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Nine Keys to Market Planning
 

Nine Keys to Market Planning

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I advocate a simple twelve-word social media marketing strategy. Communicate one message, promoting one brand, touching multiple audiences at no cost. It is made possible by an abundance of free and ...

I advocate a simple twelve-word social media marketing strategy. Communicate one message, promoting one brand, touching multiple audiences at no cost. It is made possible by an abundance of free and low-cost tools that afford simultaneous experimentation in multiple channels. However, successful implementation presupposes you first established a comprehensive marketing plan. Diving into a marketing campaign without first having a plan is analogous to the old phrase "putting the cart before the horse."

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    Nine Keys to Market Planning Nine Keys to Market Planning Document Transcript

    • Nine Keys to MarketPlanningI advocate a simple twelve-word social media marketing strategy. Communicate wordone message, promoting one brand, touching multiple audiences at no cost. It ismade possible by an abundance of free and low cost tools that afford low-costsimultaneous experimentation in multiple channels. However, successfulimplementation presupposes you first established a comprehensive marketingplan.Diving into a marketing campaign without first having a plan is analogous to the campaignold phrase "putting the cart before the horse." You are vulnerable to whatGordon Andrew of Highlander Consulting calls tactical soup. He defines thephrase as "getting bogged down in a flurry of marketing activity without placing marketingenough emphasis on how it will generate revenue and profitability."Describing a complete marking plan is beyond the scope of this document.However, I will discuss some basic elements of your plan. Here are a fewsuggestions to keep in mind. o1. Constructing a marketing plan is not a "once and done" task. It is a continuous process, as illustrated by the following 5 5-step diagram.
    • 2. The first requirement of a plan is to define your goals, preferably in writing. Let me return to my horse analogy for a moment. Can you image a race where the jockeys did not know where the finish line was? The situation would quickly become chaotic. Horses would run into each other as jockeys individually decided which direction was best. It may sound like a ridiculous example, but it is no different than running a business without a clear direction. Just like a race, knowing where the finish line is and staying focused on it is critical to success. Goals provide us with that direction. As Zig Ziglar says, "A goal, properly set is halfway reached."The ultimate purpose of marketing is to influence consumer behavior in ways thataccomplish your goals. What exactly do you want to accomplish? A logical placeto start defining your goals is by answering a series of questions. They includeareas like: • How many new clients do you need; how many can you currently accommodate? • How will increased sales affect your cost structure? For example, will you need to hire more sales associates or increase inventory levels? • What is your target revenue per new client? • What is the minimum revenue per client that you can profitably accommodate? • How would you describe your target customers in terms of key demographics like age, gender, location, education, income level, professional profile and so on? • Who is the ultimate decision maker in target organizations? • Where are potential customers likely to turn (Internet, newspaper, Yellow Pages, etc.) to learn about your products or services and to find businesses that provide them?3. Consider financial and non-monetary objectives. Examples of non-monetary objectives include things like closing percentages, page hits and customer traffic patterns. Be specific! A goal of increasing sales is neither constructive nor measurable. A goal of increasing sales 5% per month for the next six 2
    • months through a combination of a 4% increase in customer count and a $17 increase in average dollars per sale is.4. Business goals are rarely accomplished in a straight linear fashion. For example, a 24% annual sales increase is not going to come in equal increments of 2% every month. Your marketing strategies are going to take time to produce results. They are affected by existing sales patterns and seasonality that every business experiences. Establish a realistic timeframe for each goal, with appropriate interim benchmarks to measure short-term progress toward long-term goals. That allows you to take timely corrective action or adjust goals as needed.5. As you define goals and timeframes and the strategies and tactics to accomplish them, be aware of conflicting goals. Here is a simple example. What is the first thing most retailers do when they want to increase revenue? They hold a sale. In other words, they cut prices! Obviously, the hope is that increased customer traffic will more than offset the lower prices. However, it is still a conflict. Here is another example. Assume you want to increase the average customer purchase in your shoe store from $58 to $75. You therefore introduce a new line with a higher price point. Most customers are only going to buy one or two pairs of shoes. Therefore, while revenue from the new line will go up, sales of cheaper lines will probably go down. Conflicts are not necessary bad, and are often unavoidable. My only point is you need to look at the whole picture. Recognize and manage conflicting goals in your market plan.6. Specify the purpose or desired result of every marketing tactic. In other words, what action do you hope clients or prospects will take because of a marketing initiative? Your definition of purpose establishes the basis of measurement and encourages accountability. The desired result may include multiple objectives, including the following: • Business production • Generate new leads • Brand awareness • Introduce a new product or service 3
    • • Advertise a specific sale or promotion • Establish your expertise • Increase customer traffic • Consumer education7. Tactics rarely operate in a vacuum. You can sometimes leverage one against another. For example, relationships developed online can be taken offline. A social media connection is a far better sales prospect if you subsequently call or meet face-to-face. Similarly, you might precede a direct mail campaign with a subject matter media blitz via article marketing, blogging, email newsletters, press releases and so on.8. Sadly, the critical step of monitoring results is often omitted by small businesses. Don Bradley and Chris Cowdery of the University of Central Arkansas conducted a study titled Small Business: Causes of Bankruptcy. They found that 58% of businesses that filed for bankruptcy admitted to doing "little to no record keeping." Without an adequate accounting system, a business cannot fully understand its revenue cycle nor have a true picture of its marketing costs. You cannot manage what you cannot monitor, and you cannot monitor what you do not measure. Measure, monitor and manage, in that order!Include hard and soft-dollar components when measuring marketing costs. A$3,000 invoice for a newspaper ad is an obvious cost. However, a portion of thesalary and benefits of the employee who spent four days writing and editing thecopy is also a marketing cost. Do not fall into the trap of thinking that if a tactichas no hard costs (as with many Internet tools) that it is cost-free. The risk of thismind set is skipping the evaluation phase of the planning process. Time is a scarceresource in business. The opportunity cost (measured by what else you could bedoing) of your time has value. It must be examined and justified in light of themarginal revenue it generates.9. Finally, at the risk of over-simplification, the evaluation stage is largely a matter of comparing actual costs and marginal revenue to the expected numbers. However, knowing things like who responded to your promotion and whether they bought only sale items or made additional purchases are also 4
    • important. This is a time to be objective and cold-blooded! If a marketing tactic exceeded cost expectations or failed to generate the required sales, cross it off your list. Never fall in love with an idea.As you construct, implement and fine-tune your marketing plan, remember that itis a management tool. It is a not weapon to punish yourself or your employees.No one succeeds all the time; we often fail the first time! If costs exceed thebenefits, take a page out of Thomas Edisons playbook. When challenged aboutexperimenting with over 10,000 different substances before picking a carbonfilament for his light bulb, he replied, "I have not failed. Ive just found 10,000ways that wont work."Learning that something will not work is valuable information! © 2012 by Dale R. SchmeltzleAbout the author: Dale R. Schmeltzle, CPA is a founding partner of CFO America, professionalconsultants dedicated to helping business owners define, implement and monitor the strategic andtactical elements necessary to achieve long-term operational and financial success. CFO Americaprovides fractional or part-time CFO and executive management expertise not available on an in-housebasis.Dale has been a frequent author and speaker for numerous professional associations and non-profitgroups. He wrote Highly Visible Marketing, 115 Low-cost Ways to avoid Market Obscurity. He has alsotaught college level accounting and financial courses to non-business audiences. For more information,please visit http://www.CFOAmerica.biz, or follow us on Facebook athttp://www.facebook.com/CFOAmerica. Consulting CFOs & Executive Managers 5