Wednesday, August 12, 2009

Advice to new marketers: Do sales

Take a sales job once in your career. What you'll learn will make you a better marketer.

Nothing bits being bitten by a customer who has no interest in your product, till you teach them otherwise of course.

You can easily tell those who've done it vs. those who didn't. one group is more real, more in touch with what the customer wants and how to get it to them. The other generally speaks in tool language (social marketing, campaign, ROI, blah, blah, blah.)

No matter what you believe marketing does: No sales, no business, no marketing.

If you're not helping sales today, review what you're in the job for.

Monday, July 13, 2009

Only three ways to grow business

There are only three way you can grow your business...that's it.

I didn't come-up with that, Jay Abraham did. And it changed the way I looked at marketing, sales and even business development (now if only someone could truly explain why they are different : )

They are:

1. Increase your customers
2. Increase repeat sales
3. Increase sales transaction price

Now all you need to do is test your marketing strategy and tactics against these three objectives. If they don't help you, they're useless.

Sounds easy?

It's not.

First you'll have to fight preconceived ideas about marketing. Yours and those of others. And such ideas are hard to get rid of. We fight to keep them especially if our future is at stake.

Second, they require discipline beyond what you're experiencing today. Good marketing is a day to day effort and can often be seen in the smallest things, not just the big posters.

Third, you need technology to know and understand your customers at that level. And many marketers are risk averse when it comes to this even though they'll be the first to talk about the latest online social tool.

Let's face it: No sales, no business.

Sunday, June 28, 2009

Software is dead. Long live software

The demise of software, a marketing tactic launched by software companies (hence the irony) doesn’t change the fact that everything around us is powered by it. It’s in consumer products, notebooks, coffee machines, toys, it helps run business operations in major companies, etc. Consumer software, business software, embedded software, you name it. It’s everywhere.

In the past ten years, software companies had to evolve and adapt to conditions that even they didn’t foresee. The increasing number of programmers around the world and the democratisation of software tools and production, coupled with the ‘save the world from ourselves’ attitude of this new generation, has lead to the apparition of free and cheap software. This change is seen today as a precondition to the development of the third world as to many companies in the first and second.

This wasn’t part of the plan. Software was supposed to be a high-margin business.

You can’t call software cheap yet, especially in business-to-business but it has certainly come down. If you add the huge discounts such companies give to buy markets or meet prospects budget limitations, then we’ve entered a new era that might lead to the commoditisation of software. No one wants to go there however. Software is intellectual property at its best. Companies employ the best and the brightest to create, market and sell it at the highest premium the customer can afford. In balance, customers are doing the same to ensure they’re not taken for a ride. If you want to see market forces at work, enter a room where software pricing is being negotiated.

Software is further evolving. Not due to business planning but because our interaction with it has changed dramatically. We have to thank the gaming community for that.

Software so far has been very two-dimensional. Colours of course have made it easier to use than thirty years ago when green screens were the rage. We can shift screens and hyperlink to other part of the network and the world in a heartbeat yet that screen is still very linear and limited in space. This forces programmers to cramp a lot of data in a single and often small screen space.

Today’s new generation X and Y are used to higher level of interactivity, multi-dimensional access and a 3D environment they epxerience while playing games. Those expectations have started to transpire in our day-to-day software but are still far from being completely merged. Though the day you’ll interact with your word processor in the same way as you interact with a game will soon be upon us. Or not.

This is the beauty of the software industry. It’s constantly changing and trends and expectations, especially historical one, mean very little. You simply can’t project software into the future based on its past. It’s entirely depends on human ingenuity. An infinite force if there is one.
Today, there are signs of things to come.

In the consumer world, we see embedded software in items that have a single purpose as well as the notebook or PDA, that more and more people carry around. The former is hard coded in the machine you’re using whether to build something or simply programme cooking time. The latter still allows you to add and delete software at will depending on your current needs. Your needs change, your software change. You could also say that the software you use helps define your personality. Or is it the other way around? Am sure psychologists will figure that one out.

