CHAPTER FIVE

Design a Great
Marketing Plan

“The power which resides in [man] is new in nature,
and none but he knows what that is which he can do,
nor does he know until he has tried.”

—RALPH WALDO EMERSON

“The purpose of a business is to create and keep a customer,” Peter Drucker famously said, “Therefore the basic management functions are innovation and marketing, because only they are capable of generating sales, revenue, and cash flow.“

Marketing is the art and science of customer engagement. It’s about determining what your current and future customers perceive that they really want, need, can use, and afford—and then helping them get it by creating and structuring your products and services in a way that delights customers and motivates them to embrace your mission as their own.

If you take the time to think through the answers to the questions in this chapter, you will sharpen your marketing skills, attract more customers, and make more sales.

The Big Question(s)

The following interrogative paragraph encompasses the key questions that you must consider and answer accurately, and explore again and again as market conditions change:

What exactly is going to be sold, and to whom is it going to be sold, and by whom is it going to be sold, and how is it going to be sold, and how is it going to be paid for, and how is the product or service to be produced, delivered to the customer, and serviced after the sale to ensure repeat business?

Most ideas for new product marketing fail because one of these questions was not adequately or accurately answered.

Four Key Strategic Issues for Your Marketing Plan

There are four key strategic questions that you must consider as frequently as possible, to test every product or service idea:

1. Is there really a market? Are there people who will actually buy your product or service? There may be a good reason why other companies aren’t making this product available. To discover the answer, great companies try several variations of the product side by side and see which works best for customers. They test various price points and many different types of packaging and product names for the new item.

The only real test is a market test. Only live customers can tell you if you have a winner or not. Get a prototype, a model, or a written description or picture, and test the new product or service in the marketplace. Offer it, sell it, or give it away to customers and see how they respond.

Whatever you do, aim for immediate feedback. Don’t be shy. Get responses from those you will expect to buy the product or service as soon as it is available. In most cases, your initial product or service idea is deficient in some way. But by changing it in response to customer comments or complaints, you may develop a product or a service that becomes a market leader.

Also, always assume that a competitor is rushing to bring a similar product or service to the market. Develop a bias for action. Avoid paralysis by analysis. Instill a sense of urgency at all times.

2. Is the market big enough to make it worthwhile pursuing? There may be a market, but is the market large enough to justify all the time, trouble, effort, and expense necessary to develop the product or service and bring it to market? Can you sell enough of your product or service to make it economically worthwhile? There are many products or services for which there is a definite market, but the market is too small to make it worth pursuing. Market research in this area can be invaluable in helping you to make the right decision.

3. Is your market concentrated enough? Assuming that there is demand for your product, and the demand is large enough, do the means of advertising and promoting the product exist that would enable you to sell to that market in a cost-effective way?

In his book The Long Tail: Why the Future of Business Is Selling Less of More, Chris Anderson argues that when the major competitors fight over selling the most popular books and movies, the profit margins for those few big “hits” get slammed. Blockbuster movies and books tend to get deeply discounted in price by big retailers and flame out in popularity quickly. In contrast, specialized products have a “long tail”—they stay popular in smaller quantities and are sold at higher margins by more specialized retailers. Instead of going after the obvious blockbusters, Anderson advises savvy marketers can go after narrower, more specialized segments of customer groups all over the world.

Online services make accessibility to these unique customers easier and cheaper than ever. At the same time, however, the lower costs of entry also mean that more retailers are competing for the attention of consumers in every aspect of electronic commerce and making it harder to cash in on the long tail.

4. Who is your competition for the same customer dollar? We are always skeptical when entrepreneurs believe they have no competition. In meetings with venture capitalists, it is remarkable how many times you’ll hear entrepreneurs say that their product or service idea is so unique and original that they have an unlimited market. It might be true that there is no competition for your product—because there is no real market!

Even if your product isn’t out there (yet), there will always be competition for the customer’s dollar. That’s how you should think about it. Remember, the overwhelming majority of new product or service offerings fail because there is no market, or the market is not large enough, or the market is not concentrated enough to be reached in a cost-effective manner, or your competitor’s offerings are superior to yours in some way.

We are not saying you should avoid inventing something entirely new. You just have to be sure consumers think it’s better. That’s when new markets are created and existing ones become vulnerable.

