Marketing, and your process for selling your products or services, grows out of your strategy with the focus on how your products or services solve a customer’s problems.
Solving customer’s problems are the benefits a product offers, such as saving time, providing a scarce resource, pain relief etc.
Once you know what your products or services are, you will need to be able to sell them and deliver them profitably ie. for more than it cost you to make or buy.
Then there’s the question of value.
You’ll want customers who are prepared to pay you more than it cost you to make or buy.
Think premium prices.
Too cheap and you compete with everyone else selling on price.
Hence you need to increase the value of the offering.
Marketing strategy is about how you communicate this to your preferred customers or clients.
Furthermore, it is critical for the three stages every business has to go through survival, growth or thriving.
Marketing’s job is to create an awareness of your brand or products (often referring to the product or business name eg. Nike etc ).
This is enacted through promotional activities. Building up that awareness to the point where your product or service is front of mind, can create a preference to buy from you in the minds of your customers.
A very simple idea about creating awareness is to consider the almost invisible, promotion of tomato sauce (ketchup), a $70 million market in Australia.
Which one do you buy?
How do you know about that particular brand?
It has a lot to do with advertising, but there’s a good chance you weren’t really aware of any you saw over a long period of time.
That is what I mean by wanting to you to dominate your market and create a monopoly through focusing on a niche. Limiting what you offer and targeting a narrower set of customers; creating a business that it is difficult for others to copy.
To illustrate what I mean here, if you make hand-made shoes, how many can you make in a week?
That’s how many you can sell and comfortably deliver.
If you run a cafe how many meals can you deliver over lunch? How many good coffees can you make in a day?
If a hairdresser – how many cut and colours can you do in a week?
Your promotional activities seek to fill spare capacity, those hours or slots not already booked up. But, if you are in competition with many other similar businesses, that gets difficult. Hence concentrating on what you do best.
In the good old days promotion was through mass advertising and seeking to interrupt your attention: local papers, national or state newspapers, junk mail, radio advertising, direct mail, TV advertising, giveaways and coupons, public relations, Yellow Pages and so much more. It is often referred to as a push or outbound marketing.
Much of this is still relevant today, provided you take a strategic approach over time and that it compliments your other activities.
Today’s digital age means there are a whole lot more ways to promote your business at a reasonable price in comparison to the traditional ones: websites, social media such as Facebook, Google+, YouTube, Twitter and Pinterest and smartphone apps, PPC ( pay per click advertising on Google or Bing or other online media including social media ). This is know as pull or inbound marketing. In 2018 this has become a tough call. Google is dominating the market for search traffic, so maybe the best bet is to focus on your website and build it up over time as an authoritative site for your niche.
Getting customers to buy, order or subscribe is how a business creates revenue. While your website and social media presence may take up a lot of your time, you still need to focus on the business. And every business needs revenue.
There is a range of skills required to run a business.
You need to know what to do, be able to do it and take some risk. It may not work, or you may need to spend a bit of money to make it work.
For our older entrepreneurs, that means looking to exploit the commercial value of your skills and reaching out to your network, before the network falls away.
The business model I use has 5 components, shared by all businesses, large and small and that is to:
You can only be profitable if you can sell, and deliver enough product for more than it costs you to make or buy it, sell it and run the business.
If for example your revenue is $100 000 in a year and your cost to make or buy your product or service is $50 000 or 50% of your revenue, it leaves $50 000 or 50%. While it might be nice to take that money and have a holiday, it really needs to be spent on marketing and selling, running the business and the balance becoming profit.
How profitable your business depends on how you spend the money.
Spend too little on marketing and sales and revenue falls.
Spend too much on running the business and it eats into profit.
Plus, there is no easy figure to suggest to spend on your marketing, promotional and sales budget. To start with it may actually cost you quite a bit.
This is where the work gets done, where the rubber meets the road and decisions are made. The business model above gives you a clue to all the specific work that needs to be undertaken in running a business. And many small business owners are incredibly busy working in their business doing all five.
Marketing and selling your products or service, making the product or providing the service and administering the business.
Over a typical month, a single business operator is busy carrying out a full range of tasks.
Making the products, outsourcing them or delivering them, invoicing, collecting cash or payments, or chasing payments, making appointments, doing the accounts and so on.
All are important.
Marketing, Selling and Promotion In the digital world this means your website is an important platform to attract your potential customers.
Good, helpful, relevant copy on your website helps bring free (organic ) website traffic. We call this digital publishing and it is becoming more and more relevant to every business.
By publishing blog articles to your website, just like this article, also adds content to your site and helps focus Google on your products or services. On a regular basis it also brings Google back to your website.
Promoting your business through social media, putting together advertising copy, placing ads or paying for ads on Google, Bing or Facebook all take time, can be costly and may no longer work unless you have a large budget. There may be better ways than spending hard-earned money this way.
It takes about 18 months, or more, of constant work to build up a viable business, more so for start-ups, to make it survivable. Growth takes a bit longer. For an already established business, it might be a lot quicker.
Putting together quotes, proposals, meeting potential customers or clients, running the business, keeping up to date with your financials, the accounting and administration can take quite a toll on your time. It’s often hard to see how your business is going.
You can measure your business through revenue, sales, profitability and through your website or social media statistics. All provide useful information about your business and how it is going. The 3 stages that every business goes through survival, growth and to thrive, these can wax and wain too, and move around due to the economy and business confidence.
Profit is what is left after all the expenses are paid for out of revenue, not including taxes. In Australia, we only pay tax on the profit after all expenses are paid.
So your profit can consist of dividends, some funds for growth and a bit for the Taxation Office (approximately 30% of profit).
All this requires organisation, focusing on what is important such as marketing and delivering your product.
Neglect one and things go wrong.
Smartphones and apps, tablets, laptops, portable wireless devices, scanners, printers, wireless internet, cloud software such as Google for emails, calendars, documents and spreadsheets, using dropbox to share large files, using Xero for accounting where your accountant and bookkeeper can log in to check your accounts, online CRM programs, social media such as LinkedIn.
Now let’s refer back to the strategy where I wrote about what activities you undertake to make your business different. The choices you make at the start, understanding that you must market your business, that you must run the business using a business model and do all the things required.
You can do this all by yourself, and be very busy. This is known as freelancing. You pay yourself to do the work.
Or you can be an entrepreneur where you manage the projects and outsource the work. The idea is to build a business model and run it, scale it up as you grow and allow others to manage it. It all takes work.
If there are no hard parts then it is not likely to succeed.
Most mature entrepreneurs have had a lifetime of experience, and have a reasonably good network of friends and colleagues. Having worked in a larger organisation they may be unfamiliar when it comes to the entrepreneurial skills required to help their business succeed. But they tend to be more successful than their younger counterparts.
Don’t neglect your network.
But don’t just trade in a 9-5 job for another one of the same.
Make sure you choose something you want to do and plan for it and to enjoy it.