Are you getting a great bang for your buck? This Little Piggy Went to Market

 “Marketing is the process of communicating the value of a product or service to customers, for the purpose of selling that product or service. “ Wikipedia

 

I like to summarise marketing into these key roles:

 

  • Market analysis – size and quality
  • Awareness
  • Image – Promise
  • Optimising distribution channels
  • Reinforcement

 

Market Analysis

 

  • What market niche does your product/ service best support, in terms of jobs to be done?
  • What unmet needs will your value proposition exploit?
  • How big is the pond? Will your efforts reach enough buyers who can afford what you offer, to generate the income you want?
  • What share of that pond can you realistically expect to own?
  • What’s the optimum selling price (and therefore profit) you can expect to obtain?
  • Is your market niche expanding or declining?

 

The army has a saying that “Time spent on reconnaissance is seldom wasted,” and that applies to your market analysis. Your research and analysis will help convert your marketing campaign from an ineffective shotgun blast into a marksman’s rifle bullet.

 

Awareness

 

You’ve selected the perfect product – fast food for a hungry crowd, you’ve positioned yourself right in the path of people who need it, but you’re not getting any business! Why? You’re invisible, Heidi is not aware of you because your product is inside an unlabelled box of a building.  Nobody knows what’s inside. So helping  Heidi be aware of what you offer to help her get her job done (satisfy her hunger) is a critical role in your business.

 

If you don’t tell Heidi and her friends what you’ve got then you won’t have enough regular or new customers and you’ll fail.

 

But you don’t just want to tell Heidi you sell fast food, you want her to be aware that this is YOUR delicious, nutritious, convenient nourishment and it’s just what is right for her, right now.  Building brand recognition is your goal in awareness, so your logo and name become synonymous with her achieving her required outcomes, perfectly.

 

Marketing tools for building awareness include:

 

  • Your USP. Can you convince Heidi and the rest of the customer jury beyond reasonable doubt of the compelling reasons to buy from you? All in one short sentence? FedEx did it: “When it absolutely, positively has to get there overnight.” Domino Pizzas did it: …“Fresh, hot pizza delivered to your door in 30 minutes or less…guaranteed.”
  • Signage, Advertising (print, radio, cable, out-of-home), In-store merchandising, Online advertising.
  • Your website, SEO/SEM, Email newsletters, Social media such as chat, Twitter or LinkedIn, Direct mail such as postcards or letters.
  • Public relations releases and blogs.
  • Marketing materials – (business cards, flyers or brochures.
  • Promotions, trade shows, events.

 

Image – Promise

 

How much does image matter to profitability? It’s an emotion-driven perception, isn’t it, but with significant material results.

 

  • Attractive men and women attract 10% higher salaries.
  • Women who wear glamorous makeup are judged to be more competent and attractive than women without makeup.
  • Men significantly over average weight and women under average weight can earn almost double the salaries of their opposites.
    (Source: American Psychological Association, Smart Money, Princeton University)
  • Attractive people are usually hired sooner, get promotions more quickly.
  • Attractive people tend to bring in more money for their companies and are therefore seen as more valuable employees and harder workers.
  • Images of attractive people are used in advertising for a compelling reason – it works.

 

So it makes sense that by creating an attractive image for your business you can not only attract more business but also set higher prices than your not so particular competition.

 

Your brand image isn’t solely defined by your marketing. It’s the total impression in Heidi’s’ mind of your brand’s total personality, composed of real and imaginary qualities and shortcomings. It is the net effect of your Brand Promise versus your Brand Delivery.

 

Optimising Distribution Channels

 

What ways can we get our wonderful fast food product to Heidi?  Define the best ways to get both your message (awareness and image)  as well as your product/service to her.

 

You can put a retail outlet right in front of her face, or sell through a wholesaler or agent.  You can sell online with direct delivery. Use your own website, and you can use other outlets such as eBay, Facebook, and Twitter. You can take your service to her or bring her to your service.

 

Reinforcement

 

Once Heidi has bought from you the first time then, you want to reinforce what a wise decision she made. The better you help reinforce that feeling the more likely she will return, and the more likely she will positively refer you to her friends.

 

You are concerned here with her lifetime value to your business, knowing that if you lose her it will cost you 6-9 times to replace her with a new customer compared with the cost to hang onto her.

 

Generating leads and referrals and their management are the marketing roles in this area.

 

Marketing Investment

 

Your marketing costs include Setup Costs and ongoing Promotion Costs.

 

If you have limited time and money (and what small business has otherwise?) then you would want to focus on awareness of image to start.

 

For ongoing budgets, the general rule of thumb for a small business is to allocate around 8 percent of your net sales (revenue) to marketing.

 

But when you first start you may need to double or even triple that to get over the tipping point of awareness – the question to ask is what share of the market do you want after the first year, and so what size budget do you need to achieve that.

 

Some key points about investment:

 

  • Marketing is a long-term investment, often taking months or years to build your brand. So be prepared to hang in there.
  • You are aiming to build a rep as the specialist, the thought leader in your field or niche. That will keep people engaged much more than continually flogging features or benefits alone.
  • You are aiming to attract repeat customers because Lifetime Value is what you need to focus on. If a customer hires your product/service 3 times a year, over five years, that is 15 times the value of that initial sale. Add all the referrals that person can generate for you means you can probably double that value.

 

Measuring Marketing Performance

Every marketing campaign has a long-term and short-term benefit. So you need to measure both. So many businesses expect to have an immediate impact on their first promotion; when that doesn’t happen they don’t persevere but change to something else. That’s a waste of your initial investment.

 

Your measurement of sales is at least as much about customers gained as it is about the dollars of profit on the immediate sale, because of the Lifetime Value. And if you consider the total value of that customer then you can probably also see you can afford to invest a lot more to attract her.

 

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