Turn Marketing Cost To Marketing Investment
Often, when I talk to small business owners about the need for them to market their businesses properly, the conversation usually turns to how costly it can be.
People talk about the cost of marketing material, the cost of advertising, the cost of other marketing activities, and if they think to prepare them, the cost of preparing marketing plans.
I prefer to think of expenditure on marketing as an investment rather than a cost, and especially if what you spend leverages into multiple sale volumes.
But this is often difficult to see for a number of reasons:
- Not many small businesses have focused marketing plans so their marketing activity ends up as a shot in the dark without any significant returns
- As a result, their marketing is a scatter gun approach so the cost of running marketing activities is not met by significant increases in sales
- When they do decide to prepare a marketing plan, they hire a consultant, at a significant cost, and the resulting plan is hard to follow because they are not actively engaged in the “advice” given
- Consultant-prepared marketing plans don’t allow for the business owner to adapt and amend as they roll it out.
What these small business owners (you?) need is a cost-effective way to turn the cost of a marketing plan and its implementation into an investment in finding more sales.
I honestly have to say that a self-prepared marketing plan is the most likely to be implemented because you use your intimate knowledge of your business and your customers in the design of the plan. You know what has worked, and what hasn’t – you just need a method to focus the successes.
A DIY plan will incorporate activities that you know you can implement (even if you’ve never thought of these before) because you are deeply involved in thinking through how it could be implemented and how much time it would take. All you need is a formula to apply so that you can take it step-by-step.
Once you prepare your own realistic and focused marketing plan, you can monitor the implementation and the results, and figure out tweaks and changes as it rolls out, making it even more effective.
With a focused marketing plan, all your activities have a clear purpose and objective so that you are not shooting in the dark, and not using a scattergun. All your activities will be targeted at specific groups of customers to meet their specific needs and therefore providing more positive responses.
These are just some of the positive effects of preparing your own focused marketing plan all adding up to the fact that rather than just spending money on marketing and hoping for the best, you are actually investing in a strategy that will return growth in sales multiple times of the investment – a real Return on Investment.
The way I see it when you have Return on Investment, the money you spent is an investment!
“But wait”, you say, “I don’t really know how to prepare a marketing plan!”
Actually, you have all the knowledge already in your head. All you need is a step by step formula, and some tips along the way about what can be done.
Think of it as a recipe for baking a cake. You have to have the right ingredients and you have to mix them in the right order and take actions in the right order.
Well, you have the ingredients – being the knowledge of your product and what it can give your customer, and you have knowledge of your customers and their needs, and you have the knowledge of where you want your business to go. Now, you need the recipe to apply this knowledge in the right order.
Preparing your own marketing plan takes seven simple steps. I have written a little allegory (fairy tale!) in my book called SMART Marketing – 7 Easy Steps to More Sales, which describes the story of two business owners who take these steps to prepare their own marketing plan. These are the steps they take:-
- Identify the real product
- Identify the real customer
- Match the customer’s requirements in the business
- Use the selling price as a factor in marketing
- Identify the most appropriate marketing activities
- Develop the overall focused campaign plan
- Finalise and implement
This short video will start you off:
Identifying the real product is about seeing how the customer sees your product.
As business owners, we are justifiably proud of the way we put the product together. As a manufacturer, you are proud of the way you invested in the top manufacturing equipment and buy the best raw materials and implement strict QC processes. As a professional you are proud of your training and experience, and how you have trained all your employees to maintain the professionalism of your services.
However, what we are all guilty of, is forgetting how the customer sees us.
They don’t want to buy the greatest power drill (which you may be justifiably proud of), they just need a hole in the wall. If you cannot convince them that your power drill can make that hole in the wall in the way they need it made (fast, comfortably, with no mess) they won’t buy your greatest power drill.
We need to know their wants and needs so that all our “conversations” and messages can repeat the satisfaction of their wants and needs, not in how well the product is made.
In this way, you can come up with some clear and concise marketing messages that hit them where their need is.
Identifying the real market is similarly about seeing your customers for who they really are.
It’s not good enough to accost everyone who passes by your front window!
That’s how you waste time and money and incur a marketing cost!
But imagine if you knew exactly who is your best customer type? These are the people who need the product you sell. If you sell the world’s most well-made power drill or the world’s cheapest not-so-well-made power drill, you need people who first need a hole in the wall, and then who want whichever your product has – the long-lasting quality or the cheap use-and-throw variety. There are both types of customers for power drills out there so you’d better know which is yours and market to them!
If you are the seller of cheap power tools, and you invest your marketing dollars at everyone who wants to buy a power drill, you’ll only get half the effectiveness, But if you market your cheap power drill to people who want a hole in the wall and a cheap way to get it, you’ll focus your marketing investment into return sales.
These are the people waiting to throw their money at you if you know exactly who they are, and in your marketing messages, tell them you know what drives them and how you can satisfy their need.