Software is a beautiful thing. There is beauty in its creation and beauty in its utilisation. It helps define a more homogenous society by keeping it moving (think traffic lights) while allowing it to be at its most creative. Such forces can of course both for good or evil but software is not dead. It’s just beginning.

Friday, May 29, 2009

Simple Marketing Plan

1. Target identification (the more details, demo, psycho, behavior, etc., the better)
2. Message: What do you say to them? Just a list of services you offer or something more targetted?
3. Objectives: Are you trying to gain new customers? Increase the sales transaction at the point of sale? Develop repeat business?
4. Strategy: What will you do to get and retain them? Direct or indirect reach?
5. Tactics: Which tools do they respond too? Is Social Marketing, though cool, the right approach? 
6. Budget: How much can you afford/invest in reaching them?
7. Schedule: How often should you talk to them? Should you be proactive? reactive?

Wednesday, April 29, 2009

Should you Take Care of your Customers?

Sometimes it feels like business would be so much better without customers.  We could go about our internal meetings without problems, set-up strategies that we like and understand, decide where the  funds should go…life would be so easy…no customers, no cry (to paraphrase a famous song). Of course, this scenario conveniently forgets that it is the customer who pays our bills. 
There is no doubt that the customer should be at the centre of every business strategy and yet, it often feels like focusing on them comes as an afterthought, a single paragraph in a business plan, nothing more (the famous “Them” and “Us” strategy.) 
Let’s face it, while the title of this article would make any marketer cringe, it is still common practice to make decisions without the customer in mind…and remain successful (but for how long?) 
Thinking about the customer is not a natural function for many businesses. Even many marketing departments avoid it, despite the fact that their very reason for being is to understand their customer. After all, isn’t marketing’s favourite discussion about how well they understand the customer, often better than anyone else in the company?  
Unfortunately, even the relationship between ‘marketers’ and customers is being eroded and in today’s fragmented business place, customer interaction and customer treatment is often managed by a branch manager, a Customer Relationship Manager, a Customer Relationship Management (CRM) solution or even a web site or call system. If you critically analyse many businesses, you will find that many marketing decisions simply have little impact on customers. 
Remember the 4Ps?  
There was a time when marketing was defined by the 4Ps (Price, Place, Product and Promotion.) In Asia, very few marketers really manage them all as they are either decided in headquarters or by someone with no direct marketing responsibility. 
The 4Ps are gone 
The complexities of delivery, promoting to the right people, business in general, have shown over and over again that businesses must strive to understand their customer beyond products and demographics, beyond the marketing department. 
Interestingly, most of us as consumers have experienced instances that suggest many companies simply do not care much about us. And yet we seldom take this learning back to our own businesses. 
There is an old proverb that states, “If you cannot smile, do not open a shop.” This simple admonition should be enough to decide if you have what it takes to take care of customers days-in, days-out. After all, customers are becoming more and more sophisticated, more and more aware and more and more involved with the brands they choose (and therefore less and less involved with the brands they do not choose.) 

