How to Plan Your Marketing Strategy
We look at how business owners can analyse their market and establish an effective strategy for targeting prospective clients
The objective of any piece of marketing – whether that be pricing, selling, promotion, distribution, market research, or customer care – is to establish and deliver upon the needs of the customer. Successful marketing is not an easy thing to achieve, but getting it right should be a core priority for any business hoping to have any kind of success.
Here we look at how to understand your market and your marketing objectives, plan your marketing strategy and assess the success of your approach.
What should my marketing objectives be?
Your marketing should always be aiming to satisfy at least one of these four objectives.
First of you should aim to retain customers as selling to existing customers is usually cheaper and easier than selling to potential new ones. Effective marketing should reduce the need to spend heavily on promotion to attract new customers – your marketing should target people with a similar customer profile to your existing customers.
The last two objectives should be to increase the size of purchases and the range of purchases made. Fewer larger orders are more profitable to you than a greater number of orders of equivalent value. Your marketing can have an impact on getting people to buy more and encourage customers to purchase a wider range of items from you.
How can I achieve an understanding of the market?
A good understanding of the market is essential if you want to establish what segments to target and how to go about targeting them. First of take an overview of the market and establish the size of the market, and whether it is growing or expanding. Identify any key observable trends.
Next up is to categorise potential customers. Establish the kinds of people who use your products, and sort them into categories – this can help you spot opportunities for targeting certain market segments with certain products or deals.
Finally investigate purchasing channels and profile your competition. How do your customers purchase your product? Are there any alternative channels to reaching them? What are your competitors doing differently and why do their customers value them over you?
Carry out a SWOT analysis
This is a review of your strengths, weaknesses, opportunities and threats, and it can give you a good idea of your position in relation to your target markets and to your competitors.
Start of by ranking and scoring your critical success factors. These are the factors upon which the fate of your business hangs – they might include price, product range, product performance, customer service, costs, and so on. Score them out of ten and rank them in order of their importance.
After this compare your scores and rankings with competitors. By listing the scores in a table, you should be able to measure your relative strengths and weaknesses. Finally review the organisations that affect you, and the business environment as a whole. See if you can spot any threats to your business or opportunities for growth.
For more information on how to carry out a SWOT analysis for your small business, check out our guide here.
Conduct a marketing audit
A marketing audit should consolidate the key information to understanding the market, your position, and the effectiveness of the marketing you have carried out so far. Use your understanding of the market and combine this with a ranking of your customers, products and a review of your marketing initiatives.
Place customers in ascending order of importance for your business, with those who account for the largest amount of profit and sales at the top, and rank your products in ascending order of profitability, with the most profitable at the top. Take overhead costs into account – they may be less profitable than you think.
Marketing initiatives are mostly measurable (see below), use them to find out what worked and what didn’t.
How do I plan and create my marketing strategy and action plan?
You should build your marketing strategy in steps. Begin by deciding which market segments/customers to target and don’t move into new segments unless your position in your existing ones is secure.
After this look at how to adjust your product range. Most products have a life cycle, and must be updated to remain profitable. Consider what aspects you can change – the size, the packaging, the promoted usages – to keep existing products selling, and consider what new products you could introduce. Following this, decide the price of each product, how to distribute each product, how to promote each product (consider every available option – PR, e-advertising, direct mail, etc.) and how to sell each product.
After you have you selling, price and target market decide upon, look at how to improve customer service. The quality of service has a huge impact on customer retention. Finally look at how you will meet the orders (you might need to extend your production capacity to meet new demand) and how to measure the effectiveness of your marketing. New strategies should be tested on a small scale to begin with.
The marketing action plan
After your strategy should come your action plan – your allocation of resources needed to execute your plan.
You should aim to be visible and to remind your customers of your business as often as possible – your plan should include a calendar prompting you to contact customers on a regular basis and more important customers might merit regular face-to-face meetings or phone calls.
Also make sure to know customers’ purchasing cycles. Find out when their budgets are, and what time of year they usually buy and schedule your annual promotions. Dictate who is responsible for organising and delivering these.
How do I forecast sales and profits?
Your sales and profit forecasts should reflect both your current financial position and your business aspirations. They should be updated on a monthly basis.
Step one should be to draw up a budget for the year. State what sales and profits you’re aiming for based on the last years’ figures, and taking into account changes in the market and the impact of your marketing.
Make sure to focus on your main customers, surveying the sales you expect to make to them will give you a good indication of your overall sales performance. also ensure that you understand your business’ drivers, establish what specific aspects (i.e. number of leads, morale of staff) drive the performance of your business – these will differ from organisation to organisation.
Finally make three forecasts. One should be based on your most pessimistic predictions, another you’re most optimistic ones, and one should be as realistic as possible. Plan how you will handle each scenario.
Check out our guide to monitoring your business for more advice on business drivers and performance indicators.
How do I measure the success of my marketing?
You should monitor the progress made by each of your salespeople and in each product area on a monthly basis. Compare this progress to your current targets and objectives, and adjust your marketing strategy accordingly.
Start by using a sales enquiry form and record how people reach your business, then calculate marketing conversion rates by tracking and comparing the number of leads to the number of orders made. Contrast the average cost of acquiring a new customer against the revenue taken from sales, and factor in the expected revenue you will earn over the customer’s lifetime.
After this survey your customer acquisition rates as this will help you to find out for what reasons any lost customers have stopped ordering, and calculate the average value of a transaction, and the total number made. Try to focus on pursuing the more profitable business areas – large, high-margin, repeat orders. As always make sure to take external factors into account throughout your analysis.
Though it can be time consuming, having a well throughout marketing plan in place will enable you spot what marketing techniques are worth investing in, help you to identify your firm’s strengths and weaknesses, and recognise potential revenue streams to target.
For more help on researching your market, check out startups.co.uk free research tool here – which enables you to reach their network of four million for feedback.