Successful Business Plans

Lesson 3: Who Is Your Customer?

Marketing and Sales Strategies

Marketing Strategies

We have all seen great businesses, with superior location and a unique product, go broke and close their doors. In most cases, this can be traced to poor marketing and promotions. Many business owners ignore the potential in the effective advertising of their quality product and service. Small business owners tend to overlook the need for exposure.

Four essential areas to investigate:

1. Publicity
2. Promotion
3. Merchandising
4. Market Research

Each of these four marketing areas is available to you if you are willing to do the investigative ground work. The first step is to define your market. Who is your targeted audience? Know its inclinations, its needs, disposition, then gear your products and services to fit these.

Entrepreneur Magazine gives us good advice in this area: "All you have to do is forget that you are selling your product or service, and put yourself in your customer's place." Also, it suggests that you, "Ask yourself questions such as, 'where do I go to buy it?', 'what makes me buy it?, 'what media do I watch, read, and listen to, that makes me decide to buy it?' Simply put, you must know what media your market draws to.

You must develop a rock-solid marketing plan. Your profits will literally rise or fall on the basis of how well you develop and implement your marketing plan. Here is your chance to show your entrepreneurial expertise. Carefully consider the following ideas and strategies and implement each one into your plan:

• Develop marketing strategies by acquiring market information, by implementing feasibility testing, by accessing competitor track records, and by generating insight into the market's future.
• Pricing a product or service is as much a decision based on customer acceptance, as it is on cost. Consumer research and competitor track record and pricing should be demonstrated as your basis. Charge what the market will bear.
• Determine if your product or service is right for your target market and if they are ready to accept it.
• Channels of distribution need to be effectively and efficiently established if you are going to get your products and services out into the market. This includes production, transportation, materials handling and product packaging.
• Promote your product or service to your target market. Include the media you will use to promote your enterprise, related costs, and anticipated benefits.
• Your marketing budget must be realistic and clearly communicated.
• Your timetable needs to be accurate and plausible.
• Warranty and/or guarantee policies need to be defined.
• Professional resources needed to implement your plan require consideration.
• Monitoring the response of the market to your campaign needs to be considered.
• Testing one approach to another will provide direction for future plans.

Selling Tactics

Identify your sales force. Clearly think through the advantages and disadvantages of commissioned versus salaried salespeople. You may consider offering a combination of base plus commissions (monthly salary and car allowance), bonuses, and health insurance. Identify all these parameters in this section.

In the initial stages of your business, will you personally need to go out into the market and promote your product/service? What type of training will you offer for sales staff? Identify the need to increase sales staff as part of expansion and analyze the nature of future staffing.

• Will you hire only salespeople who have a college degree?
• Do your sales personnel need to be licensed by a state regulatory agency?
• Will you be selling your products/services through a network of dealers or distributors?
• Will your salespeople have protected territories?
• Where are those protected territories?
• Are your pricing policies set to market or industry standards?
• Will your salespeople be able to compete with the prices that you have established?
• If your business is a start-up and cannot presently afford a sales force, how do you plan to execute your sales strategy?

Your Unique Selling Advantage

This is what sets you clearly appart from your competitors and attracts consumers. Ask yourself the following questions:

• Will it make their life more comfortable? How?
• Will it save them time or money? How?
• Will you offer more customer service than your competition? If so, how is it superior?
• Will your customers' lifestyle be any different if they purchase your product/service? How?
• Which professional organizations do you belong to that will be of value to your customers?
• What are some of your competitors' weaknesses in reaching your target customer?
• How can you take these and turn them into strengths for your enterprise?

Advertising and Promotions

Develop a realistic budget for advertising by allocating about five percent of expected annual revenues. Include in your advertising campaign a good mixture of promotional matter. If your budget is relatively small ($100 - $200 per month), definitely include business cards, letterhead, envelopes, a brochure, postage, and a website. These will give your business plenty of exposure if you carefully follow up on literature sent out.

You do not have to spend a lot of money to promote your business well. Just do a little research on the associated costs in your area for the following items:

• Radio advertising on one station during morning drive time hours (6:00 AM - 9:00 AM).
• The cost of a convention hall, hotel, auditorium, gymnasium, classroom, or library meeting room that holds 30 - 50 people of a potential seminar.
• How much would a live-remote radio campaign cost? This type of investment will bring you hundreds, if not thousands, of customers within a six hour time frame, which would justify the cost. The broadcast from your business site or home office will draw customers to you directly.
• Have you researched how effective a press release can be for your business? If an editor of a newspaper, or a producer of a radio or television show likes your idea, they will interview you about your product or service. This is free exposure that only costs you the price of a few letters and stamps or fax phone charges.
• Look in the Yellow Pages under Television Stations, Radio Stations, Newspapers, and Magazines for the telephone numbers. Ask for the name of the Business Editor or Producer. Send them a personalized, double-spaced press release that is one or two pages in length. Follow up in two weeks to find out if they received your material. Don't ask them if they are going to do a story on you, simply remind them of your unique product, service or idea.
• A newsletter is another inexpensive way for needed exposure. You could charge for a subscription, or send it out free each month, or every quarter, to existing, new and prospective customers.
• T-shirts, pens, coffee mugs, paper weights, hats, etc., are a relatively inexpensive way to advertise your business. Check the costs by interviewing several "Advertising Specialties" companies and include this in your business plan. These promotional items are a subtle reminder to your clients every time they see your name.
• Offer to give public speeches to several organizations. The speaking and seminar business will enable you to develop new business relationships. Some organizations to choose from are chambers of commerce, business and trade organizations, civic groups, convention planners, service organizers, business firms, political affiliations, fraternal organizations, athletic clubs, or professional associations.

As you scan the Yellow Pages, you will be pleasantly surprised at the number of organizations you probably never knew existed. Also, consider the various reference sources available in the library.

Establishing Marketing Objectives

Once your marketing campaign is underway, begin tracking results. Conduct a few preliminary studies a few weeks into the campaign to measure the results, but don't expect these results to be final. In most cases, you should give your campaign six to twelve months to realize final results. Your target expectations may be realized sooner, which would be a result of a well-planned and well-executed marketing strategy. To help meet your marketing objectives, four critical goals should be considered:

• To increase brand awareness by a specific percentage
• To generate high-quality leads for your sales force
• To improve the morale of your direct sales force
• To increase sales by a specific percentage within a certain time frame
  Print this page
  
  

    1  2