Five Attributes of Marketable Products and Services

1. Your product is easier to use and more convenient than competitive products. Many products and services do not sell because it is simply too difficult for people to buy them or to use them. People are busy and distracted. Convenience is important to them. Amazon has grown from the largest bookstore (both online and on-land) to one of the largest retailers in the world because it continues to be one of the easiest places to buy an incredible assortment of things that people want. Amazon invented one-click shopping—that is, the ability for consumers to buy many different products from one website with just one click. You can find products and buy them without worry 24/7, and get free shipping and guaranteed returns.

How can you make your products or services easier to use, hassle free, and more enjoyable than your competitor’s products? One innovation in this area can give you an advantage over your competitors.

2. Your product provides additional benefits and quality at the same (or comparable) price as your competitors. These additional features or benefits can make your product more useful to the customer or easier to use. Your products may even be higher priced, but people are willing to pay for quality, or a special experience, if it reduces the amount of downtime associated with a lower quality product or service.

Charles Schwab rarely charges the lowest prices even among discount brokers, and instead emphasizes high-touch and high-tech service. Wal-Mart and Home Depot are not necessarily the absolute cheapest in your neighborhood, but they have built their reputations as a good value based on their relatively low prices, wide product selection and helpful service.

There has always been a cheaper place to buy a cup of java than Starbucks, Tully’s, and Peet’s coffeehouses. But they make the experience so much more enjoyable that customers eagerly pay more than they would elsewhere. In addition to coffee, the ambiance at places like Starbucks is conducive to hanging out and drinking more java, and bringing more friends and business associates particularly now that there is free wifi available to connect to online services. Even with countless coffee shops in the world, no one had successfully created a single brand that provided a predictable, consistent customer experience until Starbucks came along.

3. Your service is cheaper than competitive products. By using more efficient manufacturing methods, leveraging economies of scale, outsourcing to lower cost locations around the world, finding better distribution channels, or stripping down the product to its essentials, you can lower the price for a product that is clearly in demand.

The challenge you face with a strategy that is based on price alone is that often some tough competitor is willing to charge less than you do, particularly if that competitor is desperate for market share. At the end of the day, your product or service has to add more value to the customer even for low-price marketing to work over the long term.

4. Your brand inspires deeper trust than your competitors. Customers measure the quality of their experience with you against many metrics, but in particular they will compare what you provide with what image they have in their heads about your brand reputation. A brand is another way of defining your “reputation” with your customers. For this reason, it takes a long time to build a brand. It cannot be created with a couple of expensive Super Bowl ads, like the dot-com companies attempted to do in the 1990s. It takes many years for a business (or an individual, for that matter) to develop a reputation, and it can quite quickly be tarnished.

Your brand is not something that can be allowed to develop accidentally. It must be developed by design, carefully and purposefully, in everything you do and in every customer interaction.

Define your brand clearly: What is your brand today? Explore your brand from several perspectives: What words do your customers use to describe your business to noncustomers? What words would it be helpful or useful for people to use when they talk about your company or your products/services? What could you do, every day, to ensure that when people think about you, the most positive words and images come instantly to mind? What are the promises that you make when you ask a customer to trust you and to buy your products and services? What are the promises that you keep after a customer has bought from you? Especially, do you treat your customers so well that they gladly and willingly recommend you to others?

5. Your product appeals to your customers’ desires better than existing products available. That is, it appeals to the customer’s need more effectively than anything else. Very few consumers would have thought to ask for, or could have even imagined, a world with mobile phones, e-mail, instant messaging, or Google before they were invented. But each of these new products tapped vast existing markets when they arrived. They scratch our itch for immediate gratification, easy access, and communication. They give us a greater sense of community with like-minded peers with whom we want to connect.

That’s why online media, games, and mobile devices continue to steal huge shares of viewers from traditional television markets. We are inherently social creatures. We love entertainment that’s interactive. Personal communication tools touch a nerve so deep they’ve become indispensable.

Why People Buy

People buy products and services to satisfy needs or desires, to relieve a “felt dissatisfaction.” People buy products or services to improve their conditions in some way, to achieve a state of greater satisfaction or recognition than they would have enjoyed without the product or service.

People buy benefits, not products. What specific benefits do your products or services offer your customers?

