Building Effective and Efficient Marketing Plans for Sustained and Profitable Growth
This guide will explain the importance of a marketing plan, how to build one and how to monitor and improve your plans for stronger and more efficient growth.
Importance of a Marketing Plan
Marketing is essential to your business. It’s the lifeline and pipeline to creating a sustainable and profitable business. It’s what differentiates you, and it’s the road map to your success.
Why is a marketing plan so important? First, it’s strategic and helps you achieve your goals efficiently and smoothly. Second, it keeps you focused. It tells you what you need to do and when you need to do it. Third, it reduces stress…because if you follow it, you should be on track to achieve your goals. You won’t need to wonder and you won’t need to worry about forgetting to do key tasks.
When you have a strong marketing plan, you are proactive and purposeful with your marketing efforts. Without one, you are constantly reacting to the market and you are always a step behind.
As background, I have an MBA in marketing and 12 yrs biz experience running multi-million dollar and almost billion dollar brands – I’m sure you’ve heard of most of them. I worked at Procter & Gamble, Cadbury Schweppes and Revlon. I’ve now run my own small woman owned business for 9 years. So, I thought I’d share with you how I approach things.
Sorry for the length, but the content is meaty and I think/hope you’ll find helpful.
What is marketing?
Marketing is essentially all the “same” regardless of your business category, regardless of whether you have a product or service, or whether it’s Business to Business or Business to consumer, or whether it’s a high or low priced item. Yes, the strategy and tactics will be different, but fundamentally, this is what marketing is all about:
1. Determine your Target
2. Figure out what they need
3. Solve their need
4. Communicate it
Marketing tends to cost more at the beginning (when you are starting your business or launching a new product) and it gets more efficient as you grow. Part of this is due to scale, part of this is to having a larger consumer base (and some of those customers become repeat customers and recommend you/your product. And, part of this is because you learn and improve.
You want your marketing to be high enough to make a big impact, but low enough to not break the bank.
Marketing is more than placing ads. In fact, your marketing may not even include any ads. It may include phone calls, networking, a website, blogging (or content marketing), door knocking, direct mail, email marketing, paying for leads, participation in review sites, videos and many other activities – whatever is best for your target audience and product/service.
The 3 Parts of Building a Successful Marketing Plan:
1. Create a Goal and Develop Building Blocks to Reach the Goal
2. Develop a Plan to Deliver Your Goal – Strategy and Tactics
3. Determine your target and message (arguably, this is the 1st step when you define and start your business)
Now, for purposes of this article, I’m assuming you’ve already determined your target audience and positioning. This in turn leads to your equity and message. I could write a whole blog post on this…and some day soon, I will.
For now, I’m going to show you how to do the 1st two steps: 1) Creating a goal and building blocks and 2) Develop a Marketing Plan to deliver your goals.
The 5 Steps in Building a successful Marketing Plan
Step 1: Business Analysis
You have to analyze what has worked/hasn’t worked in the past, especially during last year. At Procter & Gamble, we actually spent 2 months on this…that’s how important it is. But, here are main points:
- First, list out what’s worked/what hasn’t – this can be related to your marketing elements/lead generation, sales strategy or even attitude/approach.
- Analyze your individual marketing elements – how much did each cost? How much did you get for that? You can analyze this as cost/lead or cost/appt or cost/$ sold (I do all 3). You can also try to analyze this based on time spent vs. return.
Once you have this done, it’s usually very obvious what you need to start doing more of and what you should stop doing. Remember, it’s not always about spending more…often, it’s about shifting things around and spending more wisely. (Same goes for time spent on activities). This one step is one of the most important and valuable areas in the planning process.
- Note any opportunities for growth. This could be based on what you think or observed in the market place or ideas you’ve read or what you’ve seen your competition doing. Try to make an intelligent guess on what this could be worth/how efficient it is. Make inquiries on the cost (so you can refine your assumptions. This is much easier to do after you’ve done the above step.
- Analyze your actual results for this year -What are the building blocks? How much did you get in sales? What was your close rate? What was your average job size or commission? How many leads did it take?
Step 2: Develop an Objective (or a goal)
This might be a profit # or a sales # or both. Make sure it makes sense for you. It should be stretching, but achievable. (E.g. your objective could be to be the #1 store or team in your area (or your company) and goal to be XX in sales (which leads to Y in profit). Figure out what’s right for you. Or, you goal may be to grow 20% vs Year Ago. Be sure to translate this to a sales number.
