Archive for Marketing Plan

71 Percent of Tweets are Ignored reported on the findings of an analysis of 1.2 billion messages sent in 2009, seven out of every ten Twitter messages get absolutely no reaction.

We just completed a marketing outlook survey for the CMO (Chief Marketing Officer) Council that seemed to leave out many aspects of “traditional” marketing.

So the question is if numbers and results are revealing that email open rates are 22% and click through rates are about 5%, why do these and other marketing methods get so much attention?

Genetics Affects Survey Response

Genes are responsible for 45% of the variance in people’s response to surveys, according to a survey of more than 1,000 sets of twins. “There is a pretty strong genetic predisposition to not respond to surveys,” says lead researcher Lori Foster Thompson of North Carolina State. The paper, “Genetic underpinnings of survey response,” was co-authored by Dr. Zhen Zhang of Arizona State University and Dr. Richard Arvey of the National University of Singapore.

It will be interesting to learn if genetics plays a role in other types of response, including response to direct mail.

How Much Should You Spend?

Business Week published an article titled, “What Should You Spend on Advertising?” Instead of seeking a rational answer to the question, many just ignore it and hope it will go away.

Most emerging companies focus most of their time and talents on meeting the needs of customers, which is a great strategy. If they don’t take care of the customers they already have, everything else will go away. However, many neglect the function of winning customers in the first place. Others naively assume that if they simply provide excellent products or services, their reputation will precede them. Call it the “build a better mousetrap” syndrome. But the world has too many other things to do with its time than beat a path to your door. That means you need to structure your profit-and-loss statement in such a way that you can profitably allocate a reasonable percentage of your revenue to marketing.

The Big Question: How Much?

While there is no definitive answer as to how much any business should spend on marketing, there are general guidelines any company can use to develop a formula that works for them.

Your first step should be to try to find out what the advertising-to-sales ratio typically is in your field. Public companies in your industry may give a figure for their marketing spending in their financial statements (found in their annual reports). With a simple calculation, you can figure out what percentage of their overall revenue that represents. If you can’t find any public companies that seem similar enough to yours, you might want to start at 5% and then adjust your projected spending up or down based on the size of your market, the cost of media, what you can learn about how much your competitors are spending, and the speed at which you’d like to grow.

You’ll also need to ask yourself if your business is built to leverage volume or to leverage margin. Even within industries, there are differences in the marketing spend of volume-driven companies compared with margin-driven ones. Volume-driven companies tend to spend a tiny percentage of sales on marketing, in part because their large revenues enable small contributions to add up fast, and in part because of the margin pressures they face in having to compete with other high volume companies. By contrast, margin-driven companies tend to spend a larger percentage of sales on marketing: They have room in their margins to afford it, and they’re often working from a smaller revenue base.

The retail industry provides some good examples. While Wal-Mart might spend a meager 0.4% of sales on advertising, the sheer size of the company turns that tiny percentage into a significant budget. Wal-Mart’s nominally higher-margin competitor, Target, spends closer to 2% of its sales on advertising, while Best Buy, as a specialty retailer, spends upwards of 3%. Finally, more upscale stores like Macy’s typically spend close to 5%.

The same kind of ratios can be seen in the car industry (automakers’ generally spend 2.5% to 3.5% of revenue on marketing), liquor (5.5% to 7.5%), and packaged goods (4% to 10%).

If you’re in a services business, you might want to bump your starting point higher than 5%.

Marketing, Not Just Advertising

It’s important to make a qualification here. Giant consumer corporations such as automakers, packaged food manufacturers, and retail chains spend a huge percentage of their marketing dollars on paid media advertising, the most visible (and expensive) tool in the marketing toolbox. Depending on the size of your company and the business you’re in, advertising might not be the right (and certainly not the only) tool for you.

For a variety of reasons, media advertising might not be right for your company either, but direct mail, events, vehicle wraps, point-of-sale displays, or other tactics certainly could be.

The important thing is intentionally and deliberately to set aside some rational percentage of your sales to get out there. That way, the question you have to answer isn’t “How much should we spend?” but rather, “How do we spend most effectively?”

