Tips and Traps in Developing Marketing Strategies
| Category: Marketing Strategy | Date: 2001-08-20 |
Power HomeBiz Guides
A good marketing technique is one part of the business that is absolutely essential to its success. In fact, the ability to properly market a product or service is actually more important than the product itself. Even an inferior product can be a financial success if marketed properly.
Regardless of the nature of your business, the managing of the marketing function will demand more creativity and more astute judgment than any other single phase of the business. The end purpose of all the activity e.g. inventory accumulation and production is the accomplishment of those exchange transactions called sales.
A smart entrepreneur designs the firm’s organizational structure so as to give the marketing component its deserved prominence. Below are some rules to increase the effectiveness of your marketing strategies.
Never lose sight of the pitfalls of the "80/20 rule. Do you know that but 80% of your marketing efforts are often spent on the customers or clients yielding only 20% of the annual revenues? A practical rule of thumb that you can apply to your marketing planning is the eighty-twenty principle. Look at your client list and identify those customers that were taking up all of your time and not producing results. Some of your prospects may recognize their need or problem and understand that you have a solution, but are not ready or able to pay you. Find customers who will pay you to meet their needs or solve their business problem. Shift your focus to the more productive clients and less time-consuming with long-term growth potential.
Get close to the customer. In today's marketplace, getting close means treating customers and clients (and in certain cases, even vendors) as if they truly are your strategic partners and you truly care about them and their employees. It is important to try to satisfy them with the right products and services, supported by the right promotion and available at the right time and location. Customers can easily detect indifference and insincerity, and they simply will not tolerate it. Long-term client and customer loyalty is a long-term challenge that you must earn every day and with every transaction. Building customer loyalty is particularly difficult for e-commerce businesses, where competitors are but a mouse click away. Small business, in order to compete with big conglomerates, should strive to establish a culture of customer service that aims to delight the customers.
Try to do more with less. Often the most effective marketing strategy or campaign is not necessarily the most expensive or the most complex. Traditional businesses from the emerging growth companies to the industrial giants -- are getting better results by focusing on simplification. Simplification is achieved by reducing unnecessary product and service lines, outsourcing post-sale functions such as training and support, cutting back on trade promotions, easing up on coupons, trimming new product launches, spinning off marginal brands, and using old-fashioned face-to-face meetings for maintaining relationships with clients and customers.
Don't be left behind on the information superhighway. More and more firms are setting up web sites and learning how to use the Internet as a marketing tool. The Internet has allowed even small entrepreneurs to reach a much wider market, providing information about the company and serving customers’ needs 24 hours a day, 7 days a week. Some traditional companies use the Internet as a powerful complementary marketing tool, while some small businesses start directly on the Internet.
Reach out to the global markets. The World Wide Web has allowed every e-commerce web site to make its offerings globally accessible. Small businesses therefore need to expand their marketing and sales efforts beyond the domestic markets. Take the time to learn the challenges of doing business overseas and how to serve foreign customers well. Many small and growing companies that have ventured abroad as pioneers of doing business in the global village have discovered lucrative and receptive new markets. Remember, if your business is not yet global, then you are missing the opportunity and the point of conducting business on the Internet.
Keep your eyes open. A growing small business needs to constantly have their eyes and ears open to emerging trends in their markets, technological developments, and steps taken by their competitors. To keep you informed, closely monitor the attitudes of your employees and the opinions of your "stakeholders" such as vendors, customers, staff, landlords, lenders, directors, and stockholders. Successful entrepreneurs are focused 24 hours a day, seven days a week, on how to get new customers and clients as well as how to keep existing clients happy.
Make new friends but keep the old. While small businesses need to constantly capture new customers, the priority should be continue pleasing the existing customer base. Companies that fail to nurture their customer base ultimately fails. Your ability to attract new customers will be limited and eventually impossible if you can't hold on to, and delight your existing customers and clients. It costs twice as much to get new clients rather than maintaining your customer base. Remember, one of the keys to marketing and growth is getting more business from existing clients and customers.
Don't forget where your bread is buttered. This old adage is also applicable to marketing and customer service. Too often growing companies’ focus on the customers only, not on where the customers come from. The sources of client and customer referrals are relationships that must be coveted and maintained just as effectively as direct client and customer relationships. This is particularly true on the Internet, where it is important to build, enhance and maintain relationships that direct traffic to your site, by reciprocating wherever possible and refining the relationships as they evolve.
