As the year winds down, it is a great time to think about your marketing plan and budget for 2010. For small-business owners,
this is particularly important, because we do not have the marketing budgets of large firms, like Coca-Cola or McDonald’s
or even midsize firms like Marsh Supermarkets or Finish Line. For us, making every dollar count is critical.
Start with clear goals: Match expenses to sales
How much should you spend on marketing? There is no one simple answer, but here are some things you should consider:
• How much do you want to sell next year? A marketing budget of 2 percent to 5 percent of sales is a good starting point for an existing business, 7 percent to 10 percent for new companies, and those in higher-growth mode.
• How large is your average sale, and how long does a customer stay with you? In a relationship business, with repeat transactions, it makes sense to spend more money on new-client acquisition.
• How large is your existing customer and referral base? The more relationships you have, the less you need to spend on mass advertising. This leaves more funds for loyalty and retention programs.
Whatever your budget, focus is key
No matter how universal you believe your product to be, there are subsets of the larger market that are more likely to buy than others. The key to effective marketing is to identify that subset and focus your energy and marketing efforts on that segment.
Defining a target will not limit to whom you sell, simply whom you chase. As you begin planning your 2010 marketing program, start by identifying your target. Since you probably do not have sufficient funds to support a true mass-market campaign, narrowing your audience to people who are most likely to buy will produce significantly better results.
Why do you get better results when you identify a smaller target? Your results improve because you can reach the right people more often, rather than trying to touch everyone once. And when you understand your customers, you can craft more relevant messages to attract their attention.
What do you say? Define your message
Before spending money on marketing and advertising, take time to answer these questions, to figure out what messages will be most relevant to the audience you are trying to reach.
• What do your clients think of you and why?
• Who are your most profitable clients?
• What are the purchase factors that motivate clients and drive their decision?
• What are your barriers to selling?
• What are the characteristics of your typical and ideal client?
• Which of their problems do you solve?
As you focus on what is important to your customer, what keeps them up at night, it is easier to craft a message that addresses their concerns, not what you want to sell. I once had a financial planner tell me what his customers wanted were choices. I had a hard time imagining many consumers lying awake at night worry about not having enough choices. This was an important element to him, but maybe not to his clients. What keeps your clients awake?
Once you define market and message, now you are ready to select the media. Should you use newspaper, radio, TV, social media or some combination of all of them? Select your media based on the ability to reach a large concentration of your target. To do this, you have to really understand your target. You need to know where your customers are going for information now.
If this sounds like a lot of work, it is. But it pays off, when your marketing drives the right prospects to your business.•
Ball is president of Roundpeg, a Carmel marketing firm, and president of Rainmakers, a local networking association. She can be reached at firstname.lastname@example.org.