Five Marketing Steps

A refresher for some of you and perhaps a fresh outlook on some basics.

Step 1: Understand your customer

See other posts about segmentation and definition

Step 2: Create value for your customer

  • Focus on product or service features
  • Enhance the social skills of your employees
  • Use price as an additional customer value
  • Provide credit or payment terms to meet the needs of your customers
  • Enhance the image of your product, service or store
  • Provide service, before and after sale
  • Think of your location as another service for your customer
  • Present convenience
  • Set a mood with the atmosphere of your place of business

Step 3: Communicate your value to your target market

  • Everything you do communicates
  • Word of mouth is critical
  • You never get a second chance to make a first impression
  • Keep it simple

Step 4: Make it easy for the customer to buy

  • Set hours of operation that are convenient for customers
  • Make credit readily available
  • Select convenient locations (for retailers)
  • Find good retail outlets (for manufacturers)
  • Deliver products to customers in a reasonable and timely manner

Step 5: Create long term relationships

Creative Planning To Strengthen Your Marketing

Target Marketing Magazine included some great tips and considerations for creative planning as a part of suggestions for campaign planning meetings. We want to help you think about these as you plan your Direct Marketing.

The Offer

Remember, an offer can be a full-price product with special value.

  • Why was it created?
  • What problem will it solve for your customer?
  • What are we asking the customer to do?
  • What is the overall strategy?
  • What are the goals in terms of response rate or overall sales, and how is the offer going to help reach those goals?

The Audience

  • Who is getting this piece, and what is his relationship to your company? The message that you send to a customer should be drastically different from the message you send to a prospect, who may not even know who you are.
  • Think about the individual person behind the demographics. What will motivate him? What is his attitude toward what you are selling?
  • What key words can you use to speak directly to his needs?

The Brand

  • Your brand isn’t your logo; it’s the consumer’s perception of your company. How can you remind—or for a prospect, introduce—the recipient of your unique point of differentiation?
  • How can you prove that you are delivering on your brand promise?
  • What words and visual cues can you use to reiterate your brand?

The Format

  • What is the format, and why was it chosen? This is especially important to explore when using a solo package including multiple components. Explore each component, discussing the hierarchy of each piece.
  • Can the format be improved? Your production manager may be able to explain important options and opportunities as ideas are generated.

The Creative

  • What visuals will help grab attention and quickly explain your offer?
  • Where are the hot spots in your format, and how will you use them to your advantage?
  • How will you exploit an offer and make sure it is seen?
  • How many times will the offer be repeated and where?
  • How will the recipient process the piece—what will he look at first? If it’s a mailing, how will the envelope entice him to open it? If it’s a postcard or e-mail, how will you identify or introduce yourself at a glance and answer for the consumer, “What’s in it for me?”
  • What copy will intrigue the reader the most?
  • How much copy will be required and at what ratio to images?
  • How can you show value in every product? Is it necessary to include additional insets or callouts to showcase benefits?
  • Review the creative and production schedules: Who will work on the piece first; who will work on it second?
  • What is the proofing and editing process?
  • Together, create a list of must-haves: phone number, URL, fax and registered trademarks.
  • Are multiple versions necessary to accommodate different 
customer segments?

There is no guarantee that your project will run smoothly from beginning to end, but with the right planning—an understanding of the offer, audience, brand position, format and creative strategy —you have a head start. Take the time to talk through all of these points before the design process begins, and your program will generate better results.

Ideas to Define Your Brand

We have posted a few articles about branding and why it is so important in marketing. We thought it might be helpful to suggest some ideas to help you refine and define your brand.

What is a brand?

  • the outside view of the company, product or service.
  • the sum of all relationships between buyer and seller.
  • the most important asset that the organization owns.
  • the symbolic embodiment of all the information connected with a product or service.
  • the set of expectations associated with a product or service.
  • what leads customers to choose you over the competition.

Questions to get your thinking started

  1. What do your employees think sets your company apart?
  2. What is your company best at?
  3. What are your core strengths?
  4. What do you offer that one else offers?
  5. What do you love about your business?
  6. What makes your employees proud?
  7. Why has your company been able to stay in business when others have failed?
  8. If your company were to close, how would you want to be remembered?

