The U.S. Small Business Administration (SBA) attributes the lack of planning as the single biggest cause of business failures in the United States. It’s simply not true to say if you build a better mousetrap that buyers will beat a path to your door. Even if yours is the best product in the world, it will fail without a sound, strategic approach to the market.
The power behind planning your marketing strategy is twofold:
- On one hand, if you take the time, energy, and initial investment to carefully determine your “high performance tools,” target markets and needs, and market segments, you can save yourself significant amounts of money by avoiding poor marketing efforts and increasing your sales by reaching a more targeted buyer.
- On the other hand, by not planning your marketing strategy, you can spend too much time and resources on the wrong marketing effort and miss possible opportunities for new markets and sales. Ultimately, you could lose lots of money on wasted efforts, or worse, you could be another business statistic that will increase the SBA statistics on failed businesses.
Case in Point
To illustrate a potential pitfall that could occur if you don’t do some market planning, take the case of a manufacturer of telecommunications equipment:
This company’s market niche was network diagnostic equipment, and the company did very well selling its product to telephone equipment manufacturers and various phone companies.
Because the company had the expertise, and not because the market wanted or needed it, it decided to develop a new type of switchboard that routes incoming and outgoing phone traffic for large telesales operations. More than $2 million in product research and development was spent on this new technology before the company determined if it had:
- A product that filled a market need; and
- A marketing and sales strategy that would allow them to cost effectively reach a new market segment.
Once it began investigating the marketability of its technology, the company quickly learned that its product didn’t particularly meet any new market needs. In addition, by introducing the new product, the company discovered it would be in direct competition in the market with the buyers of its diagnostic equipment.
Therefore, if the product was brought to market, the company’s lucrative diagnostic equipment market would be destroyed. The company would also face established competition from companies that were well entrenched in the marketplace. Because of its lack of research and strategic market planning, the company made a costly mistake.
Poor Planning = Losing Money
Not only can poor planning cost your business money when it comes to product introduction, it can also cost you money and your credibility once your marketing efforts have been published through company’s website, landing pages, magazines ads, company newsletters, or brochures.
For instance, have you ever received a newsletter from a company that offered services you were interested in only to have your interest quickly wane when you found several typos in the first article? Because of the errors, you get the impression they are unprofessional. The company would have been better off to do nothing than to advertise their lack of professionalism to their entire market.
As you can see, poorly planned or executed moves in a marketplace can have lasting negative effects on your company. In addition to an immediate loss of income, marketing efforts are often the first impression that prospective clients have of your company.
From that first impression, both conscious or subconscious decisions are made as to whether or not your company will receive any business. Unless you have unlimited funds (that you don’t care if you lose), developing a marketing strategy can save and make you substantial amounts of money.
By developing a performance-based marketing strategy, you will:
- Analyze competitors;
- Assess your strengths and weaknesses;
- Establish realistic goals and objectives;
- Optimize time and money in the implementation of your plan; and
- Position your company to achieve its ultimate market potential.
High Performance Tools
Part of the success you will find in marketing is your ability to integrate numerous “high performance tools” into your overall strategy. High performance tools are the various media, methods, and resources you can employ in the development of a sound, performance marketing program for your company.
For instance, if you set out to build a house, you wouldn’t expect to create the best house possible if you limited yourself to using only a saw and hammer.
Instead, you’d use every tool in your toolbox, and probably learn about and incorporate more, so you could build your house as strong and as fast as possible.
The same principle applies in marketing. You have numerous high performance tools available that, when combined in a well-developed strategy, will help you achieve a better result faster.
The list of high performance tools below is meant as a guideline of resources for you to review. Not every one will be appropriate to your situation, but probably 50 percent or more can and should be applied in any marketing scenario.
Most of the tools listed here are or will be described on my blog.
To help you incorporate them in your marketing plan, the tools are divided under general categories: professionalism and image, strategies, planning, advertising, public relations, and sales.
