Did you know that nearly 75% of all people who start an online business do so without any plan as to how they are going to bring customers to their business? When you ask these people what they are going to do to bring customers to their business to make sales, they refer only to things such as friends and family, paid advertising, SEO and social media.
Sure, these are awesome ways to create a customer base, but if you have never sold a product online before, how are you going to know what works and what does not work? You can visit trade shows, host a product launch event, create a database of bloggers who you can reach out to to write product reviews, and perhaps even reach out to newspapers and magazine for reviews, but without a solid plan as to how you are going to manage these strategies you can never hope to maintain a solid and ever-growing customer base.
According to research, people who start an online business and bring in at least 100 new customers in their first month, often have the potential to grow within their first 3 years of operation. However, all other business start-ups may attain only 20 to 30 new customers per month over their first 2 or so years, and they can expect to watch these numbers rapidly decline as time goes on.
What do you think separates these two different types of businesses? Obviously the business that brings in 100 customers in its first month and grows on this number on a monthly basis has a plan in place to manage customer flow and is doing something which is constantly bringing new customers in. They would be using a marketing plan.
Great, you say. All I need to do is write up a marketing plan and my business will be successful.
Let’s not get ahead of ourselves just yet. As you should know, they key to building a successful business or any endeavour in our lives comes down to the planning that we put into place before we even start that business or venture. The first thing you should do in this planning process, is to look at the following three areas and answer them honestly.
- Budget. How much do you have available to spend, and how much of this money are you honestly prepared to spend on marketing your business to the world?
- Talent. What are the strengths and weaknesses of yourself and/or your team that are going to help your business grow and are going to prevent your business from growing?
- Limitations. What are area’s of your business and yourself and team that can only be taken to certain limits? For example, how much time can you realistically invest in your business per day or week? How much money do you actually have to work with? How realistic are your expectations of success?
Once we are completely honest with ourselves, we can have a more realistic idea of what is and what is not possible within our abilities and constraints. There are many businesses out there who have gone into business with guns blazing, only to find that they fail quickly. The reason? They were not completely honest with themselves as to what they can and cannot do, and what is and is not possible in regards to the potential of success. It is highly unlikely that your business is going to make a million dollars overnight (if success to you is defined financially), or be featured on the front of every magazine that matters – but what is likely is that if you put in the time to plan, you will reap the rewards of that effort you put in.
Let’s have a look at what you need to include in order to write a successful marketing plan.
Front Page: Executive Summary
Although this is the first thing that you and other potential business interests will read, it is the last thing that you should write. It is basically a summary of your business, its goals, its team, and any information which would be considered important for a potential investor.
Section 1: Goals and Objectives
Just as the title suggests, the first section is where you will list all of the goals and objectives for your business. These goals are normally focused on the next 12 months, and may include things like creating or accessing a market, stealing customers from your competitors, expanding where you will sell your products (offline to online for example), and launching new products and services.
Often a good way to write this section is to have a clear and specific goal in mind, and then create objectives which will result in your business achieving that goal. For example, say you want to increase profit by 25% per month, you would look at achieving things like increasing customers by X amount each week, increasing repeat business by X%, and so on. Don’t worry about “how” you will do these things yet – just have a clear goal in mind at this point.
Part 1: Organization Mission Statement and Value Proposition
This is a strong paragraph or several paragraphs which explains why you are in business, what markets you are in and why, what are the main benefits that you offer to customers, what do you want your brand or company to be known for, what do you want to prove to the industry (and also customers and partners), what is your philosophy of doing business, and what products and/or services does your business offer to the market?
In addition, you will want to make clear how your business came to be, the reasons as to why and how it was created, how your products have evolved, and what markets you currently or plan to serve. You should also write about what your business is good at, what separates you from your competitors, what competitive advantage do you have over your competitors, and so on.
You do not need to include all of these if you do not want to, but what is important is that you paint a strong picture as to who you are, why you are in business, and what your business can offer that is better than anyone else or what is currently on offer in the market. That will be your mission statement. On the other hand, the value proposition is where you explain what benefits or advantages your actual products give to the market, and what puts you in a better position than your competitors.
Section 2: Target Customers
This is quite self-explanatory. You want to define who it actually is that you are selling to, such as age, gender, location, income, family status, and so on. You also want to define the actual market or niche area that these customers exist in, such as books, movies, websites, magazines or television shows, so that you can have a good idea as to how these people think and what their interests are.
You can use this information in order to be able to effectively target these customers using elements of effective ad placement, selling in their local markets, and so on. The information will also allow you to “think like them” and determine how they make their buying decisions, what sources do they consult before they make these decisions, and the factors which influence their decisions.
