How to Create a Successful Marketing Plan
Successful marketing is all about getting your customers to buy your product or service. To do this, you need a Marketing Plan. It should include your goals and the tactics on how you expect to reach those goals. Typical goals include increasing sales; and tactics for doing that might involve hiring more staff, increasing advertising budget, or holding a sale. Your plan should also take into account your target market, what you are offering, competition, pricing, distribution, and advertising.
Describe the type of person or business likely to buy your product or service. Also, describe the size of this market and estimate how much your type of customer is likely to spend. Multiplying the number of customers by their estimated spending will give you the maximum monetary potential for the market(s) you have targeted.
List the major trends in your target market. Do the necessary research to complete this section. Also, it is important that you credit your sources since this adds credibility to your research. Various governmental departments have resources you can use. In Canada, the site CanadaBusiness.ca (http://www.canadabusiness.ca/eng/page/2864/) has market research and statistics information. In the U.S., the government has a Data and Statistics resource (http://www.usa.gov/Topics/Reference-Shelf/Data.shtml). Other governments have similar facilities.
The Target Market section should include:
- A description of your target market, including relevant demographic statistics such as their:
- Place of work or residence, depending on type of product or service you are offering.
- Marital status
- Family size
- Spoken and written language(s)
- Highest level of academic achievement
- Politics, values and/or beliefs. (Note: these topics can be very contentious.)
- Interests and hobbies
- Corporate title/position such as CEO, executive assistant, etc.
- Company size
- Explain the psychographics of your target market.
- What they have in common.
- What motivates them.
- Estimate the size of your target market in terms of gross sales and units sold. Back it up with facts and figures. Often, graphs and diagrams are useful here. See government statistics for basic information on industry, size, and location. (e.g. In Canada, see Statistics Canada. In the US, see Bureau of Labor Statistics and Census data. Also, there is a very interesting and understandable US site at Callersmart.com). Other ZIP-based statistical web sites.
- The trends that are affecting your target market including
- Industry trends
- Socioeconomic trends
- Government policy
- Changes in demographics
- Summarize both your direct and indirect competitors:
- Estimate their market share and their financial health.
- Compare their product or service to yours in terms of quality, price, service, warranties, image, etc.
Your customers and/or clients have wants and needs. Wants are "like to have", while needs are "must haves". You must concentrate on the customer/clients needs and use the wants to put some "sizzle" into your marketing material. For example, they may need a car and want it to be a sports car. In that case, you advertize "The sporty Renegator has all the zip you have come to expect in this class of car."
Some of the needs that you might concentrate on are:
- Fast delivery
- Value for money
No matter what you are doing or selling, you always have one or more competitors. The most basic competitor is the one that your targeted clients used before you came on the scene — sometimes known as the "do nothing" option. You always have both direct competition and indirect competitors. (Direct competitors sell products/services that are like yours. Indirect competitors are businesses that sell a product that is not the same as yours but could be used as an alternative. For example, if you sell hamburgers, your indirect competition are other food concessions that can satisfy your customers hunger.)
Both direct and indirect competitors have these attributes. For each major competitor, describe:
- The products and services that compete with your products and services.
- Their pricing structure for their competing products and services.
- Estimated revenues they receive for their competing products/services, if known.
- Their location strategy, if any.
- Any other markets that your competitors are in, besides yours.
- A SWOT (Strength, Weaknesses, Opportunities, and Threats) analysis of your competitors products/services.
Clearly identify the competitive advantages that your products/services have over your competitors similar products/services. Some examples of advantages that you can discuss are:
- Quality, real and perceived
- Better pricing structure
- Experienced management team
- Patents and copyrights
- Existing customer base
- Track record with regards to sales, R&D, and depth of product line.
In marketing your product/service, you must make clear its benefits, features, and uniqueness. Benefits are about your customers/clients needs and wants. They describe what good things the customer will enjoy when using your product/service (e.g. Faster, less effort, save money, feel better etc.). They are the most important thing to get across. Features support your claimed benefits and are about your product/service. They describe such things as the colour, weight, expertise, etc.
Your Services/Products section should cover the following:
- What benefits will your customers enjoy by buying your product or service? Will they save money, feel better, be smarter, etc.?
- What is the one thing above all else that makes your product or service unique?
- What other features does your product or services have? Consider packaging, quality, price, service, etc.
