Chapter 1
In This Chapter
Succeeding by understanding your customers — and yourself
Formulating a winning marketing strategy
Leveraging your marketing program with focus and control
Figuring out what to realistically expect from your program
Maximizing the appeal of your product, service, or business
Marketing is all the activities that contribute to building ongoing, profitable relationships with customers to grow your business. The traditional goal of marketing is to bring about healthy sales through advertising, brand development, and other activities. A more long-term goal is to become increasingly useful or valuable to a growing number of customers so as to ensure your future success. Watch both short-term sales and long-term development of value to make your organization a growing success.
Your marketing program is the right mix of products or services, pricing, promotions, branding, sales, and distribution that will produce immediate sales and also help you grow over time. You’ll know when you’ve found the right mix for you and your organization because it will produce profitable sales and enough demand to allow you to grow at a comfortable rate.
This chapter serves as a jumping-off point into the world of marketing. By reading it, you can begin to design a marketing program that works for you. The rest of this book can help you refine the program that meets your needs.
To make your marketing program more profitable and growth oriented, think about how to reach and persuade more of the right customers. When you understand how your customers think and what they like, you may find better ways to make more sales. The next sections help you get better acquainted with what you have to offer and start communicating those offerings to your customers.
Traditional marketers ask just one key question:
What do we need to tell customers to make the sale?
Then they flood the environments (both virtual and actual) with competing claims, trying to outdo each other in their efforts to prove that they have what customers want. This barrage of noisy advertising and one-up salesmanship is inefficient, wasteful, and, to many, an unfortunate source of social pollution.
A better initial question to ask is this:
What do I/we have uniquely to offer?
When you start right off by examining yourself in the mirror and identifying your genuine, honest-to-yourself strength(s), you’re many laps ahead of most marketers, whether you’re selling something as simple as your résumé, as complex as a new high-tech product, or anything in between. Your unique strengths form the core of your offering, and you should keep building your strengths in ways that are true to your identity.
Whether you’re marketing yourself (perhaps you’re a consultant or someone else who offers individualized services) or a business entity of some kind, you can’t make consistent and efficient headway by deceiving yourself and trying to deceive others. The more true to your core the marketing message is, the more effective it is. If you can’t find any unique qualities to advertise, postpone those media purchases and work on self-improvement or product development. (Perhaps you simply need to listen harder to what your customers say and make sure they’re so happy that they recruit new customers!) Then come back to your program with a stronger set of claims that any customer can clearly see are of benefit — that is, unique benefit, not just a run-of-the-mill, everybody-does-it-that-way benefit.
Marketing programs communicate benefits. Benefits are the qualities that your customers value. For example, your product may offer benefits such as convenience, ease of use, brand appeal, attractive design, local sourcing, healthiness, or a lower price than the competition. A service business, or an individual who provides services like consulting, may list benefits such as expertise, friendliness, and availability. The right mix of benefits can make your product or service particularly appealing to the group of customers who value those benefits. Make your list now: What are your core benefits, things that you can honestly say you’re good at and that customers may value?
If you have access to a friendly group of customers or prospective customers, tell them you’re holding an informal focus group with complimentary drinks and snacks (doing so helps with your recruiting) and ask them to help you understand your marketing needs by reviewing and commenting on your table. The goal is to see whether your lists of what customers know and feel about your product agree with theirs. Do they concur with how you described their emotional viewpoint and/or their factual knowledge base? (Chapter 4 gives more information about researching customer attitudes.)
Are prospective customers even aware that you exist? If not, then you need to bump up your marketing communications and get in front of them somehow to reduce or eliminate the awareness gap, which is the percentage of people in your target market who are unaware of your offerings and their benefits. (How? That’s what the rest of this book is about, so keep reading!) If only one in ten prospective customers knows about your brand, then you have a 90 percent awareness gap and need to get the word out to a lot more people.
© John Wiley & Sons, Inc.
Figure 1-1: How to graph and analyze your awareness gap.
Your target customer is the person for whom you design your product and marketing program. If you don’t already have a clear profile of your target customer, make one now; otherwise, your marketing program will be adrift in a sea of less-than-effective options.
One of the best steps you can take as a marketer is to find your chief strengths and build on them so you can add an additional degree of focus and momentum to your marketing program. The key is to always think about what you do well for the customer (don’t get hung up on shortcomings) and make sure you build on your strengths in everything you do.
For example, imagine that customers say your pricing isn’t as good as larger competitors, and you also feel that your brand name isn’t very well known. That’s the bad news, but the good news is that existing customers are loyal because they like your product and service. The thing to do here is build on this strength by creating a loyalty program for customers, asking for and rewarding referrals, and including testimonials in your marketing materials and on your website. Also, remind customers and prospects that you are the local alternative. “Shop Locally to Support Your Community” may be a good phrase to sneak into every marketing communication, whether on paper, signs, your vehicles, or the web. Building on your strength in this manner can help you overcome the weaknesses of your higher pricing and lesser name recognition.