Step 3: Develop a Business plan that reaches that goal
Create this by using a building block style…backwards engineer it. So, if your goal is to hit $1,000,000 in sales, figure out the building blocks to get there. For me, that might look like this:
Average job size = $4,000. That means, I need 250 jobs sold. (i.e. 1,000,000 divided by $4,000)
The next question is what does it take to reach 250 jobs sold? Well if my close rate = 50%, then I need 500 appointments.
So, how do I get 500 appointments? Well, if my slippage rate is 50% (or said another way, if I can only meet w/ 1 out of every 2 leads), then I need 1,000 leads for the year.
How do I know this???? Because I did this work in Step 1.
- $1,000,000 in sales
- $4,000 Avg job size
- 250 jobs needed
- 50% close rate
- 500 jobs needed
- 50% slippage – people that expressed an interest but I wasn’t able to meet with (or they just weren’t ready yet)
- 1,000 leads needed
So, now I know what I’m shooting for and what I need to reach my goals. I might do a sanity check and look at those #’s by week or month to make sure they seem reasonable. So, for me, that looks like 20 leads per week which leads to 10 appointments and 5 sales (which for me is doable).
I will often put this formula in a spread sheet so that I can tweak my assumptions. For example, what happens if I’m able to have a higher close rate (e.g. 55% or 60%). What will that result in? Or conversely, what happens if I only close 40%? How many more appointments (and leads) do I need to reach my goal?
I try to plan a bit conservatively, because I’d rather have some upside (vs. risking not reaching my goals). So I may spend more money (or more time) so that I make sure I have enough leads and appointments.
I also may be a bit more conservative in my average job size. However, I don’t want to be too conservative, as then I may run myself ragged and find that it results in a lower close rate. (i.e. when you have more focus, you are often serve each customer better and therefore are more likely to close them). I hope that made sense. It’s all about balance.
Step 4: Develop your strategy.
Okay, this part I have difficulty explaining how to do, but it is super critical. Strategy is what you are doing (or not doing) and what differentiates you in the marketplace. I always have 3-4 strategies.
An example of a strategy I added a few year was to improve customer loyalty. It was specific enough to direct me but sufficiently broad to not limit me to one or two tactics. In fact, there were prob. 6-7 things I did to improve this area. As a result of our efforts, we now have a lot more repeat business this year vs. last year.
Step 5: Develop a marketing plan (or the tactics):
I build this up. My strategy is top down; my tactics bottom up. I do a combo of what has worked before and fits w/ strategy and then based on strategy what needs to be added or shifted. I literally build a grid by tactic which says I will spend X (or spend time doing X) which will result in Y leads and Z appointments and I build my plan up (based on analysis and interpolation from Step 1.
I make sure that I end up w/ at least 1,000 leads and 500 appts. Some tactics are more effective than others; some are more efficient than others…but what matters is that the combo meets or ideally exceeds your #. Best to have it exceed since there will be overlap of your marketing tactics and also better to blow your goals out of the water than fall short.
$ spend # leads # appts # jobs
Each year, I try new things. Sometimes I have no clue how much biz they will generate, but I at least try to make an educated guess. And, even if I’m not right, I get better at it the next year.
I hope this is helpful for you. I know most of you are realtors and this may be based on commissions, but hopefully, you can search & reapply this to your business.
Setting a Marketing Budget?
Notice that I did NOT include “set a marketing budget.” In my mind, this is a backwards way of thinking. Instead, you want to focus on your Goals! What will it take to achieve your goals?
Then, you build the plan to achieve your goals and then you look at costs. Of course, it goes without saying that you want to be cost efficient. If you feel that your costs are too high (especially when you look at your net profit), or if it feels too risky, then do the following:
- Analyze the efficiency of your elements and prioritize them.
- Test elements that are unproven (and then expand or cancel based on results).
- Consider ways to make elements more cost efficient.
- Trade time for money. You either need to spend time or money to market. Your choice on this may vary based on where you are in your business and whether you currently have more available time or money. For example, if you are new and can’t invest much money, you may consider spending more time networking. And, once you’ve become very busy, you may not have much time to network, and then you may spend more money in marketing (or in hiring another employee).
- Reassess your goals. Are they realistic? Are they achievable in the time frame?