Don't be afraid to think outside the box. The traditional solutions to sales and marketing problems yield traditional results. Putting your company on a rapid growth track means being willing to break through old paradigms, engage in street fighting with your competition, and approach marketing and promotion with fresh ideas and approaches. For example, instead of focusing on lowering prices to meet the competition, retool your strategy around adding value and enhancing the customer's experience. Nordstrom's strategy of focusing on the quality of the customer's experience and not on the price is very effective. The old adage "Quality is remembered long after price is forgotten" is true in many types of industries and can be a much more profitable strategy in the long run.
Marketing is as much about perception as it is about reality. Marketing is the art and science of moving the image of your business to the forefront of a prospect’s mind. In the mind of the customer, a product or service has an assured baseline level of quality. Hence, small businesses need to emphasize the intangible and often elusive value added. The task of the marketing plan, therefore, is to advance the image of your product preferably one that emphasizes customer benefits and your distinctive competency. Entrepreneurs must strive to build brand image and loyalty as well as establish market leadership. In several instances, market leadership and consistency in the customer's experience can often triumph over quality. For example, the market leadership and worldwide consistency of McDonald's keeps sales growing, even if its hamburgers are not the best on the planet.
Remain focused on your core products. Most successful companies have stayed focused on a particular product or service category, even if it meant the sacrifice of ancillary sales or the loss of certain customers. For example, when you think about Blockbuster, you think about video rentals. Over the years, Blockbuster has also inched its way into video game rentals and a limited line of candy and merchandise, but the focus has remained on video rental. The key point is that Blockbuster could have tried to sell other products and services to the "captured customer" who spends 15 or 20 minutes choosing a video in its stores, but it had the discipline to stay focused on its core business, which has propelled its growth worldwide.
About the Author
Isabel M. Isidro, Power HomeBiz Guides. For more articles, visit Power HomeBiz Guides at powerhomebiz.com. PowerHomeBiz.com is an online magazine designed to stimulate your entrepreneurial mind. We make small business do BIG business. To subscribe to the bi-monthly newsletter, send email to newsletter@powerhomebiz.com.
:To contact see details below.
editors@powerhomebiz.com
http://www.powerhomebiz.com/
A good marketing technique is one part of the business that is absolutely essential to its success. In fact, the ability to properly market a product or service is actually more important than the product itself. Even an inferior product can be a financial success if marketed properly.
Regardless of the nature of your business, the managing of the marketing function will demand more creativity and more astute judgment than any other single phase of the business. The end purpose of all the activity e.g. inventory accumulation and production is the accomplishment of those exchange transactions called sales.
A smart entrepreneur designs the firm’s organizational structure so as to give the marketing component its deserved prominence. Below are some rules to increase the effectiveness of your marketing strategies.
Never lose sight of the pitfalls of the "80/20 rule. Do you know that but 80% of your marketing efforts are often spent on the customers or clients yielding only 20% of the annual revenues? A practical rule of thumb that you can apply to your marketing planning is the eighty-twenty principle. Look at your client list and identify those customers that were taking up all of your time and not producing results. Some of your prospects may recognize their need or problem and understand that you have a solution, but are not ready or able to pay you. Find customers who will pay you to meet their needs or solve their business problem. Shift your focus to the more productive clients and less time-consuming with long-term growth potential.
Get close to the customer. In today's marketplace, getting close means treating customers and clients (and in certain cases, even vendors) as if they truly are your strategic partners and you truly care about them and their employees. It is important to try to satisfy them with the right products and services, supported by the right promotion and available at the right time and location. Customers can easily detect indifference and insincerity, and they simply will not tolerate it. Long-term client and customer loyalty is a long-term challenge that you must earn every day and with every transaction. Building customer loyalty is particularly difficult for e-commerce businesses, where competitors are but a mouse click away. Small business, in order to compete with big conglomerates, should strive to establish a culture of customer service that aims to delight the customers.
Try to do more with less. Often the most effective marketing strategy or campaign is not necessarily the most expensive or the most complex. Traditional businesses from the emerging growth companies to the industrial giants -- are getting better results by focusing on simplification. Simplification is achieved by reducing unnecessary product and service lines, outsourcing post-sale functions such as training and support, cutting back on trade promotions, easing up on coupons, trimming new product launches, spinning off marginal brands, and using old-fashioned face-to-face meetings for maintaining relationships with clients and customers.