People buy solutions to their problems. What problems do your products or services solve for your customers?

People buy to save money or time, or to gain money, time, or recognition. How does your product or service increase the amount of time, money, or influence for your customers?

People buy the feeling they anticipate enjoying as a result of owning or using your product or service. What emotions does your product or service satisfy for your customers? How will they feel when they use and enjoy your product or service? Does it give them a greater sense of status, safety, or well-being?

The basic motivations for purchasing anything are desire for gain or fear of loss. How does your product or service appeal to these needs? The more basic the need (e.g., food, water, security, health), the more simple and direct the marketing approach. When you are driving along the highway, you may see a sign that says HUNGRY? FOOD AHEAD. This is a simple appeal to a basic need. The more indirect the need (e.g., perfume, jewelry, cosmetics), the more subtle the marketing approach has to be. One of the most successful perfume ads was for Chanel No. 5. Catherine Deneuve smiled from the billboard and simply said, “Chanel No. 5. You’re worth it.” This simple appeal to a subtle emotional need made Chanel No. 5 one of the most popular perfumes in the world.

People buy a sense of belonging. They want to be a part of a community where they are recognized and can feel they can have impact. Perhaps the biggest breakthrough in marketing strategy in the early twenty-first century is the understanding that communities of customers can take a major role in contributing to your marketing plan (and product innovation) based on their ability to participate and share their knowledge and interest in your product or service with other customers.

User Generated Content

Think about it: The “content” that attracts viewers to Google’s paid advertising is contributed by the billions of websites generated by the customer. Google serves up ads just in time as customers are searching to find what they want. Services like Facebook are taking this trend to a new level by vastly expanding the consumer’s ability to socialize with other consumers. Users have created a half billion pages, and more than 200 million people log in every day to Facebook to send messages and create clubs with similar buying interests.

This online community of customers contributes content and, in effect, these users are actively marketing these social media services in the most powerful and “viral” way any consumer can: through personal referrals. They are signing up their colleagues and friends by the millions.

Marketing in the New Millennium

This trend is so powerful that many companies are outsourcing a substantial and increasing proportion of their marketing budget and innovation to communities of customers. Take Netflix, a mail-order and online video service that’s cutting deeply into the market share of more traditional players in the video rental industry. Netflix has distributed 2.5 billion DVDs and video streams since its launch just ten years ago. CEO Reed Hastings created the Netflix Prize, a $1 million award to anyone who could improve Netflix’s ability to make new movie recommendations to customers by 10 percent. Just as Amazon, the online bookstore, is famous for automatically recommending to you another similar book or another similar product every time you buy something, Netflix wants to increase its volume of business by doing a better job of predicting which movies that you would love to rent or buy based on your past selections. Giving customers great recommendations builds loyalty and boosts Netflix sales revenues.

The Nextflix Prize competition generated millions of dollars in publicity and attracted more than 50,000 participants who scrambled for nearly three years to find a solution. Making smart recommendations is core to Netflix’s service to customers. By engaging customers in its research and development efforts, Netflix improved its product in a way that buyers loved. At the same time, the company turned thousands of buyers and potential customers into enthusiastic volunteers for its marketing and sales strategy.

How Are You Turning Customers into Evangelists?

How can you encourage your customers to participate and contribute more to your company’s marketing and product development? How can you provide a place for your customers to talk with each other and share ideas and enthusiasm and challenges in your market?

Marketing is about understanding your customers with such depth and clarity that you can empower and encourage them to be evangelists for your cause or company. When you walk into an Apple store, it is often hard to tell who’s doing the sales and marketing and who are the biggest fans of the product: the customers or the staff? If they didn’t wear Apple T-shirts, you wouldn’t know. The company has hired evangelists—people who are crazy about Apple’s products—to work in its retail stores.

Great marketing and great communities of interest turn passive onlookers into active customers and contributors to your product. One the world’s “50 Most Innovative Companies” according to Fast Company magazine is PatientsLikeMe.com, an online community in which patients share experiences about thousands of medical treatments and procedures. It is a place to compare notes, recommend ideas, second-guess products, and get advice and share concerns about treatments with other patients. The community itself is a content and marketing machine that gets the word out to potential customers all over the world.