The practice of taking care of your customers revolves primarily around three main actors on the business stage: the customer, the marketer and the business owner. There are, of course, many other stakeholders but it is these three that drive the business. 
The case of the “sophisticated” customer 
“We all are customers” should be the new mantra. But are we all good customers? 
It is obvious to state that customers around the world have become more sophisticated. Today they have the power to compare price, buy abroad, buy directly or online, travel more and shop more. Even more importantly, they know they can complain to the right person (often with less effort than going through ‘customer service’.) 
This sophistication is at a cross-roads however. Today, the customer can no longer assume that companies will try to get his business. Let’s face it, we should hardly expect corporations to treat us well if we are not ready to commit, if we are not ready to be involved in their success.  
This could mean focusing on one brand per category, for example, in return for which we could rightly expect to be recognized as a “good” customer. We must face the fact that corporations are becoming Masters at recognizing that not all customers are created equal.  
When you are bombarded with irrelevant offers and other marketing messages, deciding to be a good customer is a Life strategy. If you don’t, your life could become more and more difficult to manage. 
We have the right to select one brand and ask to be treated correctly. We have the right to put all our accounts into one bank and then ask to be treated well…if we don’t, then we have nothing much to ask in return for our lack of commitment. 
Marketing Tip: Understanding that the customer is as sophisticated as he or she wants to be (no more, no less) could reduce the numerous marketing mistakes we make by trying to be too clever, too cute or to humorous 
The case of the “sophisticated” marketer 
At the same time as customers were becoming more sophisticated, so were marketers – helped in no small part by the advent of the Internet. 
Marketing as a discipline has changed in the past 100 years, and not always for the better. Reading some of the older marketing texts from 60+ ago, it seems that they might have been more in touch with customers then that today. It also seems that they knew better their role in the growth of the business. 
Today’s marketer is often so sophisticated than he or she has lost touch with customers. Hidden behind research numbers and focus groups, the marketer often has a warped view of what the customer true behaviour really is. Analytics based on behaviour is very much in vogue and is an attempt to regain that lost knowledge.  
While thankfully not all marketers are so remote, we all should be careful of the “ivory tower” syndrome and ensure that we and our team get down in the trenches where customers are voting with their credit card. 
Marketing Tip: Keeping an open mind and constantly ask the right questions (like how can I help sales?) The consumer is the only one who can say if a marketing campaign works, everything else is an opinion. 
The case of the “sophisticated” business owner 
Last but not least, the role of the business owner in serving the customer cannot be ignored. While not always in their midst, his or her beliefs and business philosophy will determine whether a company becomes customer centric or not. The danger is, once again, to be too remote. Never treat customers as numbers - or even worse, as financial numbers. It is that simple. If the business leader is not customer centric, no amount of internal training or strategy will make the company focus on the customer. 
From experience, it looks like the way people are paid has a direct effect on the company’s customer strategy. If sales people, for example, are paid to bring in business but not nurture the relationship,  then customer will not get much post-sales service. In all fairness, that’s not their role is this example. Can you imagine, however, a customer who only sees a sales person when they want something? What are the mid and long term implications? Would this impact the overall company’s brand? You bet it would, and most probably negatively. 
Marketing Tip: If you are a marketer and your most difficult customer is the General Manager, change job. You want to work for someone who will use all the best tools available to succeed, including  marketing 

Becoming a customer centric organization is no longer a strategic question, it’s a necessity. You have to become one. If you don’t your competition will and your customers will follow them. And while you can use all the technology you need to enable your business to be customer centric, if your business philosophy focuses on something else, you will never achieve that goal. 
- The customer should be at the centre of every business strategy (easier said than done but not impossible) 
- The 4Ps are gone, move on 
- Customers are “sophisticated” (and we are all customers) 
- Marketers are “sophisticated” (sometime too much for our own good. Let’s refocus on helping sales) 
- If the company owner does not believe in marketing, you might be fighting a loosing battle 
- And don’t forget, your sales force focuses on what they get paid for, NOTHING else 

Sunday, March 29, 2009

Branding across borders: Reaching the global marketplace

Since man started trading, we have searched to reduce the world around us to make it more manageable. It’s not its size of course, but our perception as to what we can sell and buy as the main aspect of globalization is economic (without forgetting cultural as both are closely linked.)  Globalisation has sped-up in the past 100 years with the double advent of flight and the Internet creating an even smaller world where any item, luxury or otherwise, is available to any metropolis dweller. Globalisation, whether desired or not, is a constant and its impact on your marketing can be dramatic.

Whether you’re working with your own brand or representing a foreign one, let’s explore the different issues a luxury good company faces while developing its brand across borders.

Segmentation to save your life

Most luxury item are designed for the connoisseur, the High Net Worth Individual (HNWI)…or so we think. The past twenty years have seen the democratization of the term luxury where what was once the domain of the rich and super-rich is now been bought by the masses. The main difference is in the frequency of purchase however. While a HNWI would not wink while buying a new Rolex every 3 months, most will consider it a lifetime investment or a least one made for a really special occasion.

