For many businesses, the beginning of the month could be the start of a new financial year or new sales period.
It can also mean the start of a new allocation of marketing budget and a requirement to implement promotional tactics to meet the next set of sales targets and marketing objectives.
For some businesses, particularly those who perhaps don’t have access to the advice and skills of a qualified marketing professional, the arrival of the figure to being allocated to the marketing budget comes as a result of one of the following methods:
- What was spent last year/period with a bit added, or indeed taken away!
- It’s based on how much forecast profits will allow
- An allowance has been made to be spent on adhoc “things”– marketing being one of them
If your business is using one of the above methods, we would like you to consider changing the way your business approaches budgeting and be more scientific about how your marketing strategy and promotional budget is derived.
We firmly believe that marketing strategies that are based on clear objectives have a far greater chance of delivering a return on investment.
All too often, we still see very little strategic thought going into marketing planning. Consequently, the marketing budget gets treated as an expense that can be cut to increase bottom line profit, rather than an investment that can deliver more profit, and a more sustainable business. Sadly, this is sometimes also because the person responsible for marketing either does not have this expertise, or lacks the respect of directors to be taken notice of.
So, if you currently hold this view, your challenge is a personal one – to change your emotional thinking such that you consider marketing as an investment in sales and profit that can be flexed and justified according to output – just as the break-even of investing in a new piece of plant or machinery can be evaluated.
We find it encouraging when we meet a business owner and they begin to explain the different marketing activities they have tried in the past and are currently doing – this at least tells us they are aware of the advantages of marketing their business.
Albeit we do still get asked the question “So tell me, what can marketing do for my business?” which in today’s highly competitive, digital world is quite frankly astounding – everybody is marketing themselves every single day, in every meeting, every conversation, and every social post – in fact, every touch point they have with another person!”
So having established that marketing is a vital business process, we try to find out what it is that our clients 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.
Asking questions about their approach often 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!
Particularly in today’s digital marketing world where there are so many more metrics that can be evaluated accurately. Website visits, social media engagement, email responses, enquiry form submissions are a good starting point – but most importantly – conversion rates of quotes/enquiries to actual sales!
Sometimes the amount of data available can be very daunting and create even more doubt – which is all the more reason why careful planning is essential to ensure each element of your marketing programme supports each other and has a clear purpose.
Last year we were advising a growing business that had recently been in the national press because one of their products was having rave reviews.
As well as a massive rise in enquiries (which also meant lots of time fending off enquiries from customers not in their chosen markets), they were inundated with promotional offers, advertising and joint venturing opportunities – some free, some very expensive!
Apart from the enquiries and promotional offers being a distraction of time, the company directors were at their wits end trying to decide which, if any, to go ahead with, and even more scary – whether to diversify and create new product ranges to meet the demand from customers in other markets. A decision which would involve new designs, a search for new raw material suppliers, increasing manufacturing capacity, fulfilment services and, of course an increase in marketing budget to ensure the demand continued and the website could cope.
Faced with so many decisions, Simple Marketing Consultancy was approached to help determine the appropriate marketing strategy and promotional tactics.
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. We 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 waning due to their need to continually firefight 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 we were able to help the business get back to basics and think hard about why they were in business, define their USPs, who their customers were and how best to reach to them with appropriate marketing tactics. We were able to develop a marketing strategy and a focused plan of marketing promotional activity that met their financial and profit objectives. This included a long-term plan for new product development.
For them, this was a totally new approach to planning their marketing spend but the end result was a complete game changer.
They now 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 as the seven “P’s”. In other words, ensuring the company was easy to deal with and buy from and that each interaction and product review would deliver a five-star rating.
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 event but a phone enquiry that 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 promotional 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 once 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 activities that ensure 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 really ever be attributed with winning the business.
This is best illustrated as follows:
“An MD receives an email inviting them to a seminar. The MD attends and was impressed with the company’s credentials and the presenter 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 company’s other clients who said how good the firm was. Later, having also read a lot more about their successes from social posts, e-news bulletins, winning awards and press releases he’d read online and in trade journals, he had a need for their services and appointed the company.”
Can you say which marketing tool delivered the business? Was it the initial email, the seminar event, the personal selling approach of the presenter, the company brochure, the word-of-mouth testimonial, the advice articles, brand profile PR, social posts and emails or the corporate entertainment – or was it simply the combination of all!
In our view, the above example illustrates the need to have an integrated marketing mix. As long as this mix is delivering the right profit margin, and the overall sales figures are being achieved we 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.