Unilever makes Dove soap, but it also engages in community building that helps the company market Dove brand products and add value for customers at the same time. Dove makes heroes of its buyers by featuring their ideas about health and skin care. Physicians, dermatologists, supermodels, and ordinary consumers volunteer to pitch their best beauty secrets in public forums that, in turn, influence other buyers.

Equally important, all this conversation with potential customers about potential products provides a living lab for testing Dove product and service ideas and creating entirely new lines of products. It helps the company better understand whether there actually is a market for specific products, and if so, which customers are the right fit for that product.

The Customer Is Always Right

The starting point of successful marketing is to remember that customers are always right, even when those customers may not be right for your business. Customers have a right to their opinion. They buy for their reasons, not yours. They vote with their wallet. Customers may appear demanding, ruthless, disloyal, and fickle, but they are always doing what they believe is in the interest of their goals and dreams.

They will change suppliers whenever they perceive that they can be better served elsewhere. Your ability to appeal to their real desires and to satisfy their wants and needs, as they perceive them, determines your success in business.

The Wrong Customers

Best Buy discovered to its horror that its massive advertising campaigns for ultra-low-priced products succeeded in attracting tens of thousands of customers. What’s wrong with that? Millions of dollars and many years later, the company realized that, in some cases, too much of the added traffic in the stores was from customers who bought only those deeply discounted special items and not much else. Looking hard at the data, Best Buy found that some “teaser” sales lost money for the company, and some customers had a penchant for returning items (which created an expensive product restocking exercise).

“One of the oldest myths in business is that every customer is a valuable customer. Even in the age of high-tech data collection, many businesses don’t realize that some of their customers are deeply unprofitable, and that simply doing business with them is costing them money,” wrote Columbia University professor Larry Selden and Fortune magazine editor Geoffrey Colvin in Angel Customers and Demon Customers. Selden helped Best Buy and other major firms scrub their client data to find that “it’s typical that the top 20 percent of customers are generating almost all the profit while the bottom 20 percent are actually destroying value.”

Why Do Customers Buy Somewhere Else?

Competitive analysis is the starting point of differentiating your product or service from all others.

Who or what is your competition? Put another way, who else do your prospective customers buy from rather than you?

What value do these customers perceive that causes them to buy from others and not from you? How can you neutralize this perceived advantage? How can you change your offerings in such a way that your potential customers prefer your offerings to those of others?

Why would or should your ideal prospects switch to your product or service? (If you cannot answer this question in twenty-five words or less, your marketing strategy is probably in serious trouble.)

What are your critical assumptions about your competition? Errant assumptions are at the root of most marketing failures. Could your assumptions about your competition be wrong? If they were wrong, what would you have to change or do differently?

Learn from Your Competitors

One of the best marketing strategies for you to follow is to admire and respect your successful competitors. What are your competitors doing right? Look up to them and try to learn from them. Remember, they have made an enormous number of mistakes and learned a lot to achieve their current position of market success.

One of the biggest mistakes a company can make is to criticize or denigrate its successful competitors. When a company does this, it blocks off all possibility of learning from its competitors and eventually learning how to outdo those competitors in some way. Instead, make a habit of looking up to your successful competitors and respecting what they have done to achieve success. In this way, you will begin to see opportunities to develop superiority to them in tough markets.

Sam Walton was famous for visiting his competitors and making notes and taking photographs of successful retailing ideas. In the early days of Wal-Mart, Walton would drive overnight and sleep in his pickup truck in the parking lot of a rival department store that was apparently doing good business. When the store opened, he would go in and walk the aisles, looking for ideas that he could then take back to Bentonville, Arkansas, and use in his own store. This willingness to learn from his successful competitors enabled him to spearhead the building of the most successful retail company in history.

Four Keys to Strategic Marketing

The application of four strategic principles to your business—specialization, differentiation, segmentation, and concentration—determines your success or failure.

Specialization

The company must clearly specialize in its product or service offering, providing a clear, specific benefit to a particular customer. In each case, the successful company stays within its area of specialization and strives to find more customers who want, need, and will pay for what it specializes in bringing to the market. The company can:

Specialize in serving a specific type of customer. In the beginning, Wal-Mart defined its customer as “the person who lives from paycheck to paycheck.” Everything Wal-Mart did was aimed at taking excellent care of that customer. By specializing in a particular type of customer, Wal-Mart became the most successful retail operation in the world.