The past twenty years have changed your segmentation and if you add other demographics changes, changes in behavior, changes in media availability, etc. you end-up with thousands of mini-target segments (not quite reaching the level of 1to 1 marketing however.) These niches are your new segments and you need to analyse them (look to your sales forces as they know most of them) and develop the messages and campaigns to reach them.  

One point to note, using behaviour rather than demographics to define these segments is the way to go. Such segments are not easily recognizable but respond better to your marketing than more pervasive segments. It is today, the best way to develop a global strategy.

Message: Can you say the same thing to everyone?

By using behaviour as your segmentation strategy, you will be able to develop the right global message for the right niche. And whether you use emotional or mechanical triggers (see a Breguet ad vs. a Breitling or Blancpain) that are needed to sell a luxury product, they would work in the same way regardless of nationality or creed. Patek Philippe‘s current legacy ad strategy appeals to the same basic human need that we all feel but presents it in the context of an heirloom, a behavioral value that an HNWI would recognise faster than others (check the pictures and you’ll see what I mean.) So the question you must ask is simple: Does your message convey the behavioral value that your target segment will recognize and act on?

Take the youth market as another example. Luxury jewelry is not often seen as their realm. Step into Tiffany or Cartier and you’ll see different people with one common denominator: Age (I did not say old, but definitely above twenty.) In the case of Tiffany, the central message is clear and almost everyone will recognise the little turquoise box. Such distinctive featuer is what you’re looking for when deciding on your message (in this case, you could say the box is the message.)

Measuring Return Across the Globe

The next step in your strategy is to develop your objective. No objective, no results. Your objective has to be measurable, not just a bland statement of what you want to do but a clear summary of the metrics that will allow to define whether your marketing campaign is successful or not.

Marketing ROI is still in its infancy but if you develop your direct marketing knowledge, you’ll get a glimpse as to how you can measure all sorts of marketing medium. In today’s world, even HNWI respond to different medium in a different way and If you target the young HNWI, then you’ll end-up with marketing tools that are very close to any other tools the youth are using around the world (handphone, online, etc.)

The simple step you can implement is to treat every marketing activity, local or global, as a campaign. The campaign becomes your unit of measurement. And even if some of your campaigns go across multiple borders or several months, their business effectiveness have to be measured against simpler campaigns. Who knows, the simpler campaigns could reach your target better and more cost effectively than more complex ones. Balanced with the long term effect of branding, your selection of the best return will help you realise measurable benefits from your marketing.

Strategy & Tactics

There are many strategies to reach your target market globally and behaviour will once more show you what works and what doesn’t work, regardless of location. At the core, you need to decide whether you want to use a pure-brand strategy vs. a pure sales-strategy. This selection will clearly depend on what you believe "Brand" means.

A pure-brand strategy is almost equivalent to the old pull strategy where you send your message to the public and pull them into your shops. It still has its value and the amount of luxury good advertising you see today is a proof of that. It’s main role however is to create the right emotion with a certain amount of hope that the customer will finally act and buy the watch or jewel you’re promoting.

A pure-sales strategy is a lot more focused on pushing to the public what you want to sell. The campaigns are almost direct-response like and every single activity is tracked for results and dumped if proven to not work. There is a connection between the day of the ad and the day-sales. The content is less emotional and a lot more short term.

We can’t argue that a brand has to create an emotion to reach its target and be remembered. We further can’t argue that you should focus more of your efforts in measurable marketing. Like always, the truth lies in between but there are two secrets that both strategies use to succeed: Reach and Frequency.

The first secret is quite clear: If you don’t reach the right people, you won’t get the benefits. It couldn’t be simpler but if you check the amount of marketing which is reaching you while you live your life, you’d be amazed how much of it is wasted. There is so much of it, It looks like marketers do not seem to know how to segment properly. This couldn’t be further from the truth. The best marketers are expert at segmentation and if you think that the Mont Blanc or Faberge add in your life-style magazine is wasted on you, I would say two things: One, you’re not the target market but another reader is and two, you might eventually become the target market if you have the right characteristics (and that’s add will count as one in the frequency of advertising that lead you to buying that item.) The latter being the second secret: Frequency.