Every contact or interaction with your customers and prospects is an opportunity for you to communicate your brand

  • Sign
  • Building
  • Letterhead and business cards
  • Packaging
  • Company vehicles
  • Staff attire
  • Advertising
  • Direct Mail
  • Web site

What do people (customers, prospects, audience) experience with your:

  • Product or service
  • Pricing
  • Customer service
  • Employee attitudes and actions
  • Atmosphere of your place of business
  • Role in the community

Now that you have a clearer idea of who you are and what you are all about, how can we help you share it? Direct Mail is a great way to reach the people who most want to hear from you.

Help Your Brand Stand Out

Andrea Syverson suggested some ideas in Target Marketing Magazine to get you started in your thinking about how to differentiate your brand.

We like to cheer for the underdogs, they try harder. These “underdogs” seem more comfortable in their own brand skins. They are original. They are daring. They are independent thinkers.

What about your brand? I bet your customers know the answer.

Stand Out from the Crowd

What are the differences between the many companies jockeying for customers’ minds and market share these days? Is there a difference between OfficeMax, Office Depot or Staples? What differentiates Barnes & Noble from Borders?

What is different between your offering and your top two competitors? If your brand is sandwiched blandly between others, it’s time to rethink both your brand positioning and your merchandising concept. Don’t bore your customers with this sea of sameness. They deserve better.

There is no formula for authenticity. Either you are authentic or you’re not. Unfortunately, we have become accustomed to living in a faux society, where entertainment is disguised as news, celebrities are disguised as heroes and Internet connections are disguised as relationships. And, yes, there are faux brands and transaction-based companies focused on themselves and short-term profits.

In “Authenticity: What Consumers Really Want,” authors Joseph Pine and James Gilmore propose that authenticity is a completely new management discipline, and they outline three axioms for authenticity:

  1. If you are authentic, then you don’t have to say you’re authentic.
  2. If you say you’re authentic, then you’d better be authentic.
  3. It’s easier to be authentic if you don’t say you’re authentic.

This may seem simple, but it isn’t. Many brands fall back to being faux. It’s easier.

Authenticity in Action

Consumers crave the real deal. They desire companies that deliver on their promises and brands that listen and do what their taglines say they do. They seek independent thinkers, product creativity and originality in solving their problems. They want brands that respect their time.

Authentic companies have one thing in common: They are true to themselves. They beat their own drums. And, most importantly, their customers thank them for it.

Steven Covey, best known as the author of “Seven Habits of Highly Effective People,” writes:

The more authentic you become, the more genuine in your expression, the more people can relate to your expression and the safer it makes them feel to express themselves. That expression in turn feeds back on the other person’s spirit, and genuine creative empathy takes place, producing new insights and learnings.

We believe the same is true of brands. Authentic brands are infectious. They draw people in. Authentic brands stand out. Authentic brands feed people’s spirits. They give customers what they crave today: realness.

So, how can we help you communicate your authentic brand message?

Prepare For the Upturn

Many people are hurting and according to most experts it is going to take a long time for the employment rate to pick back up. However, just as it took a very long time for people to admit that our economy was not good, things may be better than we think.

In October of 2008 I looked at what was happening in the economy and tried to understand what many people were saying and why they said it. I looked at a history of recessions in the U. S. since the early 1900’s. Today I looked at the economy from the other perspective, focusing on the periods of growth and prosperity; believing that the glass is half full, not half empty.

I found details about the US Gross Domestic Growth Rate (GDP) going back to 1947. A negative GDP for two or more quarters is what defines a recession.

When I look at the chart I see:

  • Times have been good much more often than times have been bad
  • It looks like the worst is over and we are moving into another growth period
  • Perhaps the recent decline would not have hurt so much if growth in 2006 was not so big, I think we thought the good times would go on forever

What about your strategy right now? This is a great time to start cultivating new prospects. Get your name, your products, your solutions in your customers minds so that when they are ready to buy, you will come up on the short list. Think about sending mail.

Should you alter your marketing plan to prepare for the upturn?