Specialize in servicing a particular geographical market. Convenience stores focus on a particular neighborhood, as do small stores with one location. Some companies focus on a single city or state; others focus on global or overseas markets.

Specialize in providing a particular product category. Tiffany & Co. sells jewelry and luxury products that appeal to wealthy customers. McDonald’s only sells foods that can be produced and sold at low prices to a mass market; it has created a system that specializes in offering value, cleanliness, convenience, a low price, and a taste that is consistent with customers’ expectations every time.

Specialize in providing a particular service. This is true for accounting firms, psychologists, massage therapists, and hairdressers. The company may specialize in a particular technology, such as computers and computer services, music and musical instruments, chemistry and chemical formulations.

“Build your niche. Ask yourself what you are interested in and then really work at creating that niche for yourself,” advises business strategist Joe Scarlett, former Chairman, Tractor Supply Company, and founder of The Scarlett Leadership Institute at Belmont University. Ernst & Young honored Scarlett as the Southeast’s Entrepreneur of the Year and Forbes selected Tractor Supply Company as one of the “Best Managed Companies in America.”

“For example, Tractor Supply Company concentrated on the large-scale farming industry, but when I realized that ‘hobby farming’ was growing substantially in the market, I made it my mission to be TSC’s go-to person for hobby farming. So pinpoint your niche and reap the rewards when you commit to building it,” he insists.

Differentiation

The purpose of marketing is to communicate how your product or service is different. All of business strategy is ultimately marketing strategy, and all of marketing strategy is ultimately differentiation, the process of showing your prospective customer why your product or service is a better choice than anything else available.

Business success is determined by your competitive advantage. This is something that you do or offer that makes your product or service superior to your competition in one or more ways. Peter Drucker said that “if you don’t have competitive advantage, you must develop it, or get out of the market.” What is your competitive advantage?

What is it that you do or offer that makes your product or service better than what is offered by any other business?

What is it today? What will it be tomorrow in light of current market trends? What should it be if you want it to increase your sales and profitability? What could it be if you were to change your offerings in some way?

Why does your ideal customer buy your product or service? What value does the customer seek? What does the customer want more than anything else from the purchase of your product or service?

How is your ideal customer going to use your product or service to enhance the quality of his life or work?

To achieve lasting success in a competitive market, you need a “unique selling proposition.” Your product or service must have at least one benefit that makes it clearly superior in terms of satisfying customer needs and that no other competitor offers. Put another way, every product, service, and company must have a clear and established area of excellence.

The identification and development of your competitive advantage and your unique selling proposition becomes the central focus of all your marketing and advertising methods. In every piece of promotion you emphasize and reemphasize the one thing you do or offer that no one else can offer.

Segmentation

Today, all marketing is segmentation. It is finding and focusing on just those specific customers who can and will buy from you the soonest and the most often and will pay the prices you charge.

Your job is to identify the exact type of customer who can most benefit from the superior features of your product or service. This person becomes your target market.

Here are some questions that you must ask and answer to accurately identify your most profitable market segment:

Who exactly is your customer? What is the customer’s age? Education level? Income? What are the customer’s tastes, attitudes, and interests? Each customer has demographic characteristics (i.e., those factors that you can visibly identify, like age and gender), as well as psychographic characteristics (i.e., the fears, hopes, dreams, desires, and attitudes that largely determine buying behavior). You must be clear about your customer in both of these areas.

One important psychographic quality that you must identify is the single most influential fear that would cause a qualified prospect to hold back from buying your product or service. Prospective customers almost always have a fear of some kind. Your ability to identify this fear and facilitate a solution in the course of your marketing can transform your marketing results in a very positive way.

Where is your ideal customer? Geographically, you can identify customers by zip code, residence, place of work, and/or place of purchase. You also want to know your customers’ place or position in their organization.

What is your ideal customer’s buying strategy? How does the customer purchase your product or service? What is the sales process? Retail? Mail order? Online? Direct selling? Door-to-door? Newspaper? Telemarketing? Each customer has a buying strategy, which refers to the way that customer goes about making the purchase of a particular product or service, including the one you sell. For example, car purchasers visit an average of ten dealerships, narrow it down to three, and then buy from one. Women who shop for clothes usually visit three different stores before they make a final choice. Because people are creatures of habit, it is difficult to get them to buy using a different strategy than they are accustomed to.