Depending on who you believe, you need a frequency of three, seven or eleven before your ad is even noticed. That’s a sizeable investment just to be noticed but thanks to the breakdown of media in the past decade, each impact doesn’t have to be just done through advertising. You can leverage multiple points of impact either in a very short period or spread over several weeks to reach the desired effect. The factor that joins these two together and makes them powerful has already been mentioned: Measurement.

The attraction of global marketing is a powerful one. The idea that there can be more and more prospects beyond your shore is very attractive but, and there is a but, while many of your customers will be the same around the world, only their behaviour will truly tell. Once you know and understand what drives them, your marketing strategy will be more effective. You simply can’t escape it. Knowing your customers is the simple and first focus that you should have when venturing globally.

Saturday, February 28, 2009

Celebrity is as Celebrity does…but would you buy what they wear?

To state that celebrities influence our lives is understating the role they actually play.

Celebrities are a symptom of our deep interest in other peoples lives and they life they live is often, but not always a tad more fun that the one we live. We are social animals, we are interested in others and we often claim it openly by what we wear, drive, read or even eat.

This interest has increased in the past few years as the number of celebrities has increased as well as the coverage about them and today you can’t open a magazine or watch TV without noticing the number of celebrities that leverage their names to push a product into our lives. This is an important angle to this economic activity, celebrities do not always wear or use what they promote, that’s more into the realm or public relations where the media catch one of them actually carrying a brand we recognise. Celebrity advertising is an economic activity, they were paid for it (celebrities truly know the meaning of multiple streams of income.) We know that and we still buy the products because of the association that they claim to have. This is the realm of celebrity-association marketing, and that realm is not far, far away. It’s ever present and increasing in reach…everyday.

Blurry origins to clear-cut marketing strategy

Can we identify the beginning of celebrity marketing? Probably not. It’s as remote as time itself. Once, pharaohs, kings and queens, wore jewelry or clothes that were quickly copied by savvy merchants and promoted to the remote confine of their empire. There was a time when copying wasn’t such a legal problem as it is today and more a form of flattery (even though it was sometimes punishable by death…so much for flattery.)

Fast forward to the second millennium and in the 18th and 19th Century we saw leading celebrities setting the stage in terms of fashion, behaviour, eating habits and etiquette in general. It’s in the 20th Century however that celebrity marketing took a turn and became the industry it is today.

The advent of modern celebrity marketing saw the light in the early parts of the 20th Century when Eleanor Roosevelt, the wife of Franklin D. Roosevelt, thirty-second President of the United States, raised a few eyebrows among the American elite with her involvement in advertising. Coupled with Jean-René Lacoste creation of a line of clothing around the same time and you have the beginning of modern celebrity marketing. This type of marketing accelerated in the 1960 with Audrey Hepburn claiming to have breakfast at Tiffany’s and in the 1970s sports celebrities such as Björn Borg and John MacEnroe became stars in their own right. Today, celebrity marketing is everywhere and is a full branch of the marketing arsenal of many top corporations in the luxury world or the fast moving consumer industry.

As an anecdote, it’s interesting to notice that recently the definition of celebrities has taken a backward turn…in time. The advent of museum shops creating jewelry pieces based on famous works of Arts depicting kings, queens and nobles, has brought celebrity marketing into a new dimension, one where the celebrities do not get paid (nor complain) but the brand association and desire the product create is equally strong.

Today, celebrity marketing is alive and strong. The results are uncertain but just like advertising (the favourite marketing tool of celebrity advertising) it’s not always easy to measure the impact they have on us and on sales.

Oscar Night 1989

The night where all major, and minor, stars come to see who will be crowned with the gold statuette represents the epitome of glamour since May 1929. And six months later, on Black Monday, the world’s economies were redefined. Despite the anti-climax of that year, that night has mesmerised us every year cince.