Pricing your product/service is extremely important. Some factors in determining your pricing are:
- A base price you can live with, long term, that ensures a profit.
- Your target market sensitivity to price.
- The price at which your competition is selling their products/services.
- Your overall business strategy.
- Are you a premium or discount brand?
- Are you trying to differentiate yourself from you competitors?
- Are you trying to break into a new market?
- Short term needs. (Overstocked, seasonal sale, new store/branch opening)
Using your competitors pricing as a base for yours is not always the best policy. If your product/service is similar to theirs, this may work. However, pricing along with the uniqueness of your products/services can also be used to differentiate your products/services from the competitors. Before setting a base price, look at your own objectives and considerations.
The Pricing Strategy section should cover the following:
- Your base price and how you arrived at this figure.
- Provide a summary of your fixed and variable costs.
- Prices for similar products and services.
- If your price is higher:
- Are you sure that your clients/customers are not price conscience?
- Can you justify the greater price than the competition in terms of unique benefits, marketing positioning, etc.? (Note that pricing may not be the most important factor in purchases. These other factors may outweigh them.)
- Why would a customer choose your product, apart from price?
- Unique feature?
- Do you offer better service?
- Higher quality product?
- If your price is lower, how are you able to charge less?
- Is the quality better than the competition?
- Are your production costs lower?
- Are you selling in large volumes?
- If your price is higher:
- Your costs and the factors affecting them.
- Discounts to students and seniors, or for cash sales rather than by credit.
- Trade-in policy
- Layaway policy
- Need to get a return on your investment and when you expect to recoup your investment?
Price can change based on external factors and sales strategies. Since sales are based on the factors we just discussed, we can use any or all of the following technique to offer lower unit prices to the client/customer. All the following methods increase the eventual income to you:
- Packaging your product(s) and service(s) to give the appearance of extra value:
- Where individual items bought separately would cost more.
- For particular markets such as limo firms needing extras in their cars.
- Additional features when package is purchased, such as extra studies when purchasing marketing packages.
- Up-sell occurs when someone needs a base product or service and you sell them capable product that does the same thing. Up-sell occurs before the client/customer commits to buying anything. For example:
- While a new car comes with basic hub caps, you might be able to up-sell the buyer to purchase a set of "cooler" chrome hub caps with wire spokes.
- Selling a large bottle of perfume for less than two of the smaller sizes because the unit price is lower, but the cost to you is even less.
- Cross-sell is used to bundle different product(s) or service(s) together to better satisfy a need. It also assumes that the client/customer is already committed to purchasing a base product or service. For example,
- When someone buys an aquarium for their home, they need the appropriate filter and heater for their size of aquarium that you can sell them.
- When someone engages a lawyer to incorporate a company, the lawyer can sell some of their other services such as keeping the company's minute book up to date.
- Continuity programs allow customers to purchase products and services automatically over time. You make only one sale, but the income from that sale continues monthly or yearly without interruption. Examples of these include:
- Subscription services like newspapers and magazines
- Telephone and Internet services
- Insurance premiums
- Club memberships
Your Sales/Distribution Plan should detail how the transaction between you and your customer will take place. It should include a discussion about how you plan on selling your product or service and it should outline all of the different people and companies involved in getting your product into the hands of your customer. You should explain in detail what type of distribution channels are available to you (account representatives, sales people, Internet, delivery services, other companies that will carry your product) what benefits you will have by choosing them and the length of time it will take to get your product to your customer. Don't forget to summarize your returns policy and describe any warranties or after-sales support you will offer customers.
Your Sales/Distribution Plan section should cover the following:
- How you distribute your product/service:
- By mail/email
- Through a wholesaler
- Through retail
- Through strategic partners and alliances
- Through a Website
- An independent sales representative, etc.?
- Outline all of the players or technology involved in getting your product/service to your target market.
- How your customers will pay for your product/service:
- If you plan to offer credit terms, describe the terms and conditions
- Discuss any discounts you will offer for early payment or penalties for late payment.
- Describe your return policy, service guarantees and/or any warranties you intend to offer.
- What after-sales support will you offer? Will you charge for this service?
You connect with your target audiences using advertising and promotions. Your Advertising and Promotions Plan details the way you will do this by using different media including advertising, public relations, brochures, a Website, trade shows, etc. If you have them, include samples, mock-ups, or links in the appendices.