What is the ideal marketing channel through which you can sell your product or service to the ideal customer? What marketing channel is your target market accustomed to using to purchase a product or service from others?

Concentration

Your company must focus time, attention, and money on selling more of its products and services to its very best potential customers. The 80/20 rule applies to customer concentration. A good rule of thumb is that 20 percent or less of your customers will account for 80 percent of your sales volume. Twenty percent of your customers will account for 80 percent of company profitability.

In concentrating, the company focuses its best people and resources on selling its best products and services to its best prospective customers. All advertising and promotion is focused and concentrated on those customers who can buy the most and contribute the greatest revenues to the company.

The Seven P’s of the Marketing Mix

There are seven different areas of consideration that determine all marketing success. A change in any one of these seven areas can change your sales results dramatically.

1. Product. What is your product or service exactly, in terms of what it does to improve the life or work of your customer? The fact is that nobody cares what your product or service “is.” They only care what it “does,” or how it helps them do something. Define the ultimate result, benefit, or change in the life or work of your customer that your product or service will bring about.

2. Price. Is the price you are charging today reasonable, competitive, and profitable in today’s market, based on today’s market conditions? Pricing is a very sensitive issue. Small changes in your prices can lead to dramatic changes in your results. Sometimes, your prices are too high relative to your competition. You have no choice but to lower them if you want to stay in business. Many companies have found that by increasing their prices for their most desirable products by 10 percent, they lose a small number of their customers but gain tremendously in bottom-line profits.

You must also think of single pricing, volume pricing, discount pricing, variable pricing, up-selling, cross-selling, and down-selling. In a turbulent market, you must continually revisit your prices to make sure that they are properly calibrated to generate the maximum flow of sales and profitability.

3. Promotion. What are all the different ways that you advertise and sell your product in your market? Are there different ways that you could promote your product or service in different markets with different advertising media or different people?

There are more than twenty different ways to sell a product or a service. Most companies settle for one or two methods and pay little attention to the others. Sometimes you can dramatically increase your sales by offering your products or services through a different marketing or distribution channel.

Small changes in your advertising can lead to dramatic changes in the number of people who respond to it. The simple change of a headline or a tagline in an advertisement, in print or on the Internet, can increase response rates by two or three times. Never be satisfied with your advertising until you have more customers than you can service.

Your sales process is vitally important. Many companies have successful advertising that generates customer interest, but because their salespeople are not properly trained or managed, they are unable to convert those interested prospects into paying customers. Sometimes, a small change in your sales methodology can lead to dramatic changes in your sales.

4. Place. Where exactly do you sell your products and services? Are there other places where you could offer your products or services for sale?

Many companies go from direct selling to Internet sales to retail sales. Many companies in retail are offering complete online sales services. Companies are forming joint ventures and strategic alliances with companies whose customers are ideal for what they sell, then offering their joint venture partners access to their existing customers. Both business partners benefit from capitalizing on the credibility and established relationships of each other.

5. Positioning. This is one of the most important factors in marketing success. How are your business and your products/services thought about in the hearts and minds of your customers? What words do people use to describe your company and what you sell?

Imagine that you could wave a magic wand and choose the exact words that customers would think when your company is mentioned by name. What words would it be helpful for your existing customers to use to describe you to other prospective customers? What could you do, starting today, to leave the impression you desire in the minds of the customers that you most want to influence?

Remember, your reputation—the way you are known to your customers—is the most valuable asset you have. You must decide how you want customers to think about you before and after they have done business with you, and then make sure that every customer interaction reinforces that word or message.

6. Packaging. How does your product or service look on the outside? Is there some way that you could change the way your product or service is packaged to make it appear more attractive and desirable to more of your ideal customers?

Customers are extremely visual. Unless the product has been tried before by the customer or is recommended by a trusted source, the only way the buyer can choose your product is based on its packaging. Does the name, the text, and the appearance match the customer’s expectations or desires? By improving the visual aspect of your packaging, you can make your product look more valuable and desirable than your competitors’ products.