In 1989 the organisers made a slight change that made marketers took notice. They introduced the gift-basket, the  swag or schwag, those in the know seems to insist on calling it.

It was at first a simple ‘thank-you for being there’ gesture and carried no real impact on their business. It has since taken a life on its own spurring websites and blogs trying to identify what’s in it (as the organisers seeing the frenzy and sometimes ugly side of our beloved celebrities, decided not to release the list anymore.) And if today Keanu Reeves politely declines the basket, it has become an important tool in celebrity marketing where companies battle to be included by offering more and more expensive gifts (this year’s swag exceeds US$100,000.)

Swag is nothing really new. It’s been used in concerts for years. It’s the T-shirts or posters music bands use to promote their brand during and after a concert. It was a way to survive and promote. You could almost say that the corporate gift sitting on your desk at work is a swag and it’s role is branding. The most studied and often misunderstood aspect of marketing.

The Swag shall prevail

How does it work? Why is the swag so important in celebrity marketing?

After all, if it’s just a corporate gift, such gifts are often cheap and received by the dozens in any trade show you can go too. The main difference is that the celebrity swag is a luxury item, not a worthless plastic fan. That’s because the product is the swag, not one specially prepared with the brand logo on it. This is the twist that Oscar night 1989 brought to the forefront of marketing experts.

Celebrities wouldn’t be caught alive with your plastic toy in their hands but they’ll wear the watch, they’ll carry the bag or they’ll even the drive the car you offer them.

And to a marketer, this could be as powerful as a well prepared, well designed advertising campaign. The burst of interest in some products celebrities have created has sometimes changed the course of a sales line from barely acceptable to fantastic. While this is more anecdotal than fact as, like with many other marketing tools, there is no obvious direct relationship between an increase in a sales and the picture of a celebrity wearing your product (with exceptions am sure.) This brings along one important question: Is celebrity public relations more powerful than advertising?

Celebrity PR vs. Celebrity Advertising

It is important to understand the different between the two as both should be part of your strategy if you’re going into celebrity marketing.

Celebrity PR is more subtle. It’s about finding ways to get the celebrity to hold your watch, wear your jewel or come to your hotel and take a snapshot, a snapshot that will then become part of your marketing strategy. Many luxury products have on their payroll people whose only responsibility is to make sure that the right celebrities have the opportunity to use their products. Celebrity marketing is about brand association, and they wouldn’t be pleased if the ‘wrong’ celebrity was using your product. Of course, the definition of right and wrong is entirely dependent on your brand essence, on your marketing story. Just like normal PR, the outcome is less controllable but often more trusted than it’s cousin, celebrity advertising.

Celebrity advertising is about leveraging a celebrity’s brand because it matches the marketing message you’re pushing to the market with your own product. That brand association, while important in PR, is crucial in advertising. Choose the wrong association and it will backfire, choose the right one, and you could see an increase in sales (do not forget that advertising is about increasing sales, not brand entertainment.) Celebrity advertising opens our mind to fantasies, and you are better off remembering that your target market often fantasise more about the celebrity in that ad rather than the product they prominently display.

As in all marketing strategies, start with understanding your target market. How many are they? What do they do? What are their perceptions about your product? Do they really read the magazine your displaying your celebrity ad in? And if they do, will they act on the impression you’ve created today? Tomorrow? In the world of fast moving consumer goods celebrity marketing aim at the man and women in the street. In the world of luxury good however, the target market of celebrity marketing are often celebrities themselves and therefore do not ‘rush’ to any shops. The influence is more subtle. And celebrity advertising is about influence.

Whether you leverage both PR and advertising in your strategy is up to you of course but is your marketing story clear? Is it clean? Is it relevant? And is it ready for celebrity marketing? You are to remember as well that a celebrity will lend his or her name to a product for monetary reasons as well as to further extend their reach (or not to be forgotten as in some cases.) So if the marketing activity could potentially damage their reputation, or they’ve seen another celebrity being hurt by it, they will think twice.

