BEN Investability 2011 Sales & Marketing Greville Commins
Overview What is Marketing? Marketing content in the business plan Developing your Marketing Strategy & Marketing Plan How will you take you product to market? What does a marketing plan look like? What mix of activities should you define in your marketing plan? What should you look out for when investing? Developing your sales activity Definition of the sales process – for your marketplace What sales methodologies can you consider? How does a well defined sales process help the investment decision?
What is Marketing? Finding profitable things Checking the product has; to do What product? Untapped potential Where? Disruptive influence Who? Competition that are not ready When? A route to market How much ? Barriers to entryEntrepreneurs Investors focus here focus here
Why is Marketing important? To discover and define a need or problem a customer has To research and quantify markets with potential customers To promote the product in the eyes of your customer….to generate demand Good marketing is needed by all businesses…..and investors
Make sure you do some market research Talk to/survey potential customers Research the web, dig deep Analyse announcements from potential competitors Gather information from independent sources Don’t forget your experience, of the market, is valuable too You will always learn something of value from research Enables the building of a well defined target market.
Choosing the right attractive market Markets where: profit potential is high No company is in market control At right point in the life cycle Growing the right price (profitable) is possible Route to market Defining an attractive market is a key component of your business plan. You need evidence to validate your choice of market Update your data regularly, the world changes all the time Investors are often looking for a market in excess of $1Bn before they get interested.
Product price position in market… Formulation of price/value positioning Examine similar products Study/analyse competition Look at customers behaviour and buying power Define price that reflects the value delivered….not a cost of delivery Who appropriates value out of the product… Assess value to end customer (what will they pay?) Value added by others Customer vs Consumer Consider costs of different levels of distribution Direct sales, Distributors, Wholesalers, Retailers Internet sales, Mail order
Understanding the competition• The competition: SWOT analysis Who are they? Their size & market share? What do you have that’s better? Where are their weakness’, what are yours? How can they be beaten? Which customers are using the competition? Where are there opportunities that you can win? Your advantages and disadvantages? For example, price, quality, performance, brand, customer loyalty. Why will customers buy your product or service instead? Investors deeply sceptical about markets with no competition
Marketing strategy (How will you deliver the business) The Marketing Strategy is how the company will Go to market and establish a position Only Build a brand identity Target customers THREE! Define products and prices Leadership, Promote products Differentiation Sell through which channels or Focus Define Objectives & Measure results Porter (1980) Investors: If a company cannot clear define HOW they will deliver the business – you should pass!
Strategy influencing factorsMany factors in your business influence your strategyReputation Brand recognition/reputation Good & Trust will Differentiation Problem importance Customer & Sales channels MarketKnowledge Future Market/Application/problem knowledge Team skills and experience RoadmapTechnology & Product h/w and/or s/w invention, patents Skills Financial stability, funding, profits
Developing your Marketing plan (The strategy in action) Marketing strategy is “HOW”, Marketing plan is “WHAT,WHEN,WHO”. A good marketing plan, inside the business plan, builds confidence that you know HOW you will drive demand The marketing plan is your strategy in action. What mix of activities should be defined in the marketing plan to achieve marketing objectives? Create awareness of a problem or need Build awareness of the solution (your product) and Brand recognition Sales lead generation activities (and customer acquisition costs) Key investor questions How to win customers, cost of getting each customer, cycle time to business
Marketing communications (what you say and how you say it) Various activities Brand building, Logos, market positioning Web presence – targeting who? Social networking plan, blogs / Facebook / Twitter More in skill session 3, Social Media for marketing, 1 st Nov Product and/or Brand launch plans Launch timing/location analysts meetings, briefings before launch press launches, stimulate articles PR (Press release) activities Sales tools, flyers, brochures, datasheets Support sales demand
Developing your Sales strategy The sales strategy is how the business objectives are delivered in sales terms Sales leads generated by Marketing activities or Sales activities Selling brings in todays orders To which targeted customers (your focus of efforts) Who will you contact first? Why should they buy? How will they buy? How will you support them? Through which sales channels Direct, Distributors, Tele sales, Web/internet, mail order
The sales “Hopper” Sales leads All businesses have a sales pipeline (“Hopper”) Depends on the nature of your business, your sales cycle time your success rate Sales leads feed your pipe line to achieve your sales targets. The Marketing plan defines how leads will be generated Ongoing sales activity generates leads too Sales orders
Selling is a process In Business to Business selling as opposed to retail sales Rarely (maybe never) does anyone in business buy at the first meeting. Need to understand your customer(s) buying behaviour Large companies / organisation structures take time Counterparts have different roles & responsibilities Personalities & Behaviours Experience (of you and them) Even web sales need to observe a sales process Investors need to understand each companies sales process, it affects cost of business, growth, profitability, risk, return….
Understanding the Sales Process You need to define the sales process for your business Closing Prospecting Supporting Relating Advocating Discovery Create solution
What do we do with this process? Need to understand each stage in the selling process It’s all about them NOT you! Define what key messages to convey at each stage Prospecting Relating, etc Marketing tools support each stage of the process Assisting in transitions between stages Track the process use feedback to fine tune to suit your marketplace How you will sell to customers needs to be defined in your business plan
Conclusion: Focus on What, When, Who, How In your business plan Sales & Marketing section be clear and specific about; What you will do How you will do it When will you do it Who will be responsible