High performance tools are vital to any marketing strategy’s success. Review all of your high performance tool options to build a strong presence in your particular market:
Professionalism and Image
- Attire of staff
- Business cards
- Company name
- Company identification or logo
- Demeanor – personal and phone
- Physical condition of business
- Product packaging
- Unique selling proposition
- Benefits list
- Follow up
- Innovative distribution methods
- Location of business
- Market positioning
- Market segmentation
- Media mix
- Product mix
- Public relations
- Technology usage
- Sales methods
- Implementation – who will follow the plan
- Marketing plan
- Market research
- Media plan
- Planning calendar
- Co-operative advertising
- Direct mail
- Mailing lists
- Native advertising
- On-hold marketing
- Outdoor and transit advertising
- Online video ads
- Online display ads
- Radio advertising
- Retail display advertising
- Search ads
- Social media
- Specialty advertising
- TV advertising
- Trade display advertising
- Trade shows
- Association memberships
- Community involvement
- Copies of previous feature articles
- Feature articles
- New product releases
- News releases
- Publish book
- Radio talk shows
- Speaking engagements
- Special events
- Television talk shows
- 800 phone numbers
- Financing terms
- Follow up
- Multi-media presentations
- Presentation materials
- Sales aids
- Sales calls
- Sales training – ongoing
Target Marketing: Demographics and Psychographics
Demographics – the identification of common characteristics of a population, especially those of age, sex, income, and education – allow you to determine to whom you should address your appeal.
On the other hand, psychographics – the lifestyle characteristics of a target market, such as hobbies, preferences, or social groups – tell you what type of appeal may be most effective in reaching your prospect.
Targeting your market with the use of demographic data helps you get the most out of your sales and advertising efforts because you can better target those consumers who are most likely to purchase your product or service.
To determine where and how you should advertise, you need to understand exactly who your prospect or potential customer is. Ask yourself these questions:
- Is the product or service you offer geared to a consumer or business prospect?
- Can everyone in that consumer or business group use your product, or is there a particular type of business or individual that is more apt to purchase it?
- Does age, sex, income level, or lifestyle of the business or individual indicate a more qualified prospect?
For instance, if you know that families with incomes under $30,000 per year typically do not buy your product, it would be too costly to direct a more general, overall advertising campaign.
Instead, you should identify and target higher income families with your advertisements and sales materials. By targeting your promotional materials to those prospects most likely to buy your product, you will obtain a higher response rate at a lower cost.
Every market will have different requirements for targeting. For instance, assume you have a product that appeals to a wide age group. If you create a direct mail piece or display ad, say, to appeal to the higher income 45 to 55 age bracket, the appeal used for that group may not work at all for a different age bracket.
To help you define your particular market through demographic data, read the instructions for and complete Performance Marketing Checklist #4: Defining the Demographic & Psychographic Profile of Your Market.
As mentioned above, psychographic profiles are lifestyle characteristics of a particular consumer and, for example, can even be based on the type of credit cards consumers carry or the purchases they make with them.
Psychographics are used to target a given market even more effectively than demographics alone. Psychographically correct messages will positively influence your target market and increase sales.
An example of how psychographics are effectively utilized can be found in American Express ads, which typically show an upscale businessperson or couple vacationing or doing business with their American Express card.
Because American Express knows that these people are their market, they communicate directly with them through the appropriate visuals, dialogue, and situations.
Television advertising, in general, is probably one of the best places to study psychographics.
Notice the advertisers that sponsor football games. They are typically automobile companies that feature their more “macho” pickups or other four-wheel drive vehicles to appeal to the mostly male audience.
You may also observe many beer commercials, most of which relate directly to football. These commercials positively promote the image of those who enjoy playing and watching football, while advertising their product.
Similarly, commercials seen during a televised golf tournament, if not directly selling a golf-related product, will usually feature a golfer using or promoting a particular product.
