Preparing a Marketing Plan

A lot of the analysis a business owner does is retrospective, but a marketing plan is all about the future. And it begins with thinking big. Rob Hartnett examines the many small steps needed to bring big ideas to fruition.

A marketing plan will help business owners attain two of the most important assets in a business, the brand and the goodwill built up over time. This is what people buy when they buy a business, be it a franchise, a new business, or a large corporation buying a small innovative business that has attracted a market they want.

What establishes that brand and builds that goodwill over time? Sales and marketing. Of course, I’m taking for granted that you have a quality product and excellent customer service. They are mandatory in today’s market, not options. However, I have seen too many great business ideas, excellent innovations, and too much high quality product out-sold and out-marketed by products of lower but sufficient quality. That’s the difference great marketing can make.

Here are examples of the key drivers of any business: There are seven ways to drive profit in any business and these are made up of either increasing revenue or decreasing costs. Five ways to increase revenue are to increase the number of leads, your conversions into sales, the average sales value, the number of times per year that clients buy, and the profit margin per sale. Two ways to decrease cost are to decrease the variable cost per sale and your fixed overheads.

The focus of this article on creating a marketing plan is the first five, so let’s have a look at how just a 10 percent increase across these five variables would impact on profit. Marketing can affect each of these five variables and so it is vital that you have a sales and marketing plan.

The great thing about a marketing plan is that it looks forward. Most business reporting you do in business is historical—BAS, taxation, management reports and the like, they all talk about the past. The marketing plan should contain what is going to happen in the future. It is a place where you need to be able to think big. So get excited about what might be, and how you plan to achieve it.

I encourage my clients to think ‘what could be?’. Don’t do a marketing plan on 10 percent growth. What about 30 percent or 60 percent growth, what would need to happen to make this a reality and, most importantly, what would it mean to you personally—a new car, a family holiday, less stress, more staff to reduce your workload? These are the important things in life. Sure, we all enjoy work, but really it should be a means to better ends.

At least run a couple of scenarios in your sales and marketing plan, such as one set of numbers on 15 percent growth and one on 30 percent, just so you can see what issues may prevent you from achieving these numbers.

As an example, I had a client who wanted 40 percent sales growth in the next six months but his current production capacity by his own admission could only sustain a 20 percent increase. Further research showed it would take six to eight weeks to hire the additional staff to deliver the extra 20 percent, so we kept the goal of 40 percent and just changed the timeframe to 12 months.

Start by defining your business. You and your salespeople need to be able to answer these three questions succinctly from a customer’s point of view: Who are you? What do you do? Why does it matter?

Then, define your customer. Who are your ideal customers? Can you define them, can you talk about how they live, what they do, and how your business comes into contact with them?

Develop your message. It is far more important to work out what we are going to say before we decide where we are going to say it. This is a common mistake of business owners who, for the reasons above, book ad space and then work backwards to create an ad that is usually due yesterday.

In my experience there are three ways that small business owners typically go about their marketing and advertising in Australia. To the question ‘why do you advertise here?’ I frequently hear these answers: we have always advertised here; we heard some of our competitors were doing it so we thought we better do it and not miss out; in the end we did it to get the sales rep off our back.

These responses are common and they usually occur because the business has not completed a marketing strategy. When you have an understanding of who your target market is, what their path to purchase is, and what your budget dedicated to acquiring these customers is, you can make a quick and objective decision.