A marketing plan is part of a company’s business plan. It is composed of a comprehensive roadmap of a business’s marketing and advertising efforts.
For a particular timeframe, it describes the company’s activities in achieving particular marketing objectives. Although a marketing plan can have a formal format, it can be used formally or informally, making it flexible.
A marketing plan can also be considered as a strategy that can help your business decide on how to use your resources optimally to reach objectives.
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It is critical to have a marketing plan because it is one of the more significant parts of your business plan. For example, investors and lenders want to know how you plan to make money so you can repay them. As you begin your business or decide to put into place new ideas or products, a marketing plan can help you to:
analyze your customers’ needs and create an appropriate product or service;
communicate the characteristics of your good or service to your target customers;
determine your distribution channels;
establish the best ways to promote your business; and
detail your advertising.
If the marketing plan you come up with is a good one, it could help you answer crucial questions about your business and act as a reference guide to aid you in implementing your marketing strategy. Moreover, if done right, your marketing plan can act as a map for you to get your targeted customers and significantly boost your company’s success. To help you in drafting your marketing plan, try to use the marketing plan template below.
WHAT TO INCLUDE IN A MARKETING PLAN
Your marketing plan must comprehensively describe your thoughts on how to produce a good or offer a service that is distinct, innovative, and marketable. Although marketing plan templates can differ across the board, note that most marketing plans capture the same data in general. Indicated below are the typical contents of a marketing plan.
The Executive Summary answers the question, “What is my general plan?” This must contain the main points of your marketing plan. Even though you write the Executive Summary at the end, it is found in the beginning of the plan.
This summary is the very first thing that a probable investor or lender would go through. It is important that an Executive Summary indicates the highlights of every section of the marketing plan; be sufficiently interesting so that the reader would be motivated; and be concise. This is because there are some people who are not able or willing to read your entire marketing plan.
Here are the steps to writing your Executive Summary for your marketing plan:
Describe the product or service offerings. Write your products and services clearly and concisely. List every item and provide a short description on the use of the product or service in your company.
Indicate how long your company has been in the business. Also, include your yearly sales figures, consumers, and other accomplishments you want the reader to know. If your business is a new one, talk about the qualifications you would need to make it run effectively.
Talk about your partners and management. In addition, include their qualifications.
Discuss your company’s structure. Write the list of your various departments or if there will be or is a board of directors.
List the professionals you would be using in your operations. This would include lawyers or accountants, for example.
Talk about the objectives and the mission statement of your company. Focus on your objectives and mission statement for the future.
Incorporate a short statement. The short statement includes your marketing objectives and strategies and how these would be implemented.
The section on Target Customers asks, “Who are my customers?” Through your research, list in your marketing plan the demographic features of the individuals you want to be interested in your company, product, or service. You have to make sure that you do not sell to everyone. Offer statistics and assessments that prove to the reader that people would demand your product or service. This is particularly significant if you are just starting your business and are relatively new to marketing. If you know your target customers, you can give them more valuable and relevant products or services.
When you describe your target customers, include any or all of the following: (1) age range; (2) education level (last completed); (3) ethnic or cultural background; (4) gender; (5) household location; (6); income level; (7) interests; (8) marital status; (9) occupation; and (10) size and description of family.
Afterwards, you can even include important psychographic profile data, which can help you in different parts of your business like creative advertising, brand positioning, local markets, and advertisement placements. Some of the psychographic profile data are: (1) books; (2) hobbies; (3) lifestyle; (4) magazines; (5) movies; (6) television shows; and (7) websites
If you are targeting customers in the U.S., we suggest that you use the website of the Bureau of Labor and the Census Bureau to get information about your customers. Also, check out city-data.com for demographic information that is quantifiable.
After you define your target customers, focus on their preferences and needs by answering the following questions:
Which problems of the customers can you address?
What are the customers’ expectations and needs as related to your product or service?
What kinds of things do the customers want?
What do the customers want to spend money on?
Where do the customers shop?
How do the customers make their spending decisions?
Next, evaluate your target customers within the context of your product or service through the following questions:
Who uses or will use the product or service?