Your Advertising and Promotions Plan should include:
- A description of how or if you will advertise your product, including what medium you will use (i.e. direct mail, Internet, radio, television, print, etc.)
- An advertising/promotional budget.
- How you will measure the affect of your advertising.
- Describe the plans you have to generate press.
- Describe the type of media you will use.
- The marketing material you will produce: brochures, sell sheets, business cards, etc.
- If you have a Website, describe how you will use it to promote your business.
- Describe any other forms of marketing will you use. For example, trade shows, telemarketing, direct marketing, etc.
To be successful today, businesses need an Internet strategy. Since whole books have been written on the subject, we will only summarize the most important aspects of Internet Marketing here.
Different types of web sites have their own design criteria:
- Shopping sites focus on selling things. Amazon.com is a well-known example of this.
- Blog sites allow people to comment on things happening in their lives or on the Web. For example, web journalists report on events as they happen.
- Simple static sites with pages that seldom change over time. For example, personal web pages and memorial sites.
- Sites that aggregate information from other sources on the Web. For example, Google News does this.
- Sites whose content is important and/or relevant to other people. Examples of this are the video site http://YouTube.com and the news and commentary site Huffington Post.
- Wiki sites that allow the community-at-large to change the content of the site. Wikipedia is the best known example of this.
- Auction sites that allow people to bid on items. eBay.com is the best known example of this type of site.
- Community sites like Facebook and LinkedIn.
Also, many sites are a combination of these types. What you want to do and who you want to reach will often determine the type of site that you need.
All but the simplest sites need a database to store their content, information on their users, and sales information. A well-designed web site database will affect the value of your site in terms of sales of goods and services. Consider the following when designing and developing your database:
- Users and their attributes, like name, location, financial information, etc.
- Products and services offered, their price, and characteristics, such as name, size, grade, specialty, quantity on hand, availability, etc.
- Orders, when, how much, cost, price, quantity ordered, hourly rate, service address, etc.
- Reports on activities on the site.
- Administrator interface allowing you to control and configure your site.
The look and feel of your web site is your face to the world. It is the "sizzle" that should appeal to your target market(s). To get a grip on what your site should look like, look at your competitors' sites. It should give you a good idea of what is needed and what is required in a typical site of the kind you need. Your look and feel should be consistent with your branding colour, font, and layout.
Keep in mind that styles in web sites change, just like in clothes. So, be prepared to revamp your site every 2-3 years. For example, rounded corners on boxes appearing on the screen were popular 3-4 years ago. In 2012-2013, rectangular boxes are popular and rounded corners now look dated.
Most sites should have the following facilities, regardless of its purpose:
- A Home page that should engage your user in 5 seconds or less so that they will decide to stay on your site to find out more.
- A Contact Us page which makes it easy for users to find your company and be able to contact you.
- A FAQ/Help page to answer common questions about your site.
- An About Us page that describes your company, its vision, and its top management.
- An associated Blog informing your users of things that are relevant to you and them.
- Links to the social sites like LinkedIn, Facebook, Twitter, StumbleUpon, etc.
Your web site serves two purposes: one for you and one for your users. For example, if you have a shopping site, it should be easy for the user to find what they want and it should be easy for them to buy what they have selected. As far as you are concerned, it should be easy for folks to buy your goods. In other words, your site should be easy to navigate and there should be no guesswork as to what to do next. A well-known book on this subject is "Don't make me think" by Steve Krug, ISBN-13: 978-0321344755.
Search engine optimization (SEO) is a way of making your site easier to find. Currently, Google is the preeminent search engine. They look for certain characteristics in each site and rate them according to a secret formula which is evolving. The higher your rating, the earlier your site will appear in their listing. Your goal is to be first in the list that Google presents. This is a complex subject and is best addressed by a specialist in SEO. However, there are some general rules that help increase your SEO score:
- Links to your site — This is the most important criteria in determining SEO ratings. It is the number of quality sites that link to your site. These links represent how many other sites believe that the content on your site is worthwhile. Generally, these links should be one way linking to your site without you necessarily linking to theirs. (Google cancels out mutual links between sites.)
- Content is king — If your site has interesting material that others value, as expressed by in-coming links or by traffic coming to your site, then your SEO rating will be higher.
- Meaningful page names — Each page in your site should have a meaningful name and contain meta data relevant to that page. (Your SEO expert will usually handle this.)
