Although there are many other factors that are involved in an effective marketing strategy, seeking out customers with a high lifetime value, providing them with a great customer experience while also providing them with valuable content is a recipe for success.
An ‘Outside-the-Box’ Approach to the e-Commerce Unboxing Experience
Get started by keeping three elements in mind – recyclable/re-usable packaging, personalised thank-you notes and free samples.
With a predicted 24,79 million e-commerce users in South Africa by 2021, online shopping is here to stay, making it impossible to escape the predicament of perfecting the art of product packaging. It’s time to think outside the box when it comes to creating a meaningful unboxing experience. Get started by keeping three elements in mind – recyclable/re-usable packaging, personalised thank-you notes and free samples.
Certain types of product packaging are having a tremendous negative impact on our environment, with 5.35 trillion pieces of plastic debris littering the world’s oceans, and with 269,000 tonnes of this amount floating on the surface – and plastic isn’t the only culprit. Did you know that it’s impossible for Styrofoam to ever be broken down completely? And that 1 million single-use coffee cups wind up in landfill every single minute of every day? These statistics make it obvious as to why it’s becoming so important for business owners to be more conscious about the type of packaging that they use.
Many business owners wonder if their customers really care whether their business is doing its part to protect the environment. According to Forbes and a 2017 Cone Communications CSR Study, the answer is a resounding ‘YES, they most certainly do!’.
87% of the consumers surveyed stated that they always have a more positive image of a company that supports social or environmental issues, and 88% claimed that they usually feel more loyal toward a company that they know supports social or environmental issues.
Thoughtful Thank-You Notes
The unboxing experience should be a unique and personal one, and it should be just as memorable as the experience of utilising the product itself! So, make it all the more special and build customer loyalty by including a personalised thank you note. Address the customer by their first name, thank them sincerely for their patronage and end off by giving them some helpful advice regarding the product, or share an interesting benefit of using it. Go the extra, extra mile by hand-writing the letter too.
Everyone loves getting free stuff. Why not bolster the unboxing experience by sending over a little bit more than expected? Not only will a free sample put a big smile on the face of the receiver, if they actually enjoy using it, there’s also a good chance that they’ll be coming back to order more. According to Shopify, free samples have the potential to boost sales by as much as 2,000%.
When it comes to packaging, make the right choice. Sustainable, thoughtful, memorable. Your customers, and the environment, will thank you for it.
The Facebook Ads Strategy That Can’t Lose
It’s a numbers game.
Running a profitable Facebook Ads campaign is simple. Not always easy, but simple.
There is a formula that can guarantee a profitable Facebook Ad campaign. Once you know the formula and the values to plug in, you’ll never sink money into a losing digital ad campaign again. I know it sounds too good to be true, but stick with me…
The Guaranteed Growth Formula
Here’s the entire formula: CPA < AP
Were you expecting coefficients, remainders and dividing by polynomials? Nope, there are only two values that matter when assessing your digital marketing funnel.
1. CPA – Cost Per Acquisition
2. AP – Average Profit Per Client
If your Cost Per Acquisition, the amount you pay to generate a paying customer using Facebook Ads, is less than the Average Profit you make from each new customer you’re guaranteed a profitable campaign.
Calculating Average Profit
To get average profit per client, sum your total revenue from new clients and subtract what you spent to serve them. Divide the result by the total new clients. For example, if you made $75,000 from 10 new clients over the past year and it cost you $40,000 to serve them, your average profit is:
($75,000 – $40,000) / 10 = $3500 Average Profit Per Client
If your average acquisition cost for similar future clients is less than $3500, your campaign will technically be profitable.
Of course most businesses won’t want to spend all of their profit on acquisition. An average business can expect to invest at least 7 percent but no more than 15 percent of revenue in sales and marketing. If Cost of Goods accounts for 60 percent or more of total revenue, your low profit margin may make it difficult to afford successful advertising. Decrease operating costs by increasing efficiency or adjust your margin by raising prices.