Why do they use or will use the product or service?
When do they use or will use the product or service?
How do they use or will use the product or service?
Take this opportunity to discuss how your customers view your product or service as connected to the products of your competitors or the solutions they make use of to solve a similar problem.
Afterwards, describe your target customers’ purchasing process with these questions:
What is involved in the customers’ decision-making process?
What kinds of information do the customers look for?
What is the timeline of the customers’ purchase?
Who really does the purchase?
What or who affects the purchase?
What are the market size estimates?
If you were able to identify and target your customers clearly and succinctly, this would allow you to be detailed in your advertising. As a result, you receive a higher return on your investment. Moreover, you get to speak the language of your target audience.
Unique Selling Proposition
This section on Unique Selling Proposition (USP) begs the question, “What makes your company stand out?” or “What is your selling proposition?” It is critically important to have a strong USP in your marketing plan because it separates your company from your competitors. The common denominator of many great companies is their USP.
Case in point, the USP of FedEx, “When it absolutely, positively has to be there overnight,” is very popular and is remembered automatically by customers who want their packages delivered quickly and reliably.
As you come up with your USP, remember that you do not need to appeal to everyone. Contrarily, you need a USP that is effective and attractive to your target customers or niche market. This would aid you in advertising and marketing your company beside your competitors as you aim to get a share of the market.
However, coming up with a USP is not as simple as coming up with a witty tagline. Creating a USP would need time and effort. You need to know your company and customers comprehensively. Moreover, you need to understand the fit of your product or service in the market.
Here are some steps to creating a good USP:
Define the target audience. Before you begin to define your USP, figure out your customers (as discussed in the previous section). Many new business owners want everyone to be their customers. This is a mistake. If you attempt to appeal to all, your company will merely blend in. Thus, focus on and research your target audience. Once you know your target customer, run it through a small group for testing.
Know about your competitors. So you can differentiate your business from your competitors, know who your competitors are and what they stand for. Research your business’s competitors comprehensively starting from their mission statement to their employees. You can only be different if you know what is out there.
Note the needs that your company answers. Write the problems your company or your product can help with. Does your product do something that comparable products cannot? Can it save time? Is it more affordable? From this list, remove those that your competitors can claim to have an edge with. Keep in mind that all businesses think that they are the best company and have the best product. Take the time to determine how your product can meet the requirements of your target customers that others cannot.
Remove the myths. Would your company or product be able to remove prevailing myths or stereotypes? For example, you want to open a watch repair shop. What is the stereotype that comes to your mind when you think of a watch repairman? You might come up with the image of an elderly gentleman wearing glasses, correct? If your market plan wants to go over this stereotype, use it to create a good USP. If you want your product to go against the usual or break usually held myths, use it to your advantage.
Make a clear message and mission. Connect your USP to the mission of your company. What does your company stand for? Once again, this question cannot be answered in one sitting — give it some time. As soon as you have an answer, check if your mission is parallel to the items that set your company apart. Once done, create a list of potential USPs that fit your company. Write a couple down, go through each one, and refine them. You need to have a clear message. As soon as you have the unique characteristics and the mission of your brand, you can begin to shape the information to a clear message. Manipulate it until you get just one clear sentence that can be your USP.
Bring life to your USP. As soon as you have a USP, think of how to give it life. Consider how you can turn that USP into a marketing tool. From slogans to mascots, packaging and website design, your USP must be present in each aspect of your company.
Pricing and Positioning Strategy
Your pricing and positioning strategy asks the question, “Given the position I want my company to have in the market, how much should I price my product?” The pricing and positioning strategy of your marketing plan details the positioning that you want your company to have and the pricing that would support it. So align your pricing and positioning strategy.
For example, if you want your business to be known as the brand in your market, having a very low price could stop customers from buying from you because of the perceived inferior quality.
As you price your products, give it careful thought. If you price them too high, this can turn off some customers. If it is too affordable, this gives customers the impression that your good or service is cheap and of low quality. Some businesses intentionally set a high price so their customers would feel they are actually getting a good product or service. A few sell at slightly higher than usual price to provide great customer service.