The last step is to determine the actual size of your target market. In other words, if every single person of your target customers made a purchase, what would this number be? 10,000? 50,000? In addition, what percentage, if any, of this number has purchased from you before? How do you see this number growing exponentially over time?
Section 3: Situational Analysis
This is where you determine exactly where you are right now, and can actually take the longest time to write. You will want to look at your current:
- Products – features and benefits, pricing levels from wholesale to retail, your promotion and marketing strategies, what products and/or services you currently offer.
- Distributor Networks – how and where is your business distributed? Online and offline? Office space and warehouse? Your product sources and placement of advertisements. The network of your supply chain from product procurement to end-user (customer).
- Competition Analysis – define what it is that your competition is currently doing, with strong emphasis of their strengths and weaknesses.
- Current Financial Condition – detailed analysis and numbers for each of your business sectors (overall, products, distributors, and area’s of your sales), in regards to market share, profit/loss, total sales, and also you will need this information for your competitors (estimated if there is not clear public information)
- Profitability Analysis – what areas are in profit and what areas are at loss and need improvement? Also look at your direct and indirect expenses and how these can be more effectively managed or controlled.
- External Forces – what areas outside of your business have the potential to affect it? These may include social and cultural shifts, changes to demographics, technological, climate, political, legal and ethical considerations.
- Summary – provide a summary of the information that you presented in this section so that you have a clear understanding of exactly where your business is at at the moment and what needs to change in order to increase success and profitability.
Section 4: Pricing and Positioning Strategy
Where do you want your business to be in the market? Using the information that you have gathered and provided in your situational analysis, you may need to consider adjusting your pricing model in regards to those factors which may affect your competitive advantage in the market. Consider looking at also how these pricing changes can affect both customer sales and channel sales in your market, taking into account the changes to cost and profit that these changes will incur.
Section 5: Distribution Plan
How and where will your customers have access to your business to be able to purchase your products? Will they buy through your website or a brick and mortar shop? Do the products come from your physical stock, or do you contract a third-party warehouse or distributor to manage product fulfilment?
Section 6: Promotions Plan
What promotion channels do you currently have at the moment, and what channels do you want or see yourself using in the near future? Discuss your current positioning within these current and new channels, making sure that you analyse the time and profit/loss costs and investments required for each.
These channels might include partnerships, SEO, social media, street advertisement, radio, television, direct mail, telephone, blogs, magazines and other print media. There are plenty more of course which you can consider.
Section 7: Marketing Assets
What marketing strategies or assets do you currently have in place? This may include your website, design talent that you employ, business cards, advertisements, and product catalogs. You should also explain the success of these and what needs to be changed in order to increase that success.
Section 8: Conversion Strategy
Using your marketing assets to bring people to your business, what do you have in place to turn these people into paying customers? You may consider improving your sales copy, having customers write testimonials, and increasing the quality of your product images. This is a constant process which needs to be continually analysed and adjusted, as the needs of your customers are constantly changing.
Section 9: Joint Ventures and Partnerships
What agreements, if any, have you made with other companies or organizations to help you build your business? For example, McDonald’s helps to promote Coca-Cola. Have a think about what businesses exist out there that relate to yours and what you can do to share a larger market with them.
Section 10: Strategy For Increasing Orders
What can you include in the sales process to increase the amount of money that customers spend with you? Something as simple as including free shipping with orders over a certain amount can help, as can bundling products, offering discounts for repeat customers, and so on. Make sure that you include any research that you have done which will support your ideas that these will actually increase the amount of money spent with your business.
Section 11: Referral Strategy
What benefit do you give to your current customers to bring new customers to your business? A great rewards program can do wonders for your business, provided that you have the proper planning in place to handle this shift. You may consider offering your customers a discount on their next order for every new customer that they bring to your business.
Section 12: Financial Projections
This section is a summary of all of the costs that you have described in the previous sections, as well as the time that is required to implement each, and the profit or loss that may be incurred as result of their implementation. Of course this is not 100% accurate and just a researched estimate, but having this information is important to use as reference for your future goals and to track your failure and success as time goes by.
Phew! That was a lot of information. As you can see, a lot of effort and research is required in order to develop a solid marketing plan. They are vital because they turn your business ideas into something concrete and realistic, enabling you to see exactly what is required to be put into them to make them work, and all of the costs involved.
Money goes fast when building a business or implementing a marketing strategy, which is why it is important to do quality research before hand to make sure that that money is well invested into something that is proven to work.
If you are already in business, then rewriting or developing a new marketing plan can help you see more clearly what your business is currently doing, and any areas that need to be changed.