- Keywords — Each page should have one keyword or short phrase in the meta data that relates to the page content. For example, if a page relates to a service, then the keyword is the name of the type of service. There should be only have one page on your site related to a given keyword. (Again, your SEO expert should handle this.)
- Site name — The name of your site (its URL) should ideally reflect what you do or what your potential customers want. For example, www.ConsultingWorld.com is better than AbleAndCain.com, even if your firm's name is Able and Cain Consulting LLP.
Improving your SEO ratings can not happen overnight. It usually takes about 6 months to significantly increase your SEO ratings. Thus, you need a plan covering this period. Some things that you can do include:
- Hire an SEO expert full or part-time to continually maintain your SEO-related information.
- Analyze the competition to see what they are doing and what they think is important to reach the same target audience that you are trying to reach.
- Develop a calendar of events for your site to keep its content interesting. For example, schedule major topics for discussion, or webinars, or sales events, or discounts associated with dates like Christmas, or store openings, etc.
- Carry out a social media campaign. As an example, maintain a blog related to your site and/or relevant topics. It also needs to be updated regularly. As part of this strategy, tweet about interesting items, the webinars you will be holding, or other events happening on your site. If you or your staff do not know how to do this, you may also need to hire someone. (Often this service is provided by your SEO expert.)
- Incorporate ways of driving traffic to your site. For example, you can buy "Pay per click", belong to and/or participate in alliliate programs, and/or pay for banner ads.
- Budget for your web-based plan.
You need some form of measurement to know whether you are improving or not. Whatever your sales and marketing activity is, it should be measurable. It might be as simple as tracking the source of sales from the Web or a change in the sales bottom line. The Web is a great place to get measurements. Pay per click will tell you how effective your ad is and where the user comes from. Also, Google Analytics is free and gives you a lot of information about your users. Google AdWords is a free facility that allows you to determine which keywords and phrases will most likely work best for you in your ads. Other paid services offer ways of slicing and dicing the information that Google collects.
Part of measuring things is setting milestones. It might be a weekly report or when you will launch a new product. Milestones have dates and resources associated with them. For example, you might need 3 people to complete a task by November 13. If using an outside contractor, you may also have a budget associated with reaching a milestone. Setting up a schedule of milestones is often a negotiated process. For complex activities, project managers are often needed.
Joint ventures and partnerships are a way of distributing your products and services using someone else's facilities and customer base. This lowers your cost when you are trying to reach these same customers yourself. It also adds credibility and links to your web site. The financial arrangements that you make with these other folks varies a great deal. It can include shared costs, costs for leads, cost for sales, etc.
A joint venture is defined by a legal arrangement. A partnership with another company is usually a "looser" arrangement with little or no legal obligations on either side. The practical obligation is that the arrangement is mutually beneficial. If it is not, there is no reason to continue the partnership.
These other folks should complement your offering. If their sales are before or at the same time as customers who buy your services or products, then these folks can promote your business as part of a more "complete" package offering. If their sales come after you sold your product or service, then you can promote their products or services. For example, if you were offering a repair service for computers, you could partner with a company that makes or sells computers. If you had a cleaning product, then you could partner with makers of brooms, mops, and sponges. If the roles were reversed and you were the one selling computers, then you could recommend them as after-sales service providers.
Referrals build on your own customer base while Joint Ventures and Partnerships build on someone else's customer base.
Referrals are one of the most important, easiest, and least expensive ways of getting new clients and customers. Referrals build your reputation because they have come from a trusted colleague by "word of mouth". They also increase customer loyalty — once a customer recommends your products/services, they will hesitate to leave you.
Referrals are part of your overall efforts to keep your clients and customers happy. To get referrals from your satisfied customers:
- Ask them if they would be pleased to refer you to their friends and acquaintances who might be interested in your services/products.
- A simple script that a customer can use either with email or by phone is:
"Hi [prospect's name], I [noticed/you told me] that you [use/need] the [products/services that your company provides]. Would you be interested in hearing from someone I use?"
If their answer is "Yes", then contact them. This avoids cold calling your referrals and looking like a telemarketer.
- Don't be discouraged if the customer refuses to refer anyone at the time you ask. Timing is everything. It is best to ask after you have delivered the product/service and they have had a chance to use it and realize its benefits.
- Be persistent without being pushy. That is, whenever you contact them on any other business, include the request for referrals.