As another example, assume for a minute that you are promoting a skin product that provides sun protection. If you have determined through your psychographic analysis that a great many of your prospects are snow skiers, portraying your product in a snow-skiing environment would have more impact than showing a windsurfer using the product.
People relate best to other people and images that are like themselves. They will not notice a commercial or ad that uses psychographically incorrect images and messages, or if they do notice it, they will not be influenced by it and will often dismiss the viability of the product.
To get a better idea of the psychographic characteristics of your consumers or buyers, complete part 2 of Performance Marketing Checklist #4.
The checklist has listed only a few questions to get you started on a psychographic profile. Feel free to write any characteristics that apply to your market on the blank lines.
In addition, part 3 of Performance Marketing Checklist #4 is available for you to evaluate the differences between an end consumer and customer. This will help you better determine your target market.
A market segment is any group of consumers who have the same reaction to a given marketing stimulus. To be economically feasible, a market segment must be reachable through some means of communication, and it must be large enough to warrant a seller’s effort.
Market segmentation is useful in both consumer and industrial markets. Because they are so large, consumer markets can be better managed when segmented into several small manageable parts.
On the other hand, business or industrial markets may be segmented to take advantage of in-place distribution systems, the expertise of distributors or reps in a particular vertical market, or to help create an impression in the mind of the buyer that the seller specializes in their type of industry and is best qualified to serve that market.
A vertical market is a specifically identifiable segment of what may be a larger overall market, or it may stand alone. For instance, a computer store sells to businesses but has some products that are useful only to architects. In this case, architects are a vertical market segment.
Some of the more successful types of segmentation methods used in recent years include:
- Geographic segmentation. This type of segmentation is especially useful for small businesses that cannot afford to penetrate a national market.
- Demographic segmentation. A widely used method, demographic segmentation simply means that markets will be targeted based on age, sex, income, occupation, race, or other such variables. These variables, however, have not been found to be accurate predictors of buying behavior so use this method cautiously.
- “Half-heavy” segmentation. Half-heavy segmentation operates on the theory that one-half of your customers account for 80 percent of the total business. It would seem logical then to concentrate your efforts on that half. The problem, however, lies in the fact that this 50 percent of your customers may not be seeking the same benefits from a particular product, and a single tactic cannot be employed to reach these customers.
- Benefit segmentation. Benefit segmentation has been found to be a better predictor of buying behavior than demographics or consumption figures. This approach is based on being able to measure consumer value systems in detail. A complex method to employ, it requires a skilled researcher to determine the multi-dimensional aspects that affect a buyer’s behavior and relate and rate those aspects in such a way as to determine the groups of people that share similar degrees of importance regarding the benefits of the product.
By planning your marketing strategies before introducing your product or buying your advertising, you will nearly guarantee a better chance for business success.
Think of strategies unique to your business and get your creative juices flowing. Be prepared to do a lot of researching and self-evaluation.
Learning about your target market and market segmenting are only a few of the areas you will need to know and understand. Don’t be intimidated by the hard work it will take.
Rather, get excited about developing your marketing strategies. The power they hold is critical to reaching your market and selling your product or service successfully.
Ideas: Performance Marketing Strategies for Manufacturers and Wholesalers
Many strategies that may be a bit out of the ordinary have proven to be excellent moves by those manufacturers and wholesalers who have employed them.
If you are a manufacturer or wholesaler, consider some of the strategies below. These strategies also illustrate much of what is to come in my future blog posts. Many of them will be discussed in detail and you will learn how to plan for and implement them effectively.
By using video product demonstrations, one manufacturer was able to penetrate a national market – without any sales staff or rep firms! The video, used in conjunction with landing pages, direct mail, telemarketing, and a very tight follow-up system, enabled the firm to extend its market area and significantly reduce sales costs.
Managing a remote and/or contract sales force can be costly and management intensive. Video product introduction could be an excellent way for you to reduce these costs as well.
Use Customers as Product Demonstrators
When you don’t have sales coverage in a particular part of the market, consider having enthusiastic customers, who live in the area, give demonstraions or demos of your product to interested prospects.
