Starting a business isn’t an easy task. According to the Bureau of Labor Statistics, 20% of all new businesses fail in their first year, and about half of them go bankrupt in their fifth year. The causes of this high failure rate are multiple. Some of the most common reasons why new businesses fail include lack of planning, poor leadership, low quality products or services, and not having a clear vision and a marketing plan.
A solid marketing plan can make all the difference in surviving and even thriving in such a competitive environment. This article shares a few things you should know for being able to develop a marketing plan that works. Feel free to take these tips and to adapt them to the specific of your business. Furthermore, keep in mind that even the greatest marketing plan of all times may fail, if you don’t implement it the right way.
What Should You Put in Your Marketing Plan?
The ultimate purpose of your marketing plan is to provide you with an effective working tool to unfold your business activity. It needs to include information about your target market, your marketing goals, a competitive analysis of the market, your Unique Selling Proposition, your estimated volumes of sales over a 3- or 5-year period of time, the estimated evolution of your market share, and the marketing activity plan.
The Customer – One of the Pillars of a Good Marketing Plan
Your business couldn’t exist without customers. Since they are the ones who make you money, it makes sense for you to get to know them as well as possible, in order to find out what they need and how they shop around for products or services like yours.
First of all, you need to determine the demographic segment with the highest odds of buying your product or service. If, for instance, you sell environment-friendly feminine hygiene products, you won’t want to advertise to men or to very old women, as they don’t have a real need for your product. In this situation, your core target market could be women, 25-45 years of age, educated, and with a strong sense of belonging to their community.
This means that you should direct most of your marketing efforts, and therefore your marketing budgets to this category of individuals. They are the ones who are probably going to make at least 80% of your sales, so it makes sense to spend most of your advertising dollars to attract them to discover and try your products. The main point of your marketing plan is to find the most effective ways to make your products known to people who need them most and who can afford them.
The best way to get to know your best customers is to mingle with them, to ask them questions, to quietly observe them, and to interact with them on social media. As you start to understand what makes these people tick, use your acquired insight to develop a profile of this individual. Imagine this person in detail; what are their hobbies, their lifestyle, their preferred social networks, their favorite shops, and even the colors they like the most.
The Unique Selling Proposition
Every day, consumers are exposed to millions of messages. Out of all these, why would they choose yours? Furthermore, out of all marketers offering products or services similar to yours, why would these customers choose to buy yours?
The Unique Selling Proposition (also known as USP) is that thing only you can provide. This is what makes your business stand apart from the crowd. Your USP should meet the strongest need of your potential customers. If your product promises to solve one of their most important problems, people are going to buy it. It comes without saying, though, that you shouldn’t lie. If you fail to meet the expectations of your customers, you’re not going to be around for too long.
The Market Potential & Your Marketing Goals
No matter how amazing your product or service, you won’t be able to sell more than the market can absorb. This means that you need to assess the market potential, and only after that decide upon your sales volumes. Also, keep in mind that you won’t manage to grab a big market share within your first year, so keep your goals within a reasonable range.
The SWOT Analysis
The SWOT analysis is a powerful tool to assess the opportunity of entering a certain market. It involves taking a closer look at the Strengths and Weaknesses of your brand, as well as at the Opportunities and Threats of the market.
An exhaustive market analysis should allow you to set the right price for your product or service. Ideally, you should find the sweet spot, the price that would enable you to get the biggest sales value. If you price your goods too cheap, you’ll probably sell more in volumes, but you won’t score a nice profit. If you aim for very high prices, you won’t be able to sell enough to meet your profitability goals, as very few consumers will become paying customers. Finding the right price requires strategic thinking and extensive market and consumer research.
The Marketing Budget, the Activity Plan & the Marketing Channels
Your marketing budget should be in line with your estimated sales values. Once you know how much money you can afford to spend, you need to decide how you’re going to spend it.
Basically, you have to understand the consumer buying cycle and to hit these potential clients in the purchasing stage, when they already know what they want and they actively seek for the best offer.
You should direct most part of your advertising and marketing money toward the favorite channels of your target audience. If they watch TV, find out what are their preferred channels and advertise there. If they read news, find out what news websites they use, and buy ads on those pages. If they are on Facebook, be there for them!
This is only a brief guide to creating a marketing plan for your business. Feel free to use it to design your own marketing strategy and to lay down the foundation of a successful business your local community will love.