Part 2 of the video training is here below:
Step three is to match the customer’s requirements.
This may mean that you have to change some aspects of your business, but you do this only if you can focus on your real customer’s real needs for your product.
For example, if your customers who want a hole in the wall and the cheapest way to do it also want to look over a variety of what are essentially the same power drill but in different colours, don’t tell them you only carry a limited number of models and their all the same anyway. Give the customer what he wants and change your business model to provide a wall of different models in their different colours.
Whatever you understand (through your work in identifying your real customer) what your customer wants, if it is critical to their choice and you don’t provide it, you will have to change up your business.
Otherwise, your investment in marketing stops when it is most needed to provide the returns.
Using your selling price as a marketing factor is step 4.
The accountants reading this will probably recoil in horror.
“No,” they will say, “You should calculate your selling price to make a profit!”
Yes, of course, that’s true, but once you know what you can sell your product for, you can then use the selling price, adjusted or not, as part of your marketing strategy.
If you are selling the cheapest, throwaway-after-one-use power drill (while making a profit) then make a big think out of it in your marketing. Tell your real target market who are only interested in cheap stuff, that your product is designed to give them exactly what they want – a cheap price, does the job, and that’s it, don’t pay for the frills.
On the other hand, if your power drill is beautifully made and will last 10 years and has a price to match that expectation, proclaim that just as loudly – that it can make a hole in the wall fast and reliably and will never run out, and calculating the price per hole in the wall, adding up to a fantastic investment in the tool.
This is why you don’t see an advertisement for a Rolex watch in Woman’s Day magazine – the wrong target market for the price of the watch.
Then step 5 is to identify your appropriate marketing activities.
As a small business owner, there are a hundred different marketing activities that are open to you to use to market your business. You can advertise, or hold annual sales, start a frequent-buyer program or reward customers for referrals. You can attend trade shows or give keynote speeches at meetings of your target market. You can give free samples, or offer two-for-one deals.
But what is appropriate?
That’s why you focus on your target market during step 2 when you identify your real market.
Doing that work, you will have identified the characteristics of your ideal customer – why they buy in terms of their pain and their need, what solution appeals to them, where they buy from, what they like to receive in treatment and attention when they buy, how they like to learn, and so on.
Knowing every thought and habit of your target market will tell you where to find them – where they gather – and how they like to receive information about solutions, and how they should be reminded about needs and pain.
In this way you can decide what is the best types of approaches to them – do they like to receive brochures or read advertisements? Will they take action on a cold call or will they need several drip feeds? What do they see as expertise and where will they receive that expertise?
In this way, an accounting software supplier may decide to provide sponsorship at an Accountant’s industry meeting and provide a free workshop on different software to accountants in the suburb.
A hardware store may give out brochures about power drills to handymen as they come in to buy a packet of screws, and offer them a free demonstration on how to put up a fence (using their power drill).
The accounting software supplier will not distribute brochures at the sausage sizzle outside their local hardware store; the hardware store will not offer demonstrations of power tools at an Accountants’ tax convention.
Once you have decided on your most appropriate marketing activities designed to funnel in your target market into knowing who you are, showing interest in your product, and finally making the buy, you can put the activities together into an overall focused campaign plan setting out when you will implement each stage and which activity goes with it. This will allow you to cost the campaign and set out goals and objectives.
Finally, put it all together and implement.
You should document your definitions of your best marketing messages and your campaign plan so that you can schedule implementation and – very importantly – monitor the effect of your marketing activities and evaluate them to see if they are working.
This will allow you to tweak your approach during the year’s marketing activities so that you remain focused on your goals and your target customers.
The money you spend in marketing should never be a cost unless you are not being focused and effective.
In that case, you really are wasting money.
You should be investing in marketing, and seeing continued returns on your investment in the form of growing sales many multiples of the amount your spend in your marketing activity.
One of the best ways to do this is to find a formula that works and then use your own knowledge of your business, so that you remain in control, to put together your own focused marketing plan.
A self-prepared marketing plan is the most likely to be implemented and not left on a shelf, because you will have used your knowledge of your business and your customers to come up with the plan and therefore you will know that you can implement it.
If it’s your own realistic and focused marketing plan, you can tweak it yourself, depending on the result, making it even more effective.
You can buy my book called SMART Marketing – 7 Easy Steps to More Sales to learn more about what marketing plans can do for you, and how easy it is to do it yourself.
Or, you can register for a free introductory online course on the seven steps – including a free report on How To Win More Customers By Pressing Their Hot Buttons and a free bonus training on How To Keep Your Customers Loyal By Lovin’ ‘Em To Death.
And hey, if you’re ready to write your own focused and SMART Marketing Plan, you can take our 7-Part SMART Marketing training and workshop course that will take you through the seven steps in the greatest detail and with the help of downloadable worksheets, walk you step-by-step through each of the seven easy steps to write your own marketing plan.
See you there!
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