Work out a set fee for them to give a demo, and give them a credit toward future purchases of your product. You get the benefit of a testimonial as well as a demo and usually at a cost that is far less than sending a salesperson to the location.
Be sure to coordinate all arrangements with both your prospect and demo customer. Don’t rely upon the demo customer to do it. Immediately following the demo, get back on the phone with your prospect and ask for an order!
Use Mobile Demo Sites
Last, but not least, if you don’t have coverage in an area, yet you want to get some market penetration, set up a mobile van to demo your wares on occasional road trips.
Companies with huge pieces of manufacturing equipment set up in a semi-truck as well as companies with smaller equipment packed in a pickup have successfully used this marketing strategy.
Precondition your market with heavy performance-based advertising, both online and offline, including old school direct mail. Prequalify all inquiries by phone or email, and make a few additional calls to set appointments with key prospects who may not have inquired.
Plan all of this some weeks in advance and schedule tight individual appointments or group appointments to demo your products in the new market area, or both.
Ideas: Performance Marketing Strategies for Retailers
Innovative retailers have used many interesting strategies to get the attention of their marketplace. Some of the following techniques may work well for your retail business.
Offer Extraordinary Customer Service
If you don’t have a product the customer is looking for, offer to find or get it, even if you have to buy it from a competitor! This type of extraordinary customer service wins customers for life.
It may be costly to get started because it will take up staff time, but if you track the lifetime value of a good customer, you can see what it will bring you and determine if it will be worth it to you in the long-run.
Offer Free Classes or Events (Online and Offline)
Depending on what you sell, see if you can offer free, how-to classes that will interest customers and possibly feature one of your products. For example, if you sell kitchen appliances or utensils, offer free cooking lessons with a minimum purchase or simply as a way to bring in new customers.
Apply the same strategy to sponsoring free events that will advertise or enhance your reputation as a retailer on the cutting edge. If you own a clothing store, for example, how about organizing a fashion show at a local mall or upscale restaurant?
Be creative in applying these strategies to your business. If done with foresight and good planning, any initial costs will be more than worth your efforts.
Ideas: Performance Marketing Strategies for Service Firms
If you have a business that offers a service, then you have the same opportunity to reach your target markets as any retailer or manufacturer has.
You can modify the strategies discussed above to suit your particular service, or you could try one of the strategies discussed below.
Service firms, more than any other business, can benefit from working with an educated market.
- A marketing consultant can accomplish far more for a client who understands the basics.
- A printer can do a better job if the customer knows how to prepare a project for the press.
- A certified public accountant can streamline his or her practice by helping clients know how and what to prepare for taxes and business financials.
Education can come in several forms. Free online or real-world seminars on relevant topics are great for both customers and prospects alike.
Newsletters, Facebook fan pages, LinkedIn presence or company blogs are an effective and relatively inexpensive way to educate a target market. You can also consider writing a brief, yet helpful, how-to free report or short ebook that you can distribute on your website or even at your place of business, trade show, or together with your sales material.
Give Something Back to the Client or Customer
One service firm that prepares presentations for architects creates a free, self-promotional video for the architectural firm who hires them to produce five or more projects.
Many doctors and dentists trade a free visit for the referral to a new patient – knowing full well that the lifetime value of the new patient will be worth far more than the single office visit they will give away.
- The power and importance behind planning can be seen in the success of strong, healthy businesses. Planning gets you to focus on your needs, resources, markets, and costs before jumping into your markets.
- A well-strategized approach to the market is the only way for a product or service to succeed.
- Make a strong, favorable first impression in your marketing literature. Be professional!
- High performance tools are strong “weapons” that will enhance your marketing strategy. Use them wisely and to your best advantage.
- Optimize your market potential with a well-developed marketing strategy.
- Use demographics and psychographics to find your target market and optimize your market penetration.
- People relate best to people and images that are like themselves.
Reduce your costs by segmenting your market.