Is Celebrity Marketing relevant for your product?

Yes and no. It depends on your product really.

Celebrity PR does work and the cost can justify the activity. Celebrity advertising, however, can be an expensive exercise. While these are but two tools in your celebrity marketing strategy, shop opening is another one, you need to determine it’s potential ROI before your commit to any course of action.

Celebrity marketing, just like the celebrities themselves, is fickle. Your marketing story cannot afford to be. Focus on your story and then add the right celebrity to your recipe and you could come-up on top. And so will the celebrity. It’s only when the two are closely connected that celebrity marketing truly brings you to the stars.

Thursday, January 29, 2009

Watch your Marketing

“I know that half the money I spend on advertising is wasted. I just don’t know which half.”

Department store magnate John Wanamaker

John Wanamaker was right. He knew how to run a department store and help create the world of advertising. Advertising back then was rather different than it is today. Less complex, more to the point. You advertised to sell, not to entertain or win awards.

The world of marketing has evolved since then. Marketing is no longer just advertising and is constantly evolving. The facts of yesterday become the opinions of tomorrow often paralyzing the best of marketers. In today’s world of over-communication, finding what works is a constant search for the truth (a tough word in marketing.) And there is no two ways about it, you need to measure what you do.

There has been dozens of trends since 1993 when Peppers and Rogers launched the concept of one-to-one marketing, still Nirvana in the world of marketing. The latest trend, for lack of a better word, is marketing return on investment, or MROI. F the past 3 years, many gurus and businesses have been trying to achieve a good understanding of the impact marketing had on businesses using ROI as their main tool. The top business organizations in the world already have a fair view of their MROI mainly because they dedicate processes and people to measure it. Most organizations are not that big and need to develop the skills to evaluate the true value of their marketing

Planning for Marketing

The biggest danger in setting-up your marketing strategy is not the type of strategy at your disposal, you can do almost anything in marketing, it’s you.

At the heart of a good marketing strategy are the beliefs of the person running the business. If you don’t believe in marketing, no amount of investment, and marketing is an investment, can help you. If you run your own shop, polish your marketing skills or hire the best person you can afford (and constantly polish his or her skills.)

Your next step is your plan. It can be complex or simple, a few dozen pages or a single page, but at all times it should be implementable. The best strategies falter not because they’re not clever but because they are not implemented properly. Implementing a marketing strategy is a daily activity and requires constant attention. A strategic approach that works well is to start with defining the target market you’re aiming as follows:

Ø  Target Who is your customer?

Ø  Positioning What can you do for them?

Ø  Objectives/ROI What is your quantifiable return?

Ø  Strategy & Tactics How will you go about it?

Ø  Budget How much are you planning to invest?

Ø  Schedule When will you do what?

Ø  Actual ROI How much did you make? How far is it from your objective?

This is a simple marketing strategy as it does not need to be complex to succeed.

Marketing Investment: Where should you money go?

If you follow the teaching of Jay Conrad Levinson, author of Guerilla Marketing, and you should, you will find at least one hundred marketing weapons[1] in which to invest your budget (of which half of them are free.) Prior to evaluate them, let’s address the issue of budgeting. There are four main ways to establish your budget, namely:

Ø  Affordable method

Ø  Percentage of sales method

Ø  Competitive parity method

Ø  Objective and task method

The first one is simply based on you think you can afford. It’s main drawback is that not connected to what you need to invest to succeed. The percentage of sales method is commonly used but follows the ups and downs of your revenue line. This could mean that at the time when you need to invest more, don’t forget that marketing often has a time delayed impact, you will end-up with less money. As for the competitive parity method, you simply need to know or estimate how much your competition is investing. The first drawback is that you might simply never know, the second, why should you copy if you want to lead the market? The last one is the objective and task method, this is the one you should focus on. It’s a simple method that looks at your objectives, determine the tasks or tactics needed to achieve them and estimate the investment required to implement them. This is the most practical method around today as it focuses on what you are trying to achieve, not what you can afford or what your competition is doing.

