SUCCESSFUL MARKETING

Successful marketing comes from having both an attractive offering and an effective sales effort. This is because people will buy a package they believe gives them the right value proposition (the ‘offering’) comprising the right product, with the right quality/benefits package, at the right price, place and time. They know about the package and it is this knowledge that convinces them to buy (‘sales’).

Having worked through your strategy, you should be well on your way to having a compelling offering. This chapter, therefore, is about the marketing of that offering and about effective selling.

THE IMPORTANCE OF MARKETING

Small businesses can suffer from some or all of four classic marketing problems:

• 1.Failure to put together a clear USP (unique selling proposition) based on a sustainable competitive advantage and with a value chain to back it up.
• 2.Failure to put together a marketing plan, particularly in a business set up by people who are good at ‘doing something’.
• 3.A ‘feast/famine’ sales programme, when sales effort falls away as people obtain business and where there should be a programme to build an ongoing ‘sales machine’.
• 4.Poor control of a salesforce.

To achieve significant growth, your business cannot simply rely on business coming to you. You will have to go out actively to seek it in order to gain market size and share. To do so, you need to draw up a marketing plan covering:

• to whom you are going to sell;
• how you are going to sell, the marketing mix (the four Ps of price, product, promotion, place – and a sales plan); and
• your management of the salesforce.

DECIDING WHOM TO SELL TO

To plan your marketing approach (what you are going to say and where and how you are going to say it), you need to identify whom you are going to sell to. There are many ways to ‘segment’ your market to identify customer profiles. For consumer markets the four main variables are as follows:

• 1.Geographic:
• 2.Psychographic:
• 3.Demographic:
• 4.Behavioural:

If your market is working-class men in Scotland and you advertise only in glossy women’s magazines in Kent, your marketing is poorly targeted. For industrial purchasers, geographic and behavioural segmentation also applies, together with other variables, such as:

• Purchasing approach, degree of centralisation, membership of purchasing ring, price/quality/service focus.
• Attitude to risk.
• Seasonality, urgency, size of order, distress purchase.

In addition to making your selling effort effective, segmentation can enable you to identify new market opportunities by highlighting particular segments into which different products can be sold:

• Horizontal segmentation – providing different versions of products that suit the different needs of each segment (from the CL version widget to the GSXI turbo RS competitor special widget).
• Vertical segmentation – providing the same product at different prices/levels for each segment.

Example

When buying transatlantic airline tickets, customer preferences for comfort and price cluster into two areas, allowing two classes of services to be offered on the same plane (see Figure 31).

By identifying and understanding your customers better, you can also tailor your marketing message so it is likely to be more effective.

Customers behave differently depending on how much variety there is on offer and how important choice is to them. This can help you in planning your message to them (see Figure 32).

HOW TO SELL YOUR PRODUCT

Your customers do not just buy a ‘product’; they are actually buying a whole package of tangible and intangible products and services (see Figure 33).

In order to sell efficiently, you need to:

• tailor your marketing to your customers (using the four Ps of marketing);
• manage the sales process; and
• manage your salesforce.

TAILORING MARKETING STRATEGY: THE FOUR Ps OF MARKETING

There are four main areas under your control where you can make changes to your marketing strategy:

• 1.Price:

• Price:

• 2.Product:

• 2.Product:

• 3.Promotion:

• Promotion:

• 4.Place:

• Place:

Your approach to these is known as your marketing mix. What is your strategy/policy in respect of each of the above points for your product? How does your approach compare to those of your competitors? Is it well suited to your target market? What changes can you make (try a pilot scheme first) which might increase profits through the net effect on sales (e.g. quantity discounts)?

MANAGING THE SALES PROCESS

Small businesses will often suffer from ‘feast and famine’ marketing where, as work comes in, the effort on marketing ceases, only to pick up again when work dries up. If you suffer from this, you need to work to smooth out this fluctuation by putting a structured sales process in place. To generate sales on a regular basis, you need to have a sales machine in action day in/day out based on the sales funnel principle (see Figure 34).

Example

On a monthly basis:

• 1,000 mailshots produce . . .
• 25 enquiries, which produce . . .
• 10 sales meetings, which produce . . .
• 5 quotes, which produce . . .
• 2 sales.

At an average sales value of, say, £2,500, this funnel leads to £5,000 turnover per month.

This approach allows you not only to have a regular flow of sales but also to manage the process. For example, if you wanted to increase monthly sales by £10,000 to £15,000, you could either:

• send out an extra 2,000 mailshots each month and resource sales staff to follow up 50 more enquiries and attend 20 more sales meetings; or
• look to increase the efficiency of the existing process. For example, if following up mailshots with telephone calls can increase the leads/enquiries from the existing response rate of 0.5% to 7.5%, and the remaining statistics stay the same, you can achieve the required increase with no increase in mailshots.

MANAGING THE SALES FORCE

If you have a salesforce, you must ensure you make the best use of it. Use the following checklist to help you.

KEY POINTS

• Work out your personal goals.
• Use the following formula for business success (after Duggan, Porter and Kay) to set your strategy:

• Build your business to deliver this formula.
• Keep refreshing it.
• Manage your marketing and sales effort to make your customers aware of your excellent offering.