What to do AFTER you build the marketing Plan
1. Develop the calendar/schedule of events
Determine when the events will happen. Look at this from a customer point of view (rather than simply your cash flow). Think about when it makes the most sense for the marketing pieces to hit the marketplace. Be sure to be consistent, but also look to supplement with activities when your target audience is primed and most likely to purchase (that way, your marketing will be more effective and efficient).
2. Implement the elements.
You may want to implement and execute some of the elements right away. Some may need to be done on a weekly or monthly basis (or even daily). Some you may want to do 3-6 months from now. Make sure you have this on the calendar and you have a way to remind yourself what needs to happen when. And, space things out. After all, you are running a business and have many things to do (including marketing, sales, paying bills, managing people, etc.). So do a little bit at a time.
3. Make sure you have your sales goals (and key measures) each month (or even each week).
This way, you can track month by month (or week by week) where you are vs. your goals (more about this in a minute). You want to have measurable milestones.
If you business is seasonal, factor that in. (Look at the past 3 years of sales for averages by month). If you are new business, factor in that the first several months will be slower.
4. Track, Track, Track your progress
The majority of businesses skip this step. And, this is a big mistake. After all, you want to see where you are vs your plan and course correct as needed.
Track results, track where the business is coming from. We ask every single one of our customers how they heard about us. This lets us know what’s working best and allows to to analyze and improve our business throughout the year.
If you are ahead, you may increase your marketing or hire more people…or just celebrate. If you are behind, you want to adjust what you’re doing well (and do more of it) and what is not working (and do less of it). You may also need to adjust your spending.
In addition to tracking your sales by month (or week), also track your key building blocks (i.e. leads, appointments, close rate, average job size). If you are off your target, you need to understand where the issue is.
So, if your sales are lower, is that because because you didn’t have enough leads or appointments? Or, is it because you didn’t close a high enough percent? Or is it because your average job size is lower?
If it’s a leads or appointment issue, you’ll want to look at your marketing. It could be that you need to spend more time or money to increase the lead flow. Or, that you need to narrow your target (or choose a new target/adapt it), or because you need to improve your marketing message.
If it’s due to a low close rate, you’ll want to figure out how to improve your close rate (or conversion rate). Or, if that’s not possible, look at better targeting. And, if that won’t work, look at getting more leads/higher quality leads.
If it’s average job size, this may mean that you just need more leads/appointments. Or, there may be a way to expand the average job size (e.g. up-selling, cross-selling, encouraging consumers to buy multiples). You may also look at which segment of consumers have a higher average job size and then try to find more customers that are similar to them.
For my business, I check things each month. (All of our lead sources are recorded as we go). I then look to see if we are on or off target for the month (and how we doing vs Year Ago – both in total and by lead source). I try not to get stressed out at the beginning of the year if I’m off my sales target as a) my business is very seasonal and the cold weather/snow has a big impact and b) sometimes, it just takes a bit of time for the marketing to kick in. If I’m still off by April, then I get concerned.
I also create key check in points throughout the year, especially when it’s a bit slower (as I have a bit more time).
Key check in points throughout the year:
- July 4th week (This is the mid year point…and it’s also a quick respite for my biz).
- Labor Day Weekend (The week before and after is a bit slower due to the holiday and back to school). It’s a good change point for the year and allows me to prep/adjust for the fall and last 1/3 of the year.
- Thanksgiving to end of year (This is also a slower time for my business due to holidays and colder weather. This is when I really analyze my business and put together my marketing plans for the following year).
1. Analyze past results – effectiveness and efficiency
2. Learn and improve; Adapt strategy (or tactics or both)
3. Build next year’s Plan – a) Goals and building blocks, b) Develop the plan, c) Improve the message
The biggest mistakes when it comes to building a marketing plan:
- By far, the biggest mistake is NOT having a marketing plan. It’s amazing how many businesses skip this critical step. If you build one, you are miles ahead of most businesses.
- Not tracking your progress. (Or tracking it and not making any adjustments).
It’s time to dive in and develop your marketing plan. If this is your first time, remember, it doesn’t need to be grandiose. It just needs to be practical and achievable. Take the plunge and then closely follow and monitor your plan. Adjust as you need to. Then, fully analyze the results at the end of the year. Next year, it will be easier to develop the next marketing plan, and it will be even easier the following year.
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How to Build a Successful Marketing Plan – Marketing 101