In addition, the appearance of your physical facilities is essential in building credibility and buyer confidence. Make sure that every element that prospective customers see sends the message of quality and value, and builds trust and confidence.

7. People. This may be the single most important part of the marketing mix. Who is going to carry out each part of your marketing strategy? Do your people present the ideal image of your company and your products and services?

Customer-Focused Marketing

Everything counts. Every customer contact is either building or destroying future business. Every customer contact is either increasing your credibility or decreasing it. Every customer contact either helps or hurts. In today’s incredibly competitive markets, you must treat every customer as though she was one of the most important people in the world. Every person who deals with customers must have this attitude. You want customers to walk away from your business feeling happy inside and saying, “That is a great company!”

Successful marketing places the customer at the center of all planning and decision making. It is essential that you stay close to your customers, whatever your position. Continual personal contact and market research are essential to ongoing customer satisfaction. How much time do you spend talking with your customers each day and each week?

Profit from Your Core Competencies

Marketing success comes when you profit from your core business. Start with your core competencies. These are the special skills that you and your company possess that enable you to produce excellent products and services and to survive and thrive in your marketplace. A major mistake that companies make is that they deviate from their core competencies and begin getting into areas where they do not excel. Remember, the market only pays excellent rewards for excellent products and services.

What are your core products or services? These are the products or services for which you are known. These are the products or services that you produce and deliver in a way that is superior to any of your competition. These are the foundation products or services of your business. It is absolutely essential that you are clear about these core products or services and that you continually improve in both producing and marketing them.

What are your core markets? What customers do you tend to satisfy the most, and the most easily? Whatever your answers, you need to continually focus on these core markets because you are more likely to make more profit in these markets than anywhere else.

What are your core advertising methods? These are the advertising methods that get you the highest number of qualified leads per dollar of expenditure. This is where you need to focus your advertising dollars.

What are your core selling methods? These are the methods that bring you the most sales in the shortest period of time. It is essential that you continue to improve your core selling methods and processes.

Who are your core people? These are the most important people, both inside and outside of your business, for marketing and sales success. It is absolutely essential that you continue to appreciate and reward these people. They are the heart of your business.

Bundle of Resources

Look upon your company as a bundle of resources with the capacity to produce a variety of products and services and to sell them to a variety of customers in a variety of markets. You are not limited to your current product or service offerings. You can always develop or produce something else. Answer these questions:

1. How could you sell more of your existing products or services in your existing markets?

2. What new products or services could you produce with your existing resources, including your people and skill sets, equipment, and financial structure?

3. What new markets could you find or develop for your existing products or services?

4. What additional products or services could you sell via your existing distribution channels? Remember, distribution channels are often more important than products. Distribution channels exist and endure long after products and services have become obsolete and have left the market. Very often, it is a good strategy to design products and services that fit existing distribution channels rather than the other way around.

5. What additional distribution channels could you develop for your existing products or services?

6. Finally, what new products or services could you sell through new distribution channels?

Answering any one of these questions precisely and creatively can change the entire direction of your business.

Focus on Customer Creation

The purpose of marketing is to make selling unnecessary. Although this seldom happens, the aim of the entire marketing effort is to present such an overwhelming case to your customers that they simply buy as the result of your marketing and promotional efforts. The more dynamic and creative the marketing function in a company, the more sales you can expect and the higher the level of profitability in the organization.

A great marketing plan is one that attracts a steady stream of qualified prospects who want, need, can afford, and will pay for what you sell now or in the future. “No matter how small or large your company, don’t compromise on going through the effort to create your marketing plan and think it through carefully, even if it’s just a few pages,” says business adviser Julie Woods-Moss, former President of British Telecom’s Strategy & Marketing. “If you can’t be clear about your value proposition, no one else can!”

In short, a good marketing plan works. It presents the right appeal to the right prospective customers in the right way to cause them to respond. Your advertising triggers the reaction “That’s for me!” as soon as a prospective customer sees your product or reads your marketing message.

Good Advertising

Good advertising causes a prospective customer to say, “I want that!”

Herbalife, a multibillion-dollar diet and nutrition company, has its distributors wear a round button with a blinking red light that captures attention. On the button are the words LOSE WEIGHT NOW. ASK ME HOW.

For a qualified prospect, one who is overweight and concerned about that condition, this is the perfect advertising message. It simultaneously triggers the responses “That’s for me!” and “I want that!”

Good advertising emphasizes the unique selling proposition of the product or service that you offer. It attracts prospects and customers at a low cost of acquisition. It illustrates the clear competitive advantage that your product or service has in comparison with those offered by competing businesses.

If your advertising is good, it should be clear to a ten-year-old why a qualified prospect would want to buy and use your product or service. It cannot be fuzzy or unclear. It must cut straight to the heart of the most pressing need that a prospect would have that would cause him to reach out for what you are selling.

Measure Your Results

The only way to determine whether a particular advertising approach is working is to try it out, again and again. The three most important words in advertising are “test, test, test.”

In advertising, you can change one variable at a time and compare the results with your previous version. Sometimes, you can change more than one variable. Whether it’s Procter & Gamble or BestBuy.com, marketers are constantly testing A and B versions of the same promotions to see what works best in attracting prospective customers. Ultimately, the only question that matters is, Does it work?

Customers have more important things to do than pay attention to your advertising. When they do, they are disengaged, suspicious, skeptical, cautious, and careful. To get them to buy from you the first time is both an art and a science. The benefit you offer must be so attractive that people are willing to give it a try. Then you must make it a “no-brainer,” a low-risk, no-risk proposal. Offer a free trial and a money-back guarantee. These techniques are as old as business itself—because they work.

The way you can tell what’s working is by measuring lead generation costs. One of the most important numbers in any business is the cost of customer acquisition, and lead generation is a major component of that cost. The only way that you can accurately measure the effectiveness of your marketing efforts is the number of qualified leads generated each time your advertising appears in the media. You then measure and compare the cost paid for each lead generated.

Risk-Reversal Marketing

To sell more of your product or service, you need to understand your potential customer’s biggest fear about doing business with you, and then shift that risk to yourself. This is called risk-reversal marketing. The key to the success of this method is that your additional bottom-line income will be greater than the increased liability.

Risk-reversal marketing turned a little company called Shoes for Crews into a $100 million industry player. The company makes work boots that are often standard-issue uniform items for many jobs. The good news is that employers can deduct the cost of the work shoes directly from workers’ paychecks. The bad news is that employees can also buy those boots anywhere else. How could entrepreneur Matthew Smith find a way to make customers care about his high-quality shoes in a commodity market for work boots?

Smith had an epiphany. Employers worried about workers compensation claims when employees were hurt on the job. So Smith guaranteed that workers would not slip in his shoes—and he’d pay the claim if they did. He offered a $500 warranty on a $50 product! Then he gradually increased the warranty to $5,000. It was a smashing success. More than 90 percent of the biggest restaurant chains recommend the Shoes for Crews brand for their workers.

What about claims? Shoes for Crews pays hundreds of claims every year, but it adds up to less than one or two percent of sales.

Customers are downright shocked at the outrageous offer, and Smith wins lifelong customers. Combining this sweeping guarantee with quality products and excellent customer service continually causes people to say, “This is a great place to shop.”

See Yourself as a Partner

Marketing and advertising ultimately are about credibility and accountability. Think of yourself as your customer’s business partner. You are already investing time and resources in your customer every day. Now take it a step further. Imagine that you have put money directly into your customer’s business, as if you were a venture capitalist. How would you behave then? You would want the customer to be successful at a whole new level. You would want them to grow and prosper for the long term.

Jordan Zimmerman, founder of an ad agency that bears his name, has billings of over $2.6 billion. He calls every client every single day and monitors their business as if he were an owner.

The executives who manage each customer account plan their day around their client’s sales data from the day before. “We study the data from every store every single business day,” he said. When you call your customer every day, you can’t help but be held accountable for their success and challenges. “If something works, we know it. If it isn’t, we can try something new instantly. We act quickly and work to grow the business 24/7.” Zimmerman Advertising behaves like a member of the client’s operating management and, as a result, most of the brands he represents have prospered even in difficult market environments.

“I love advertising and marketing, but more important, I’m a partner looking out for my customer’s success every day,” Zimmerman said. In business, that’s when you become indispensable.

Do the same in your own business. Carefully monitor and control your marketing efforts and always be willing to change them if you and your customers are not getting the best results. Your job is to make your customers more successful and to exceed their expectations every business day.