For many businesses, April marks the beginning of a new financial year heralds a new marketing budget and the culmination of much deliberation over the marketing planning process. For some, particularly those who perhaps don’t seek the advice of qualified marketer, the arrival at the figure for their marketing budget is as a result of one of the following methods:
- What was spentlast year with a bit added, or indeed taken some away!
- It’s based on how much forecast profits allow
- An allowance has been made to be spent on adhoc “things”– marketing being one of them
If any of the above apply to your business I would like you to consider changing the way your business approaches marketing strategy and budget planning and this time approach things differently. Because, sometimes, even when a qualified marketer has been involved, marketing is still treated as an expense that can be cut to increase the bottom line, rather than an investment.
So, particularly for those with this view, your challenge is a personal one – to change your emotional thinking such that you consider marketing an investment in sales and profit that can be flexed and justified according to output – just as the break-even of a new piece of plant or machinery can be evaluated.
I find it encouraging when I meet a business owner and they begin to explain to me the different marketing activities they have tried in the past and are currently doing – this at least tells me they are aware of the advantages of marketing their business and I haven’t got to answer the old chestnut of substantiating why marketing is an essential part of running a successful business!
I often get asked the question “So Bev, what can marketing do for my business” which astounds me, as everybody markets themselves every single day, in every meeting, every conversation, in fact every touch point!”
So having explained why marketing is a vital business process, I try to find out what it is that you want to achieve to get a feel for whether marketing activity is carefully planned against a set of agreed objectives, recorded in a monthly plan, costed and the results measured.
Questioning this results in very mixed responses, ranging from “of course”, to “well no not really – how does anyone know how successful marketing is – it’s one of those black holes you can’t measure isn’t it”.
No it is not!
Last year I was advising a growing business that had recently been in the national press. They were inundated with promotional, advertising and joint venturing opportunities – some free, some very expensive!
Apart from the calls being a distraction of time, they were at their wits end trying to decide which, if any, to go ahead with, and asked me to get involved in their decision making process.
Their previous approach was just to spend on anything that sounded good and develop products based on demand rather than as part of a carefully managed plan for business growth. I found their product offering was so diverse they had at least five different target markets – consequently marketing costs were burgeoning out of control. Production lines and picking processes were becoming inefficient due to the different methods required to fulfil orders for their varied product range, staff morale was wallowing due to their need to continually fire fight and work long hours to meet demand, and, even though turnover was increasing, profits were static. Not many would look at this and say the root cause was a lack of marketing planning!
By carrying out a marketing review I was able to help the business get back to basics and think hard about why they were in business, who their customers were and how best to advertise to them. We were able to develop a marketing strategy and a focused plan of marketing promotional activity that met their financial and profit objectives.
For them this was a totally new approach to planning their marketing spend but the end result was that they knew exactly what products made the most profit, who purchased them, which elements of their promotional mix worked best and what else was needed to retain and attract business.
We also went back to some basic marketing principles – the promotion of the right products, at the right price in the right place. These elements of the marketing mix are often referred to as the four “P’s”.
When a product is also “service” based, three more “P’s” are considered: processes, people and physical evidence, and are known at the seven “P’s”.
All of these need to be carefully balanced and integrated together. If one area fails to deliver what is promised, there will be an impact on the success of others. e.g. A good impression made through a seminar or networking meeting but a phone enquiry is managed badly may lead to a lost sale. Their new marketing plan dealt with all the elements of the marketing mix and ensured there was a careful balance.
Also, because they now had a strategy and a promotional plan that was carefully structured to deliver results, it was easy for them to appraise and evaluate the worth of any subsequent future opportunities. They compared the new opportunity to the initiatives in the existing plan and found they could decide very quickly whether it offered better value and effectiveness and were able to accept or decline ideas very quickly.
In summary, marketing planning is an essential part of running a business. A full marketing review should be done at least every year, even if only tweaks are made to ensure strengths, weaknesses, opportunities and threats are identified. Promotional activity should be planned in advance, evaluated regularly and carefully costed so that results can be measured.
Finally, please remember that it is unlikely that any one single promotional activity will be as effective as a carefully planned combination of activity that ensures your target market is exposed to your brand or product offering at a number of touch points. This is often why marketing gets its “black hole” reputation as no one single element can be attributed with winning the business. This is best illustrated as follows:
An MD received a direct mail letter inviting them to a seminar. The MD was impressed with the presenter who was amiable and knowledgeable. Afterwards, the MD, expressed an interest, but had no immediate need. Later the MD was entertained at a corporate dinner where he met some of the presenters other clients who said how good the firm was. A year later, having also read a lot more about their successes from their e-news bulletin and in news paper press releases he appointed the company.
Can you say which marketing tool delivered the business? Was it the initial direct mail letter, the personal selling approach of the presenter, the company brochure, the word of mouth testimonial, the keep in touch news or the corporate entertainment – or was it simply the combination of all!
In my view, the above example illustrates the need to have an integrated marketing mix. As long as this mix is delivering the the profit, and the overall sales figures are being achieved I would deem the strategy a success . Of course, each element can be tested to see if the end results are affected by changing approach or not doing one element, but only one element should be tested at a time.