Don’t make the mistake of calculating Average Profit based on revenue only from the first sale. Use at least six months of revenue or your lifetime client value as the basis for your calculation, or you risk underfunding your marketing and sales budget.
Calculating Cost Per Acquisition
Let’s assume you’ve considered all of your marketing and sales costs and determined you can spend $350 per new client on Facebook Ads. Let’s reverse engineer your ad campaign to see if a $350 cost of acquisition is reasonable.
The simplest Facebook ads funnel includes four metrics that build upon each other to determine your acquisition cost. I’ve included standard benchmarks for use as a starting point, but your results may differ:
1. Click-Through Rate (CTR) – Percentage of people clicking on your ad. Your CTR should be near or above 1 percent.
2. Cost Per Click (CPC) – The cost of one website visit. CPC should generally be below $3.
3. Lead Conversion Rate – The percentage of site traffic that becomes qualified leads. This value should be 20 percent or above.
4. Sales Conversion Rate – The percentage of leads that convert to a sale. Aim for sales conversion at or above 5 percent. (E-commerce companies often skip the Lead Conversion stage and have a Sales Conversion Rate of 1 percent or greater.)
If 10,000 people view your ad at a 1 percent CTR, you’ll get about 100 website visits. At a $3 CPC, you’ve spent $300. Since 20 percent of your traffic will become leads and 5 percent of those leads become closed sales, we can calculate that you’ll generate approximately 60 leads and three new customers.
Your estimated acquisition cost using Facebook Ads is $100 per client, which is well within your budget of $350. This cost may rise as you scale and target less optimal prospects, but as long as your acquisition cost is less than $350 you’ll make an acceptable profit.
Complex funnels can include several ads and conversion points, but the Guaranteed Growth Formula of CPA < AP still applies. There’s no immediate reason for concern if your metrics differ from the benchmarks. You can and should split test ideas for improvement if your numbers are far from what you expect, but don’t mess up a good thing until you’ve got a better one.
Optimising Your Guaranteed Growth Funnel
If unhealthy metrics cause your acquisition to cost more than what you’ve budgeted, start with these adjustments:
Click-Through Rate Too Low or Cost Per Click Too High
If your CTR falls far under 1 percent Facebook may stop showing your ads or show them to second-rate audiences causing your traffic to tank and CPC to increase. To improve your click metrics, adjust your ad copy (headline and body text), ad creative (image or video) and highlight the benefits in your offer.
Refine your audience. Tailor your copy, images and call-to-action to the audience you’ve selected and ensure that your audience has the desire and means to act.
Lead Conversion Too Low
If leads aren’t converting at 20 percent or more, either the promise made by your ad isn’t congruent with your landing page, or the process of moving forward is too difficult. Try using the same image and headline in your ad and reduce the form fields in sign-up forms to the bare minimum. Also try retargeting visitors who don’t sign up with ads stating the benefits of acting now, or with a different offer.
Sales Conversion Too Low
If you’re an Ecommerce brand with sales conversion below 1 percent your shopping cart or sales process may have too much friction. Simplify the sales process to decrease clutter, or increase trust by adding testimonials and trust signals near important calls to action.
Your sales process may need improvement, but that is beyond this article. In the meantime, you can still increase revenue by cross-selling and upselling those who convert. You may also improve client retention with recurring contracts. Yes, that’s why many software companies are switching to cloud-based subscription models.
When used properly, The Guaranteed Growth Formula of CPA < AP makes Facebook Ad marketing an investment, not an expense. Using the formula, the most you should ever risk is a small initial budget to test whether your estimated calculations hold true in practice.
If your net profit is 3X your acquisition cost, your funnel returns $3 for every $1 you invest. Instead of asking “How much should I spend on marketing?” The question becomes, “How much do I want to make?” I’ve built a Facebook Ad Growth Calculator that incorporates the Guaranteed Growth Formula to help execute your growth strategy. Input your revenue goal and it will estimate the Facebook Ad impressions and traffic required to reach it.
This article was originally posted here on Entrepreneur.com.