Simply follow the next steps to set up your pricing and positioning strategy in your marketing plan:
Establish your business goals. Note that how you earn money determines your marketing strategy. Here are some considerations for your business goals to determine your pricing: increasing profitability; improving cash flow; penetrating the market; increasing market share; raising revenue for every customer; beating the competition; filling in capacity and using resources; introducing a new product; reaching a new segment; increasing prospect presence; and raising prospect conversion.
Accomplish a complete analysis of market pricing. Make sure that the pricing strategy keeps in mind the market context of your good or service. If your product and market is wide with many players providing more or less the same products or services, you are most likely going to compete based on price. In this case, you have to keep your operational costs low so you can have a high profit margin. On the other hand, if your product or service has a high value, it may be more appropriate to put it on premium pricing. Whenever you have a superior product, you should focus on high quality customer service and marketing.
Assess your target customers. You already assessed your target customers in a different section of the marketing plan. Since you already know your target customers, make sure your promotional campaigns and pricing model is parallel with why your target customers would purchase your product or service. Case in point, if you have a high quality product that distinctly addresses the urgent needs of a customer, you can use value-based premium pricing as your best pricing strategy. If you do giveaways and create low cost promotions, this can confuse your target customers, cut into your value and profit margins.
Create a profile of your competition. The price point and pricing model of your competitors is an important consideration of your pricing and positioning strategy. First, identify your direct competitors. Name at least three. Evaluate their pricing structure. Do they have heavy discounts or component pricing? Do they group their products or services? In addition, think about what a customer might substitute with your product or service. Find out how your indirect competitors price their products.
Create the strategy. Since you already have enough information about your potential pricing and positioning, you can pick around ten pricing strategies:
Penetration Pricing – artificially low prices for breaking in the market
Economy Pricing – regular low prices focusing on low delivery and/or manufacturing costs
Premium Pricing – high price with high value
Price Skimming – start with a high price and once competitors follow, decrease costs and execute other pricing strategies
Promotional Pricing – discounts paid over a period
Psychological Pricing – pricing that creates action
Versioning – different levels of pricing for products or services
Sandwich Pricing – drive customers towards the item that is medium priced
Competitive Pricing – keep the price the same as your competitors’
Value Pricing – know the value customers put on the product and their willingness to pay
Your distribution plan asks the question, “How can I deliver my product or service to my customers?” Consider different approaches to reaching your customers and document them in this section of the marketing plan. Indicate what your delivery channels are and include your middle players. In addition, know how much the processes would cost.
In the topic of distribution, include three main areas to assess, such as the physical distribution of your product; the marketing channels to reach your customers; and the availability level of your product.
For physical distribution, note that if your product is unavailable when your customer needs it, your business will not succeed. The physical distribution of your company offers the time and place aspects of your product or service. In addition, consider the various functional departments that are needed by your product through its varying phases, including purchasing, production, warehouse, and marketing. Make sure that in all of these departments, the common goal is to deliver the final product at its best condition to your customer.
As for the marketing channels to reach your customers, what this means is that you have the responsibility of moving your product to your customers. Actually, there are more than a few companies that make use of many marketing channels to reach their customers, usually through one or more intermediaries.
The intermediary’s role is to offer the ability to achieve the biggest possible coverage of the market at a low unit cost. Many intermediaries keep the stock, thus also carry an amount of the financial risk. Although using intermediaries has benefits for you, it also has a downside in that you lose some control over your product. Moreover, there are instances wherein your objectives could be different from the intermediaries’, creating conflict. Hence, evaluate your intermediaries and make sure that they are efficient channels.
Try to ask the following questions before choosing an intermediary:
Do they sell or know the target market?
Are their sales adequate in size and training to reach our sales goals?
Are their promotional budgets and policies sufficient?
Do they satisfy the customers after sales?
Are their policies on their product consistent with yours?
Do they have competitive lines?
What are their policies concerning inventory cover and width depth?
How is their credit?
Is the management of their distribution proactive, open, and adaptable?