Don't be left behind on the information superhighway. More and more firms are setting up web sites and learning how to use the Internet as a marketing tool. The Internet has allowed even small entrepreneurs to reach a much wider market, providing information about the company and serving customers’ needs 24 hours a day, 7 days a week. Some traditional companies use the Internet as a powerful complementary marketing tool, while some small businesses start directly on the Internet.
Reach out to the global markets. The World Wide Web has allowed every e-commerce web site to make its offerings globally accessible. Small businesses therefore need to expand their marketing and sales efforts beyond the domestic markets. Take the time to learn the challenges of doing business overseas and how to serve foreign customers well. Many small and growing companies that have ventured abroad as pioneers of doing business in the global village have discovered lucrative and receptive new markets. Remember, if your business is not yet global, then you are missing the opportunity and the point of conducting business on the Internet.
Keep your eyes open. A growing small business needs to constantly have their eyes and ears open to emerging trends in their markets, technological developments, and steps taken by their competitors. To keep you informed, closely monitor the attitudes of your employees and the opinions of your "stakeholders" such as vendors, customers, staff, landlords, lenders, directors, and stockholders. Successful entrepreneurs are focused 24 hours a day, seven days a week, on how to get new customers and clients as well as how to keep existing clients happy.
Make new friends but keep the old. While small businesses need to constantly capture new customers, the priority should be continue pleasing the existing customer base. Companies that fail to nurture their customer base ultimately fails. Your ability to attract new customers will be limited and eventually impossible if you can't hold on to, and delight your existing customers and clients. It costs twice as much to get new clients rather than maintaining your customer base. Remember, one of the keys to marketing and growth is getting more business from existing clients and customers.
Don't forget where your bread is buttered. This old adage is also applicable to marketing and customer service. Too often growing companies’ focus on the customers only, not on where the customers come from. The sources of client and customer referrals are relationships that must be coveted and maintained just as effectively as direct client and customer relationships. This is particularly true on the Internet, where it is important to build, enhance and maintain relationships that direct traffic to your site, by reciprocating wherever possible and refining the relationships as they evolve.
Don't be afraid to think outside the box. The traditional solutions to sales and marketing problems yield traditional results. Putting your company on a rapid growth track means being willing to break through old paradigms, engage in street fighting with your competition, and approach marketing and promotion with fresh ideas and approaches. For example, instead of focusing on lowering prices to meet the competition, retool your strategy around adding value and enhancing the customer's experience. Nordstrom's strategy of focusing on the quality of the customer's experience and not on the price is very effective. The old adage "Quality is remembered long after price is forgotten" is true in many types of industries and can be a much more profitable strategy in the long run.
Marketing is as much about perception as it is about reality. Marketing is the art and science of moving the image of your business to the forefront of a prospect’s mind. In the mind of the customer, a product or service has an assured baseline level of quality. Hence, small businesses need to emphasize the intangible and often elusive value added. The task of the marketing plan, therefore, is to advance the image of your product preferably one that emphasizes customer benefits and your distinctive competency. Entrepreneurs must strive to build brand image and loyalty as well as establish market leadership. In several instances, market leadership and consistency in the customer's experience can often triumph over quality. For example, the market leadership and worldwide consistency of McDonald's keeps sales growing, even if its hamburgers are not the best on the planet.
Remain focused on your core products. Most successful companies have stayed focused on a particular product or service category, even if it meant the sacrifice of ancillary sales or the loss of certain customers. For example, when you think about Blockbuster, you think about video rentals. Over the years, Blockbuster has also inched its way into video game rentals and a limited line of candy and merchandise, but the focus has remained on video rental. The key point is that Blockbuster could have tried to sell other products and services to the "captured customer" who spends 15 or 20 minutes choosing a video in its stores, but it had the discipline to stay focused on its core business, which has propelled its growth worldwide.
About the Author
Isabel M. Isidro, Power HomeBiz Guides. For more articles, visit Power HomeBiz Guides at powerhomebiz.com. PowerHomeBiz.com is an online magazine designed to stimulate your entrepreneurial mind. We make small business do BIG business. To subscribe to the bi-monthly newsletter, send email to newsletter@powerhomebiz.com.
:To contact see details below.
editors@powerhomebiz.com
http://www.powerhomebiz.com/
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