Studies conducted by Bloomberg and Forbes suggest that approximately 80 percent of new businesses fail within 18 months of being founded. While there are many reasons why these dreams come crashing to the ground, revenues earned versus expenses paid out is certainly near the top, and marketing is among those expenses. In fact, the U.S. Small Business Administration recommends that 7 to 8 percent of your gross revenue be spent on marketing and advertising assuming your business is doing less than $5 million a year in sales and your net profit margin (after expenses) is between 10 and 12 percent.
The way you market your business will help sink it or make it soar. Your approach to marketing is the difference between those two options.
When a doctor performs scheduled surgery, you don’t expect him to meet you for the first time in the operating room, learn about your problem then announce “Ok, let’s get started!” Thought needs to go in to every successful plan and marketing is no exception. If you consider the variety and volume of marketing channels available today, especially on the digital side, you could easily get overwhelmed. To avoid that feeling and to have an unbiased understanding whether your marketing choices worked or not, Strategic America would like to remind SMBs to ask yourself a few important questions (as outlined in a program developed by Mirren):
1. What is your objective? In the simplest of terms, identify clearly what singular action you want to achieve through your marketing plan; if there is more than one, itemize them separately. Do you want to…
a. Sell more product (if so, which one and how many?)
b. Cross-sell services?
c. Increase customer loyalty?
d. Develop referrals?
2. What KPIs will you use to gauge success? Determine your key performance indicators PRIOR to starting the campaign; this allows you to disconnect emotion from facts about the end results.
3. What is your customer’s path to purchase? Understanding what events lead a person to buy your type of product or service will help you know what marketing channels to use during the various stages of a buying process (awareness – consideration – intent – decision).
4. What is your budget? While you don’t need to be exact, you should have an idea of how much you can dedicate toward your marketing and understand what an acceptable cost per lead (CPL) and cost per sale/acquisition (CPA). Knowing this will allow you to narrow the list of viable marketing options or campaign durations.
5. Which tactics should you consider? Do not force fit a solution into your marketing plan that does not meet the criteria you have objectively established. Consider a mixture of traditional and digital marketing tactics, each of which should be tracked independently.
6. Place, measure, refine, repeat. Marketing is not an exact science, it requires constant testing and evaluating. Whatever you decide to include in your media mix, make sure you measure it properly, analyze the results and adjust your program accordingly. Then start all over again!
Small business owners wear many hats and undertaking this new approach to marketing may seem daunting. My suggestion is to take baby-steps toward a complete marketing overhaul using these questions as your guide. Start with just one ingredient of your marketing plan (i.e. direct mail, SEM, radio, etc.) and walk through the process. Once done, move on to the next components of your plan. In time, you will have completed the entire plan and then have benchmarks in place each fiscal year.
If you need help shifting gears toward this way of thinking about your marketing plan, SA is available to talk; contact us today and remember the old Chinese proverb – “A journey of a thousand miles begins with a single step.”