- You can also prepare new customers by asking them that when they are satisfied with your product/service, would they be willing to give you referrals. This lays a future obligation on them that allows you to contact them about the issue of referrals.
- If you can, be specific as to who or where you are looking for referrals. For example, "Do you know the marketing manager at ABC Corp?" or "Can you recommend anyone at ABC Corp that we could speak to?".
If you have a close working relationship with an existing client or customer, you can informally recruit them as one of your sales reps. Provide them with support material, such as brochures, links, business cards, etc. plus a simple list of reasons why their contacts might be interested in your services or products.
Lastly, customers and clients are not the only ones who can refer people to you. You can also approach your vendors for referrals. After all, if you prosper, so do they, making for a good symbiotic relationship where your relationship benefits both of you.
Follow-up on Referrals
Followup means getting as much information as possible about these prospects. For example, their title, phone number, email address, business address, responsibilities, budgets, etc. Also, ask the person who gave the referral to first call these people up and give them a quick "heads up" that you would contacting them. This avoids the problem of "cold calling" them.
When you contact the prospect, don't assume that they know all about you and your products and services. You will need to sell them, just like anyone else. The difference is that because you were referred to them by someone they know, you will have a higher level of goodwill going into your pitch.
As mentioned earlier, timing is everything. Don't give up on the prospect just because they turned you down the first, second, or third time. If you know anything about the prospect, use that as a reason to call them again.
Some prospects will never buy and others may not have the budget to purchase from you. That happens, but you can reduce the risk of this occurring if your customer qualifies the prospect for you first, if they are willing to do this. You would like to know that the prospect has the authority and budget to buy from you. Even for those without budgets or budget authority, they are still potential customers for later. For this reason, treat the poor prospects with tact since if they are offended, they may report back to your customer and that will devastate your ability to get future referrals from the customer. In other words, don't burn your bridges.
Lastly, when you sell to a prospect, thank the customer or client who referred you. Depending on the company policies, you can also treat them to lunch or similar rewards.
Refine Your Referral Strategy
The biggest problem that salespeople have with prospects and referrals is keeping track of them over time. When following up, you want to be able to know when you are supposed to call them, what you discussed previously, what you promised to do, and when you were going to do it.
It is strongly suggested that you use a Customer Relationship Management (CRM) software product. There are many CRMs on the market based on Windows, Mac, Linux, and the Web. These packages will also keep statistics on your referral program, which allows you to see the strengths and weaknesses of your referral strategy allowing you to improve it.
Gaining a client or customer is just the start of your relationship. You want to keep them as clients/customers for as long as possible for two main reasons:
- You will increase the frequency that they buy from you, else you will be out of sight and thus out of mind when they make new purchases.
- Selling to an existing client/customer is easier and much less expensive than going out and getting a new customer because it takes less time, effort, and money to convince them to buy from you again.
There are a number of ways to keep the relationship healthy so you will be able to sell them again:
- Keeping in touch with your clients/customers any way that you can. It can be done in a number of ways:
- Send out a monthly newsletter.
- Send out announcements of special blog posting that might be of interest to them.
- Send out white papers on topics that might be of interest to certain customers.
- Give away a calendar at the end of the year.
- Solicit their opinions on the service they are receiving or the quality of the product.
- Email them about special events, etc.
- Send out personal greetings on holidays, birthdays, anniversaries, bar mitzvahs, etc.
- Send out reminders of special events or services.
- Send out links to any article written about your company
- Rewards programs, also called loyalty programs, will keep existing customer engaged with you.
- Buy N products and get the N+1 free. Restaurants like to use these programs with free appetizers, free meals, and free desserts.
- Earn extra points for buying certain products or quantities. Airlines like this. For example, when you use "air miles" to get a free flight.
- Membership or discounts cards that give customers preferential treatment or discount. Costco uses these programs; and airlines use their cards to give frequent flyers access to their airport lounges.
- Continuity programs encourage the client to keep buying from you on a regular basis.
- Book and record clubs depend on this method as their primary source of income. Time-Warner are a classic example.
- Service firms are another group that use this business model. For example, air conditioning companies have service contract to change filters quarterly. Folks who look after plants in office buildings also use this technique.
- Museums and art galleries derive a major source of their income from this business model.
The Royal Bank of Canada® has an excellent set of examples. To see the Marketing Plan section of a sample business plan, click on any of the example company logos below: