The business landscape is fierce and if you aren’t clear on the direction of your business, who your customers are and how you’re going to reach them then you might as well get ready to fade into the background while your competitors reap the rewards.
Every business needs to know what sets them apart and how they’re going to let their customers know just how great they are so including a marketing strategy in your business plan is the best starting point for achieving success.
Before You Write Your Marketing Plan…
It’s a bit difficult to simply start creating your marketing strategy if you aren’t too sure about your offering, your market and your key differentiators, which is why market research is such an important step.
When you are done with your market research you should be able to answer the following questions:
- Who are your potential clients?
- Where do they reside?
- What kind of people are your potential clients?
- Will they be interested in and willing to buy the product or service you’re offering?
- Are your prices attractive to your clients?
- Are your products and/or services available at the right time and place?
Divide your research up into primary and secondary categories in order to explore all of your available options. Start with secondary market research, this involves looking at information that has already been published and can be used to get an idea of your industry, market trends, competitors and potential customers. Below are a few ideas on where to obtain secondary data:
- The internet
- Industry magazines and trade journals
- Newspapers and magazines
- White papers
- Pooled data collected from interest groups
Turn to primary data sources if the secondary data didn’t quite give you all the information that you needed to develop your marketing strategy and plan. Primary data is collected from scratch and if you can’t afford to pay someone to do it then it’s simple enough to gather it on your own. You can collect primary data using the following methods:
- Interviews (Web, telephonic or personal interviews)
- Questionnaires and surveys
Developing Your Marketing Strategy
Now that you have a better idea of the market you are targeting you can start writing your marketing plan. Marketing strategies are there to map out an action plan for your business. This plan is not only useful for keeping track of progress and strategic direction but it’s a part of your business plan that investors will be interested in too.
Aim to include the following elements in your marketing plan to reap the best benefits:
If your marketing plan is going to form a part of your business plan then there is no need to create a second executive summary as it will be a repeat of information. If your marketing strategy is going to be a separate business tool then you can briefly describe your business and what sets you apart as well as touch on your vision and mission statement.
Start this section of your plan by explaining the current status of your business. Provide a few details on what you do, how you do it and how long you have been operating to date. Next you can provide answers to the following questions:
1. Who is your market?
This should be quite in-depth so it’s not uncommon to write up to two pages on your target market. Describe who your customers are, their demographics, needs and habits. Look at trends and growth in the market place to give investors an idea of where your business fits in and how you can cater to the needs of these clients.
2. What are your strengths, weaknesses, opportunities and threats
Take a page to explain what your strengths and weaknesses are as well as where opportunities and threats lay in your specific industry. You can download a SWOT analysis template here.
3. Who is your competition
Define who you are going up against by entering into your industry. What are your competitors offering your potential customers and what are they doing differently to you? Will they be a threat in the long run or won’t this be an issue for your company? Click here to view a competitor analysis example.
4. What are your key differentiators?
How do you stand out from your competitors and what will you be doing to ensure that you continue to be a top name in your industry? Are there any issues that you need to address in order to be successful in the short and long term?
When you develop your strategy, keep in mind that the main goal is to establish how you aim to increase brand awareness, create a relationship with customers and ultimately grow your business.
In order for a strategy to be effective it needs to be realistic, so this means taking your resources, time and budget into account. It also needs to be continuously implemented, tested and changed if required. Your strategy needs to contain the following information:
1. Marketing goals
List your objectives and what you want to achieve in the next month, year or 5 years. Your objectives can include anything from providing your customers with top-notch service to the increased profitability that you would like to achieve in the next 6 months.
What is your current position in the market and what do you need to do improve it? You might be competing against two top brands and you want your business to be one of those brands. How will you do it?
3. Marketing Mix
Now that you know what needs to be done you can explain in detail how you will achieve the goals that you set out above. This information is one of the most important parts of your marketing strategy and it’s important to note that your mix might change every now and then depending on trends and growth in your market. You need to list the following points in this section:
- Product strategy – What will your exact offering be
- Pricing strategy – How much will you be charging clients for your product or service and why?
- Distribution strategy – How will you make your product or service available to your clients?
- Promotional strategy – What will your marketing efforts be in order to create brand awareness and generate interest around your product or service?
The best guideline for deciding how much to spend on your marketing is anything from 1%-10% of your annual sales. This is mainly dependant on the industry you are in as well as how established your business is. The catch is that sales are dependent on marketing and vice versa so it’s important to put enough time and effort into this area of your business.
Go into some detail on the amount of money you will be assigning to marketing, how often you will be engaging in marketing activities and how you will monitor the effects. Some of the financials that investors might want to see and that will be useful as a monitoring tool are:
- Your break-even analysis
- Sales forecasts
- Expense forecasts.
There are many ways that you can also cut down on marketing costs and still get the most bang for your buck. Here are some ideas:
- Aim to attend industry events where you can network with potential customers and partners
- Make use of free online social media platforms such as Twitter, LinkedIn, Pinterest and Facebook
- Decide whether it’s necessary to hire outside creative help for the project that you have in mind. A headshot for your newsletter and a photo for a magazine advert have two different requirements. Try and do as much as possible yourself, within reason of course
- Your business cards can be an affordable and memorable marketing tool so don’t overlook this
- If you want an online presence there are tons of free platforms that you can use to design a basic website
Implementation and Control
This is the part where you give yourself timelines and deadlines. Define what needs to be done and by when so that you can monitor progress and make any necessary changes. Some of the areas that you can monitor are customer satisfaction, repeat business and the cost of acquiring new business.
Marketing Plan Resources
If you feel that you want more information on developing marketing strategies and devising a plan here are some useful links:
- Download a free marketing template
- (Video) Tips for building a great marketing plan
- Topsy – Search and analyse the social web
- Survey Monkey – Create online surveys and polls
- Access sector stats and trends on the DTI website
- Access South African white papers and reports from the SA Government website
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.