Another aspect of your customer focus is deciding whether you want to emphasize attracting new customers or retaining and growing existing customers. One or the other may need to dominate your marketing program, or perhaps you need to balance the two. Marketing to new prospects is usually a different sort of challenge from working with existing customers, so knowing which goal is most important helps you improve the focus of your marketing.
As the preceding list indicates, every business has a different optimal formula for attracting customers. However, in every case, successful businesses report that one or two methods work best. Their programs are therefore dominated by one or two effective ways of attracting customers. They put between one-third and two-thirds of their marketing resources into their primary way of attracting customers and then use other marketing methods to support their most effective method.
When you answer this question, you’re taking yet another important step toward a highly focused marketing program that leverages your resources as much as possible. Your marketing program can probably be divided into four tiers of activities:
If you reorganize last year’s budget into these categories, you may find that your spending isn’t concentrated near the top of your list. If that’s the case, then you can try to move up your focus and spending. Cut the bottom tier, where your marketing effort and spending isn’t paying off. Reduce the next level of spending and shift your spending to one or two activities with the biggest impact.
I call this the marketing pyramid, and in workshops, I challenge marketers to try to move their spending up the pyramid so their marketing resources are concentrated near the top (which reflects the most effective activities). Ideally, the pyramid gets turned upside down, with most of the spending on the top floor rather than the bottom. What does your marketing pyramid look like? Can you move up it by shifting resources and investments to higher-impact marketing activities? Ideally, your marketing pyramid should have clear distinctions between the primary, secondary, and tertiary activities so you know where to concentrate your resources for best effect.
For example, a general contractor (builder) may choose the strategy of renovating and building residential homes close to downtown areas in appealing smaller cities and larger suburbs in their region to take advantage of a trend where professional couples are moving out of the suburbs and back to revitalized downtowns. Stating this strategy clearly is a great way to bring focus to the marketing program. You now know what kinds of projects to talk about in blogs and to local media and acquaintances and to show in your website portfolio. And you know who your customers are and will soon be brainstorming ways to find more of them (for example, by networking to local realtors who help relocate them).
You don’t have to get fully into the technicalities of strategies and plans right now, because in this chapter, I go over a lot of simpler, quicker actions you can take to leverage your marketing activities into a winning program. The following sections require you to think about and write down some ideas, so get out your pencil and paper or tablet to jot down notes while you’re reading.
What really matters in marketing are the points of contact between the customer and your communications, products, and people. These customer interactions (or influence points) with you constitute your marketing program. I always take care to list these influence points when designing a marketing program. To make a list of your own influence points, use the following Five Ps of marketing for your categories.
Determine which aspects of the product itself are important and have an influence on customer perception and purchase intentions. List all tangible features plus intangibles, such as personality, look and feel, and packaging — these are the aspects (both rational features and emotional impressions) of your product that influence customer perception.
List the aspects of price that influence customer perception. What does it cost the customer to get and use your product? The list price is often an important element of the customer’s perception of price, but it isn’t the only one. Discounts and special offers belong on your list of price-based influence points, too. And don’t forget any extra costs the customer may have to incur, like the cost of switching from another product to yours; extra costs can really affect a customer’s perception of how attractive your product is. (If you can find ways to make switching from the competitor’s product to yours easier or cheaper, you may be able to charge more for your product and still make more sales.)
List the aspects of placement or distribution (in both time and space) that influence the accessibility of your product. When and where is your product available to customers? Place is a big influence, because most of the time, customers aren’t actively shopping for your product. Nobody runs around all day every day looking for what you want to sell her. When someone wants something, she’s most strongly influenced by what’s available to her. Getting the place and timing right is a big part of success in marketing and often very difficult (see Chapter 16 for help with placement).
The web allows you to define your market narrowly and locally, or globally, or (and this is the really exciting idea that many businesses haven’t yet picked up on) in local markets other than your physical one. For example, if you have a bookstore specializing in children’s and young adult titles, then you would do best to be present in the local areas where there are the most children and young adult readers (see Chapter 4 for how to sleuth out demographic growth waves). The web can narrowly target the top five cities for your product. (See Part IV for lots of low-cost ways to find the best customers in the best markets.)
List all the ways you have to promote your offering by communicating with customers and prospects. Do you have a website? Do you routinely update your blog, Facebook page, and Pinterest boards? Do you advertise? Send mailings? Hand out brochures? What about the visibility of signs on buildings or vehicles? Do distributors or other marketing partners also communicate with your customer? If so, include their promotional materials and methods in your marketing program, because they help shape the customer’s perception, too. And what about other routine elements of customer communication, like bills? They’re yet another part of the impression your marketing communications make.
The web hasn’t finished revolutionizing promotion, and you can innovate to get messages out creatively and inexpensively in a lot of ways (see Chapter 10 for details).
The fifth P is perhaps the most important one, because without people, you can’t have a marketing program. List all the points of human contact that may be important to the success of your program. If you run a small business, this list may just be a handful of people, but even so, include this list in your planning and think about ways each person can help make a positive impression and encourage a sale.
The web has also revolutionized the process of making connections with people. Your professional and business Facebook pages, your blogs (which should be pulled into your Facebook page and your website), your tweets, your Pinterest boards, and so forth are all opportunities to build followers and friendships.
