If sales is the lifeblood of every company, then marketing is the heart that keeps a steady flow going so that we don’t run out. Unfortunately, many small business owners discredit the value of marketing and see it as either an unnecessary expense or something for the bigger guys. This couldn’t be further from the truth, and this short-sightedness could certainly be a key contributing factor explaining why 50% of all businesses fail within their first 5 years. Fortunately, we have a simple approach to marketing to meet any company’s budget, no matter the size…
“Failing to plan is planning to fail!” These wise words are often attributed to Benjamin Franklin. Whether he was the first to speak them or not, he most often gets the credit as this adage continues to pass along through different management generations.
A marketing plan does not have to be an elaborate, multipage tome with chapters and subsections. On the contrary, the simpler the better. After all, to quote yet another genius from American history, “If you can’t explain it simply, you don’t understand it well enough.” – Albert Einstein. Below, we outline a simple 4-step process using a farming analogy for creating and executing a marketing plan that leads to more sales:
Strategy – Your marketing strategy begins with an analysis of your target market. We encourage the creation of “personas”, which clearly identify and personify groups or individuals that would be interested in your product or service. We also take some time to understand your growth goals. Whether you’re interested in market penetration, breaking into new markets, developing new products / services, or both, clearly defining your intended destination will help map out an appropriate path. From there, we determine the appropriate messaging that will support your growth goals and be received by the target market. Finally, we determine the appropriate marketing channels to effectively reach our target market.
Planting – The first step of our farming analogy, the goal of the planting step is to create awareness among your target market. Reaching out to new potential customers and planting them in your lead capture system, as a farmer would sow seeds in a field.
Nurturing – Next, we want to nurture your leads. Just as a farmer would feed and water the planted seed to encourage and support growth, so too savvy marketers will nurture their leads with useful content that speaks to the needs of the target market. The goal here is to help leads gain a better understanding of the benefits your product or service has to offer and to stimulate interest in and manage the perception they have of your company so that you are considered the first choice when they are ready to buy.
Harvesting – In the final step of our farming analogy, just as a farmer reaps the fruits of his labor during the harvest season, so too will you reap the benefits of your marketing efforts. This is where we transition from marketing to sales, and qualified leads are converted into paying customers. You will want to pay very close attention to your lead conversion ratio, since this key performance indicator (KPI) is a direct measure of the effectiveness of your marketing efforts. It is up to your operations function to ensure you deliver a high-quality experience and on time to ensure customer satisfaction for both repeat business and referrals.
Follow this simple process to create and execute your marketing plan to earn more sales. Yet, one more quote, “…it takes money to make money…”
Setting a Marketing Budget
You’ve laid out a perfect plan then realize that this is going to take work! Resources – time and money that are often both in limited supply to the small business owner. What to do? The first step is to determine an appropriate budget for the size of your organization. There are a variety of ways people use, however we find it best yet again to keep it simple. Organizations with less than $5M in revenue (which is most small businesses we work with) will typically allocate 7-8% of their revenues back into marketing. For example, if you have $10K in monthly revenues, you would allocate $700-$800 per month for marketing. Consequently, this is a fair minimum goal that a sole proprietor should target for a 1-person shop. Scaling up with employees should follow with increasing revenues and increasing marketing budgets to ensure a self-sustaining business. Once you determine an appropriate marketing budget for your business, you can now go back to your plan and refine it based on the funds you have available.
Another consideration is who will perform the work? The sole proprietor could do the work for themselves, but that would take away time from the revenue generating work they need to do. They could hire someone, but $700-$800 per month will not sustain a full-time person, and there aren’t many folks out there in this job market who wouldn’t pass for a full-time position. Fortunately, there are firms like Business Improvement Group that have professional full-time marketing specialists on staff that can be hired to suit any marketing budget, for example:
$700-$800 / mo. – Weekly blog writing and social media sharing
$800-$1000 / mo. – Weekly blog writing and social media management
$1000 – $1200 / mo. – Weekly blog writing, social media management, and monthly long form content
> $1200 / mo. – Customized marketing services above aforementioned services
To the savvy business owner, this will not be viewed as a cost, but as an investment. As such, key performance indicators should also be established to ensure that you are getting appropriate return on your investment. Monitoring individual campaign performance and making adjustments for subsequent campaigns takes advantage of the continuous improvement cycle to ensure maximum gains out of your marketing efforts.
So now you know what to do, the next step is to do it! Be sure to check out our website and past blogs for helpful tips on creating and refining your plan (yes, you can refine your plan!). Follow our blogs for more helpful tips to consider as your company grows. And as always, feel free to reach out if you have any questions along the way!