Does My Small Business Need a Marketing Plan?
When I talk to small and micro-business owners, I always ask them if they have a marketing plan. Their answer is invariably “no”.
So the next question, in exploration of that, is usually from them: “Why do I need a marketing plan? What I need to do is in my head, and besides, I’m stretched enough as it is running the business”.
I have to point out to them that’s really three questions and I deal with them one at a time. The first question is, as a small business, do I really need a marketing plan?
Of course you do. It need not be a large document, and in a small business you may not need to detail every item in a traditional marketing plan, but you do need a marketing plan, it should be written, and it should deal with the key concepts of marketing.
You need a marketing plan because running a for-profit business without a marketing plan is simply opening your doors and hoping for the best. Finding customers, increasing sales, meeting break-even and growing profits cannot be done while simply hoping for the best. Even if you had, in your head, a sure-fire way to find new customers, or sell more to existing customers, writing it down and sharing it with your team is the best way to relieve the lonely stress of doing it by yourself – they can help achieve those sales targets with you if they know what your sure-fire procedure was.
If you were taking your family on holiday, would you simply buy tickets to where you were going and just arrive? No, you would have some sort of plan that you share with them and some key bookings. So why would you not have a plan when your business’ performance and its livelihood is at stake? Without a marketing plan, you do not know who are your optimum market, the best way of getting to them and appealing to them, the resources you will need to service them, and what you need them to buy and when.
To be really formal a marketing plan can be defined as a written document that lists the necessary actions you need to take in order to achieve marketing objectives. To be really effective the plan needs to be formalised in written form, moving your considerations from the general to the specific, from your business’ overall objectives, to marketing strategies in order to achieve those objectives, down to individual action plans of steps needed to carry out those strategies.
The second question in their response is “how do I prepare one?”
The process is logical, and if it really is “in your head” you would probably have followed the logic to get it up there. If on the other hand you have not followed a logical series of considerations, then dare I suggest that thing in your head is not really a viable plan?
The first thing to do is to consider your business objectives. What is it you are really trying to achieve? Is it world domination or merely being the best supplier of widgets in your town? Once you are clear on what you want your business to achieve you can then think about what sales objectives can meet what you want to achieve. If you want to be the best in a local area, then that starts to tell you what kind of marketing you will need to action – a very different form from the marketing you need for world domination. Having clarified your sales objectives, you can then set some marketing objectives, such as the size of the desired market you seek, the sales you wish to achieve from each region or sector or product, and so on.
Having set your marketing objectives you then need to step to one side and review where you are now. This allows you to see more clearly how to get from where you are, to where you want to be. For example, a review of your market might show that your customers come from the east of your suburb. However you want to achieve sales right across the suburb. Knowing where you are now, in relation to where you want to be then allows you to ask some relevant questions like why doesn’t the east of my suburb buy from me? Is it competition in the west, or some other structural issue such as transport or demographics?
Once you have that information you can then start to formulate marketing strategies, which are fundamentally your thinking through how to get around the issues you uncovered, that, having got around them, will help you achieve the marketing and sales objectives. Your strategies are best built around the “Four P’s” of marketing:-
- Price – your pricing strategy (penetration price, competitive price, premium, value etc)
- Product – strategies based around your product and its benefits to the customer
- Promotion – what promotion strategy (advertising, brand placement, referee-centric etc)
- Placement – strategies about where to locate your product in the marketplace (retail, wholesale, geographic area, on-line etc)
The contents of your written marketing plan need not include all the items in a traditional marketing plan as long as you record the logic of how you got there for future reference (“Why on earth did I decide to use a premium price?”), and the key concepts.
A simple list of contents might be:-
- Summary (so you and your team can quickly refresh your memory)
- Objectives of the Business
- Marketing Objectives
- Current Situation
- Marketing Strategy – Price
- Marketing Strategy – Product
- Marketing Strategy – Promotion
- Marketing Strategy – Placement
- Implementation – what you will need, who will do what
- Budgets – both of costs to implement as well as expected sales
- Monitoring – to measure your progress and allow for adjustments as you go
The third and final question embedded in their response is “how will it help if I’m so busy already?”
Firstly, if you prepare a properly thought out marketing plan, it will clarify the hundreds of steps you take every day in order to make sales. A logical plan makes clear who you should target, why they are attractive to you, why your product may be attractive to them, what their likes and dislikes are and therefore what to say to them, whether they are worth providing discounts to, which of them should receive most service, even whose call should you return first.
You will find that this alone removes substantial amounts of stress from running your business.
Secondly if it is written down and explained to your team, everyone will be pulling in the same direction.
Have you ever been in a situation where you come back from a service visit to find that one of your staff has made time-consuming appointments for you to meet potential customers whom you don’t want (perhaps because they are in the wrong location or industry)? Have you ever felt that your advertising was like firing off a shotgun and hoping that it might hit and attract one or two new customers? A written and shared marketing plan avoids unnecessary effort in areas that will provide a poor return on investment.
A thought out, written plan provides a clear direction and focus. If your “plan” stays in your head – not so much!
So there you are – why your small business needs a marketing plan, how you prepare one, and why it will actually help you.
Does your business have a marketing plan?
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