The selection of marketing tools, whether advertising, public relations, electronic, etc. is dependent on both your target market and your objectives. Why should you advertise if your target segment does not respond to it? Why should invest in an extravagant web site if your target segment only watches TV?

One of the principle tenets of marketing is that your company is not defined by the type of tools it uses. You are not your advertising, you are not your web site. Marketers often forget that being easy to do business with is probably one your most important marketing tool because, you see, marketing is not a function, it’s way a doing business, a philosophy in some ways, or more precisely, a business philosophy.

So where should you invest your marketing dollars?

To answer this question it’s best to consider that there are two ways to influence your target market:

Direct Revenue Impact

Your first consideration in developing the marketing tools you need is their direct impact on your revenue. In this area, learning all you can about Direct Marketing will allow to maximize your revenue while developing your brand at the same time. There are three main ways to impact your revenue directly, the first one being the acquisition of new customers, nothing new there, but how many of your marketing tools are focused on that objective? The second, and often most profitable, is focusing on increasing revenue for your existing customer base (the value of a good database is therefore self-explanatory.) The same question stands, how many of your tools are focused on this objective?

Indirect Revenue Impact

There are two elements to this way of influencing your target market. Every marketing and non-marketer is familiar wit the first one: your Brand (with a capital B as it is not small matter.) This is the area most often associated with advertising but let’s face it, advertising is not branding. It’s probably one of its best tool up until the advent of the Internet which has redefined the way people respond to a brand strategy. The second strategy focuses on developing your customer base. This strategy can be extremely profitable too but be careful not to exaggerate, too much communication and you can turn them against you. This is also an area where the traditional marketing tools like advertising or direct marketing have little effect.

It’s interesting to note that many profitable organizations do not invest much in marketing or advertising for that matter. They generally tend to be in the business-to-business and they rely more on personal connections with their supply chain. It’s a different game in the business-to-consumer where the personal connection is often hard to create and maintain (but not impossible.)

Both methods work. Both have their own set of marketing tools and costs. Both have their drawback. The ideal strategy combines both and your budget will decide how much you can invest in them whether together or separately, it all depends on your belief and expected ROI. Which brings us to evaluating your marketing performance.

Is marketing profitable?

The main difficulty in establishing whether your marketing is profitable is the core definition of what marketing ROI is. There are no accepted definition of the concept but suffice it to say that your marketing dollar should be treated just like an investment (with its own risk analysis) and therefore a dollar invested should have a rate-of-return greater than one. The exact percentage depends on your objective. There are two ways to look at MROI, the macro view and the micro view.

Macro MROI

NPV Gross Margin – NPV Marketing Investment

ROI  =  --------------------------------------------------------------------

NPV Marketing Investment

Where the NPV Gross Margin is the Discounted Cash Flow of incremental profits and costs that result specifically from the corresponding marketing investment

This simple formula should be easily calculated by your accountant and will give you a top end view of your effectiveness. It won’t tell you what works but at least it will increase your confidence as to whether your marketing plays a role in creating revenue.

Micro MROI 

This are is more complex as you will need to focus on every single element of your marketing strategy and establish the proper metrics whether it be public relations, advertising, direct marketing, your web site, etc. It is important to include the cost of your marketing people in this detailed analysis (you wouldn’t want to pay more for your team than the amount you invest in your marketing strategy.)

The main reason why marketers do not measure the results of their work is simply because they do no always know how, or in some cases, prefer to keep the marketing “mystique” where no-one really knows what they do. Before you establish your marketing metrics, you will need to go back to your business plan and study it carefully. A good business plan will contain all the information needed to help you establish your marketing objectives, strategies, tactics and metrics. A lot of marketing decisions are still based on people’s wishes or needs rather than a clear analysis of what needs to be done. This is why it is crucial to make sure that your objectives are measurable, timely and achievable. This will help you turn your marketing into an ROI machine

Remember, the end game of marketing is to build the business and that can only be done if it is measured