You need to find efficient, effective ways to positively influence customer perception. You want to use elements of your marketing program to motivate customers to buy and use your product (service, firm, whatever). The list of your current influence points for each of your Five Ps (see the previous related sections) is just a starting point on your journey to an optimal marketing program.
Now ask yourself the following questions: What can be subtracted because it isn’t working effectively? What can be emphasized or added? Think about each of the Five Ps and try to add more possible influence points. Look to competitors or successful marketers from outside your product category and industry for some fresh ideas. The longer your list of possibilities, the more likely you are to find really good things to include in your marketing program. But in the end, don’t forget to focus on the handful of influence points that give you the biggest effect.
To craft your own winning formula, think of one or more new ways to reach and influence your customers and prospects in each of the Five Ps and add them to your list as possibilities for your next marketing program.
Little details can and do make all the difference in closing a sale! Does your marketing program display inconsistencies and miss opportunities to get the message across fully and well? If so, you can increase your program’s effectiveness by eliminating these pockets of inconsistency to prevent out-of-control marketing.
Consider the numerous eBay sellers who fail to take and post high-quality photographs of the products they’re trying to sell and then wonder why they get few bidders and have to sell for low prices. These sellers can easily upgrade their photography, but they fail to recognize the problem, so they allow this critical part of their marketing mix to remain poorly managed.
Given the reality that some of your influence points may be partially or fully uncontrolled right now, draw up a list of inconsistent and/or uncontrolled elements of your marketing program. I think you’ll find some inconsistencies in each of the Five Ps of your program (don’t worry, though, that’s common!). If you can make even one of your marketing elements work better and more consistently with your overall program and its focus, you’re improving the effectiveness of your marketing. Answer the questions in Table 1-1 to pinpoint elements of your marketing mix that you need to pay more attention to.
Table 1-1 Getting a Grip on Your Marketing Program
Customer Focus | |
Define your customers clearly: Who are they? Where and when do they want to buy? | |
Are they new customers, existing customers, or a balanced mix of both? | |
Understand what emotional elements make customers buy: What personality should your brand have? How should customers feel about your product? | |
Understand what functional elements make customers buy: What features do they want and need? What information do they need to see to make their decision? | |
Product Attraction | |
What attracts customers to your product? | |
What’s your special brilliance that sets you apart in the marketplace? | |
Do you reflect your brilliance throughout all your marketing efforts? | |
Most Effective Methods | |
What’s the most effective thing you can do to attract customers? | |
What’s the most effective thing you can do to retain customers? | |
Which of the Five Ps (product, price, placement, promotion, and people) is most important in attracting and retaining customers? | |
Controlling Points of Contact | |
What are all the ways you can reach and influence customers? | |
Are you using the best of these right now? | |
Do you need to increase the focus and consistency of some of these points of contact with customers? | |
What can you do to improve your control over all the elements that influence customer opinion of your product? | |
Action Items | |
Draw up a list of things you can do based on this analysis to maximize the effectiveness of your marketing program. |
When you make improvements to your marketing program, what kind of results can you expect? As a general rule, the percentage change in your program will at best correspond with the percentage change you see in sales. For example, if you change only 5 percent of your program from one year to the next, you can’t expect to see more than a 5 percent increase in sales. Check out the next sections for help refining what to expect from your marketing plan.
Base sales are what you can reasonably count on if you maintain the status quo in your marketing. If, for example, you’ve seen steady growth in sales of 3 to 6 percent per year (varying a bit with the economic cycle), then you may reasonably project sales growth of 4 percent next year, presuming everything else stays the same. But things rarely do stay the same, so you may want to look for threats from new competitors, changing technology, shifting customer needs, and so on. Also, be careful to adjust your natural base downward if you anticipate any such threats materializing next year. If you don’t change your program, your base may even be a negative growth rate, because competitors and customers tend to change even if you don’t.
Start small with new ideas and methods in marketing so you can afford to fail and gain knowledge from the experience; then adjust and try again. Effective marketing formulas are developed through a combination of planning and experimentation, not just from planning alone. In marketing, you don’t have to feel bad about making mistakes, as long as you recognize the mistakes and take away useful lessons.
When it comes to marketing, I’m a positive pessimist. My philosophy is, “What can go wrong, will go wrong … and we’ll be fine!” I try to avoid being too heavily committed to any single plan or investment. I keep as much flexibility in my marketing programs as I can. For example, I don’t buy ads too far in advance even though that would be cheaper, because if sales drop, I don’t want to be stuck with the financial commitment to a big ad campaign. And I favor monthly commissions for salespeople and distributors because then their pay is variable with my sales and goes down if sales fall — so I don’t have to be right about my sales projections.
Flexibility, cautious optimism, and contingency planning give you the knowledge that you can survive the worst. That knowledge, in turn, gives you the confidence to be a creative, innovative marketer and the courage to grow your business and optimize your marketing program. And you can afford to profit from your mistakes.
You can improve a marketing program and increase your business’s sales and profits in an infinite number of ways. Following are just some of the ideas you may be able to put to use; keep searching for more ideas and implement as many good ones as you can.