One of the most influential thinkers and writers on the subject of management theory and practice, American Peter Drucker, once said that “great business is made up of only marketing and innovation”. However, many SME’s, see marketing as no more than an add-on function that can be dropped when things aren’t going so well.
The extent to which marketing is misunderstood and undervalued by the manufacturing and industrial sectors is demonstrated by the fact that many, if not most, small businesses, combine the roles of marketing and sales in the shape of a Sales & Marketing Manager/Director; A position which is in fact at odds with itself.
The marketing function, if done correctly, is to focus the business on meeting the needs of its target customers, on the other hand, sales are trying to get the customer to match the product they are selling. Put another way, sales does one function within the business, whereas marketing should have an influence on every area.
· Developing the products that solves customers problems
· Ensuring the correct pricing strategy is adopted
· Making sure the products are readily where and when customers want them
· Establishing a customer support service before, during and after sales
· Promoting the product in a way that convinces the customer that it is not only the preferred choice, but is in fact, the only choice.
The first four bullets above come under what is known as ‘Upstream Marketing’, a process which asks fundamental questions of a business. Which markets does the business want to work in, how much of those markets are available to us, which products does the market need, what features, price, experience etc. and what will give us a competitive edge? The questions that make the difference between success and failure or at least mediocrity.
As we emerge from recession there is a case for saying that competitive advantage should be the main topic of conversation in any boardroom and giving marketing its key role is the way to make this happen.
But what about resources? How much should you invest in marketing?
Please note that I say marketing not advertising
As a percentage of revenue, recent surveys suggest that packaged goods spend between 4% - 10%, retail 2% - 5%, car manufacturers 2% - 3.5% and professional services at the top with at least 15%. In comparison, many SME’s spend barely 1%. This lack of investment kills any chance of creating that all important competitive edge.
The question SME owners will ask is “what will be my return on investment”? That of course depends on the strength of your commitment. However, a better question would be; In five years’ time, where will you be in relation to the competition if you continue to treat marketing as an add-on that can be dropped whenever costs need cutting?
David Hassell DLH Marketing
All great achievements require time. So wrote the American poet Maya Angelou and you would find it hard to argue with her. Think about anything worth doing and it usually involves planning and time. It could be that you want to make your own cider for the summer, well unless you planted the tree several years ago I’m afraid you’re stuffed!
Marketing is just the same. If you’re suddenly thinking about a marketing campaign because sales have taken a dip, or customer satisfaction is falling then I hope you like surprises because who knows what you’ll get.
Effective marketing can require up to 8 months from the start of a consistent campaign before you start to see real results that turn into potential business. So, if business is good now it’s probably a good time to start marketing. If business isn’t so good don’t worry, as another old proverb says, It’s better late than never.
Are you struggling to find your ideal customer?
To begin with, particularly if you are a start-up or small business, you need to consider who your ideal customer is.
I wonder how many of you created a Buyer Profile before you started trading? A profile that looked at demographics, the key problems encountered and identifiers that make your ideal customer look at your product or service.
Once that’s done you need to think how to can reach them and more buyers like them.
This is an area where many businesses fall down. I have worked with so many organisations who make assumptions about where to find these buyers but that’s what they are, assumptions. You must take the time and do the research that will confirm or deny their accuracy.
If you want to reach your ideal customer you need to know where they spend their time, both real and virtual.
Are they reading industry blogs or news sites, is it the type of industry that likes printed material or digital, are they likely to read newsletters , or do they attend networking groups, trade shows or local association meetings?
To find out, survey your current and past clients, don’t be afraid to ask them – it shows that getting it right is important to you.
Hopefully, you will see a pattern emerge with several of your best clients giving the same responses. You can use this to help get your message right where it needs to be.
It doesn’t matter how strong your USP is or how powerful your value proposition, if the message isn’t reaching the right people your whistling in the wind.
Take some time and think about:
Have you surveyed your current and past clients to create a Buyer Profile?
Do you know if your marketing is being seen by your ideal clients?
If you’re looking for help to get this done give me a call or email.
You have spent time, energy and resources to win a new customer, now you have to manage them.
The process from lead to winning the customer will have involved a group of people responsible for budgets, influencing and decision making. It’s highly likely that now a new group of characters will emerge, these may include production control, cost centre managers and product/service users.
Not having been involved in the negotiations, this new group will include people who know very little about your company, product or service benefits and will need educating. There will, therefore, be a need for relationship building activities to be developed if you are to secure customer loyalty and retention.
Many organisations see this ongoing management as a responsibility of the sales team but is this really the best use of their talents?
The goal of sales is to increase customer revenue. If they are split between revenue building and customer loyalty building you will be losing on both counts. By using marketing to develop a communication programme that delivers relevant, value based messages to the various individuals you will increase retention. Loyalty is a very personal emotion and the key motive of this strategy is to communicate and create the feeling of a real reationship with your company and not with a sales person who may leave over time.
You gain in two key areas. Your sales team are free to develop new opportunities both within the customer organisation and outside and you benefit from increased customer satisfaction. Not only are customer staff receiving relevant information but those who don’t need to are not being required to see sales people unless they wish to.
How often do you buy from yourself?
twice a year, once a year or never? I suspect that for many small business owners the answer would be never. Let’s face it, you are probably too busy keeping things afloat and moving in the right direction. Besides, everyone knows what they are doing – don’t they?
The experience your customer gets during the whole purchasing process will determine whether they finally make that purchase or, even more importantly, decide to come back in future. You can make as many assumptions as you like about how your customers are handled but unless you experience it yourself or through an independent ‘secret customer’ that’s all they are, assumptions. You can never know whether the processes you have in place are actually working or not.
David has worked in advertising and marketing services for 30 years both client and agency side. Having worked with local, national and muliti-national clients, he set up DLH Marketing to help small organisations, owner managed businesses and those organisations without in-house marketing.