Your distribution plan also has something to do with how you treat your customers, otherwise known as customer service. So you can offer great customer service, you would have to note in your distribution plan if you want to heavily invest in the infrastructure of your company. Hence, there is a tradeoff between product delivery and customer satisfaction.
For example, if you want to hold a large amount of inventory so you can meet customer demand, you will be incurring higher costs for holding big amounts of inventory. To create a good customer service package, note the following in your distribution plan: delivery frequency; the time between order and delivery; delivery reliability; urgent deliveries, as needed; availability of stock and supply continuity; completed orders; non-availability advice; placing of order convenience; order acknowledgement; invoice accuracy; sales representation quality; sales representatives’ regular calls; stock levels monitoring; credit terms; handling of customer queries; outer packaging quality; stacking of pallets; readable use by dates; inner packaging quality for display and in store handling; new package or product development consultation; and regular product range reviews.
The question you must answer under this section is, “What can I provide my customers that would make them buy my product?” Offers are these unique deals so you can bring back old customers and win new customers.
Options for offers could be money back guarantees, free trials, discount offers, and packaging (e.g., combination of varying products). Although your company does not necessarily need offers, use them in general to increase your base of customers. Moreover, customers nowadays are more meticulous with how they spend. Not only are they searching for better products, they are looking for value for their money. So what kind of offers should you provide?
First, try to diversify and complement. Many businesses have gone through tough times by diversifying. For example, hair salons also offer beauty therapy; office-based firms rent their space to freelancers; building companies offer do-it-yourself training. The offer in this case is something new but complementary to your business that can bring in new customers. Think about incorporating this in your marketing plan.
Next, if you have tight funds, think of offering added value to your customers without having to purchase more equipment or stock. Case in point, you can provide free delivery for certain areas, technical support, weekend openings, exclusive offers to online shoppers, free returns, etc. These are offers that will not cost you much but will increase loyalty and customer satisfaction.
The Marketing Materials portion of the marketing plan template asks the question, “What materials would increase my visibility to my customers?” Marketing materials are items used to promote a company to present and potential customers. These could be brochures, websites, catalogues, product sheets, newsletters, letterheads, business cards, specification sheets, presentation folders, etc.
All businesses need this collateral to display their goods and services. In this section, indicate what marketing materials you need to be created or redone.
Whatever kind of marketing materials you choose to utilize, here are a couple of tips on using marketing materials and how you can indicate them in your marketing plan:
Find a stationary and logo package created professionally. Make sure that you do not change your stationary and logo for ten years, at least. This is so you can establish your brand image. You can hire a graphic artist or a design studio or hire an advertising agency. Do not do this yourself, even if you think you are very artistic. An artist who is a professional would ensure that your materials highlight your company’s personality, while having a professional and clean look. Make sure that they would look good in both color and black and white; that they can be reproduced in bigger or smaller sizes; that they can be faxed or emailed clearly; and the like.
Know the principles of good graphic design. You do not need to know graphic design comprehensively, but try to do some reading and have a good eye to analyze graphic design. Educate yourself by going through some graphic design books, for example. Note the basic design principles of keeping it simple and clean; not overloading anything visually; utilizing a graphic grid for alignment; using heads and subheads to help the reader; avoiding a lot of type; utilizing white space; staying away from too unusual formats; captioning all images; and avoiding tables and using graphs and charts.
Ensure that your materials are cohesive. Although not all of your marketing materials need to look the same, plan them as if they were part of a compatible group. In your mind, lay out your materials on a conference table. Do they look like they belong to the same company?
Put in the money for good photography. Many companies, particularly small ones, scrimp on good photography. Good and professionally done photographs can set you apart. If you have good quality photographs, customers would feel that your product is of good quality as well. If you use amateur pictures, it can damage your professionalism.
Appoint a person to be in charge of marketing materials. Remember that your materials need to always be updated given normal company growth, new markets and products, trade shows, etc. So have a person responsible who would expect future requirements, handle material production, and maintain stock. Materials that are not updated become less useful and frustrating. Remember that when you create a marketing material, have a rationale, a description of the audience, and an outline of the content.
The section on promotions begs the question, “How would you promote your business?” This is probably one of the more important parts of your marketing plan because you have to detail how you will reach your target customers. There are many promotional approaches, like television advertisements, press releases, trade show marketing, event marketing, and online advertising.
As you write your promotions strategy in your marketing plan, think of these options and decide what would be the most effective for your target customers. However, before anything else, plan your budget for every medium you would like to use, include the timeframe you have per medium.
Charity and Causes – This is an effective strategy to promote your products while you support a cause. Customers would feel good if they are giving to something bigger than themselves by simply using products they already use anyway, creating a win-win situation. You win customers and you get an image demonstrating that you are socially aware. An approach to go about this is to give a part of your product profits to a cause your business is supporting.
Contests – Contests are typically used as a promotional strategy. A number of contests usually do not need a purchase. The idea behind this is to promote your company and to place your name and logo in the minds of the public instead of just trying to make money using a hard-lined campaign. You can also sponsor contests to bring attention to your product without being too obvious about it.
Customer Appreciation – Have events to appreciate your customers, giving away door prizes and free food. This will draw in customers to your space. Emphasize that you appreciate your customers without a need to buy anything. This could draw in your current customers as well as potential customers. Set up product displays before the guests arrive to make sure the products you would like to promote are prominently visible.
Customer Surveys After Sales – By contacting your customers through email, mail, or phone after a sale could be a promotional strategy for you in that it shows that you place import on customer satisfaction. Some salespeople even make survey calls to get information, which could be used by marketing on how customers feel about their bought products and services. This serves a double purpose because while you show to your customer that you care about what they think, you are also trying to give the best product and service.
Customer Referrals – Customer referrals encourages present customers to refer brand new customers to your company. Discounts, freebies, and cash rewards are a few incentives. This promotional strategy uses your customer base as your own sales force.
End-Cap Marketing and Point-of-Sale Promotion – These are ways to sell your product and promote your items in a store. The rationale behind this strategy is impulse and convenience. The end-cap is positioned at the end of the aisle in groceries, featuring products that a store wants to move quickly or promote. The product is positioned so that it can easily be accessible by the customer. Point-of-sale is a method to promote new products that a store would like to move. These are positioned near the store checkout and usually bought by customers on impulse while they wait for their turn in the checkout counter.
Mail Order – Your current customers, if you already have them, must not be overlooked. These individuals have already bought your product. What could be helpful for you is to get some personal information from your customers. Give a free service or product for their information.
Product Giveaways – These allow customers the ability to sample your product or service. Many companies utilize this to introduce their new products. A number of these companies give away product samples or sponsor promotions inside stores to tempt customers to try their new products.
Promotional Branded Gifts – Give away usable but branded gifts, which can promote your brand more than simply giving simple business cards away. Put your contact details on an ink pen, a magnet, or a key chain. These are gifts you can provide your customers that they can use, which keeps your company in plain view instead of dropped in a drawer with the rest of the business cards or thrown in the trash can.
Social Media – Social networking sites like Facebook, Twitter, and Instagram provide businesses with ways to promote their goods and services in a relaxed space. This kind of direct marketing can connect your business to an arena of potential customers that can see your company from a different point of view. Instead of looking as if you are attempting to sell, social media can keep you in touch with your target customers personally. This could bridge the gap between your company and your customer, which can bring a more familiar and appealing view to your business.
Online Marketing Strategy
Your online marketing strategy asks the question, “How do I promote my company on the internet?” Nowadays, customers go online to look for and/or review new products and services. Hence, having a good online marketing strategy in your marketing plan can aid you in securing new customers and get that competitive advantage.
Here are the top highest performing online strategies that can bring more individuals to your sites, allowing you to connect to returning or new customers, and creating an online marketing strategy that works.
Correct Web Design – Although not so obvious, this can affect the amount of attention and time a user will spend on your website. Your site is the main space for your online marketing efforts. If your webpage is not easy to read, not clean, and not interesting, it does not matter how much effort you put into strategy development. You would lose customers. Design a website that grabs attention, is updated, and mobile friendly.
Search Engine Optimization and Marketing – Search engine optimization and marketing makes it possible for your website and name to show up to the top of the list of search engine results. When you have a good search engine optimization strategy, your company site will be connected to the main keywords of your choice. This raises the possibility of your business being chosen by someone surfing the web.
Affiliate and Associate Programs – These programs are not always suitable for all businesses. Nevertheless, if you make use of these, you may be able to see your marketing efforts be effective without doing much. Through affiliate programs, individuals who have belief in your business may share your information and increase your market based on a platform that is commission based.
Consultant or Coach – If you are not experienced in online marketing, get an online marketing consultant or a coach.
Email Marketing – Do not simply send emails. You have to consider having different email lists for particular customers and show a customized approach. Look carefully at the purchasing habits of customers and make use of the information for developing a strategy.
Opt-In Email List – The opt-in email list makes customers come to your business by signing up and getting email correspondence and campaigns. This can connect you to new clients or customers.
News Stories or Articles – When you have your company names and data listed on other web locations, this can grow your company. This also makes your company name visible in areas where your clients and customers are.
Online Press Releases – Whenever you make use of online press releases, you are releasing information about your company formally. This enables blogs, newspapers, and other sources to go through your information and write posts about your company or product without the need to connect and claim a story for your own.
Giveaways and Contests – People enjoy giveaways and contests. Whenever you promote marketing from customers through a free good or service, there is usually an increase in connections or purchases.
Blog – Use a blog to regularly post new keywords and maximize your strategy for search engines. Moreover, as you share information and offer advice, you truly connect with your customers. A lasting relationship with your customer starts with trust and blogs build on that.
Read on how Food Panda is designing its online marketing strategy.
Your conversion strategy in your marketing plan answers the question, “What do you do to turn prospects into customers?” These are the techniques you make use of to turn potential customers into paying customers.
For example, you can increase your social proof (these are testimonials of previous clients who were satisfied using your product). This would almost always increase sales and conversions. In this part of your marketing plan, indicate the conversion strategies you would utilize.
Here are a couple of strategies you could consider:
Map the sales process. Create a helpful diagram that maps every step in the process required to convert interest into sales. Track the actions that your company takes to prep for every sale. You would be able to study your sales procedures carefully from every viewpoint so that you can control and manage every step, convert more efficiently, and address usual customer concerns before they turn into objections.
Gauge the conversion rate. What is measurable is manageable. However, this means you must have an accurate measurement of interest or enquiries that have been converted to sales. As soon as you have measured your conversion rate, you can concentrate on increasing your benchmark performance. Since you measure what you are achieving, you get to focus on the main variables that will have an effect when you change it. It is not unusual for companies to raise their sales levels to twenty-percent (20%) just by concentrating on conversion objectives.
Qualify leads in the beginning. If you waste time on unqualified leads, this can affect your sales. Note that not all persons are prime prospects for your company’s products or services. You could be busy focusing on too many people, but if you do not focus on your qualified target customers, this could be problematic.
Go to the “big fish.” Successful companies find companies where there are “big fish.” They would speak to customers who already know their good or service, or currently use it, or would most likely use it. Do not spend time convincing people to use your good or service when there are plenty of “fish” or customers out there who know you already and are already partly sold on your business even before you make your pitch.
Package your offers. Good offers could increase responses to your product by three-hundred-percent (300%). Nevertheless, there are just a few businesses that go beyond letting their customers know about their offer. Many businesses assume incorrectly that customers already know their offers or are not interested. In fact, prospective customers need as much information as possible about your product so that they can make an informed decision. When you package your offer somehow in a report, a booklet, or a seminar and offer it as a way for prospects to get in touch with you, you will bring your prospective customers to you and would most likely make the sale.
Educate your customers. Offer your customers a complete understanding of the rationale of what you are doing, why you are selling certain products, why your products are better, and what benefits they would get from your products. If you educate your customers to understand the compelling reasons why they should act, your positioning becomes more powerful and the more comfortable your customers would be with your offers.
Design irresistible offers. Keep in mind that customers do not need you as much as you need them, especially since they have many choices available. You have to give them a truly big advantage to doing business with you. So make it practically irresistible for them to pass on your product or service.
Other conversion strategies are demonstrations, point-of-sale displays, winning awards, reprint and distribution of press articles, excellent guarantees, good sales management, consistent marketing messages, and putting together and using testimonials.
Learn how to design a irresistable offer yourself.
Joint Ventures and Partnerships
In the Joint Ventures and Partnerships part of a marketing plan, you would have to answer the question, “Who should I team up with to increase my sales?” Generally, these are agreements you make with other organizations so you can maximize sales with existing customers or reach new customers.
For example, if you sold shoe polishers, it would be great if you would partner with a shoe company who already has hundreds of customers to whom it sells to. Document these joint ventures and partnerships in this marketing plan.
How do you determine who to partner with? Think of what your customers do prior, during, and after they purchase from your company. More than a few businesses who sell these products or services may be viable partners. Write down the companies you are interested in, in this part of your marketing plan. Afterwards, attempt to reach out to them and secure them.
Joint venture marketing is a bit trickier than simply partnering with an organization; this is sometimes called a strategic alliance or co-marketing. This would bring together the strength of marketing efforts to increase sales and brand recognition. Moreover, companies can bring together their resources and assets like databases, employees, product lines, and market research. In addition, joint venture marketing does not have a large risk because both of the companies share in the risk, so they would both work hard to succeed.
Although there are many advantages to combining marketing forces, companies must keep in mind a couple of factors prior to going into a joint venture. First, there could be problems regarding fair play and competition. This is especially true if big competitors partner up, they restrict competition, making it challenging for smaller competitors to penetrate the marketplace. In addition, joint ventures must not break existing anti-trust laws.
The question that the Referral Strategy asks is, “How can you leverage your existing customers to get more customers?” Having a strong referral program for customers can help you succeed. Case in point, if one customer refers another customer, your customer base increase is always a constant.
Yet, you cannot get much growth if you do not have a formal referral strategy in your marketing plan. You have to determine the timing of when you would ask your customers for referrals, the reward you would give them for referring, and the like. Think of your best referral strategy and write about it in your marketing plan.
According to the Word of Mouth Marketing Association, in the U.S.A., there is an estimated 2.4 billion conversations related to company brands. People usually converse about the goods and services that they enjoy and their connected companies. Moreover, based on the New York Times, sixty-five-percent (65%) of new businesses are in the form of referrals. This means that two-thirds of customers usually buy because someone referred a product or service to them.
You can go about getting referrals through the following:
Ask for referrals. Although it sounds simple, this strategy works. Mention your referral program to as many people as much as possible. There was a computer repair business that always stamped, “We Crave Referrals” for every paper that their customers got. This included marketing materials, newsletters, even invoices.
Train your employees. Many businesses train their employees to market their referral programs to all customers effectively.
Use referrals from joint ventures. When you partner with businesses complementary to yours, you can promote to each other’s customers.
Note, however, that you must conduct some research first before you implement a referral strategy. First, discover what your customers would want. If the incentive to refer is not desirable or not worth anything to your customers, then they would not participate in the program. You as a business must also put a plan in place to know the process of credit referrals, the number of referrals required to get a reward, and tools that monitor referrals.
In addition, you must market your referral program publicly. You can have signs in physical stores (typically near the cash register). A typical strategy is to design brochures, which customers can bring with them at home, where they can think about it. Another way to inform people is through internet marketing (banner advertisements, email campaigns, email signatures).
Once you have implemented your referral marketing program, you have to continue the exposure of the referral program, including follow-up activities. Try to decipher which referral strategies have gained the most traction and focus your efforts on those strategies.
Strategy for Raising Transaction Prices
Try to answer the question, “What should I do when I want to raise prices?” Your strategy for raising transaction prices in your marketing plan considers how to raise prices that customers are still willing to pay for.
Here are the main strategies to raising your transaction prices: (1) increase the average transaction value; (2) raise your number of customers; (3) increase both the average transaction value and your number of customers. In order to achieve these three, you can include these techniques in your marketing plan:
Cross- and up-sell. It is perhaps the most effective and easiest way to increase the profitability and size of your sales by giving extra value or offering a better deal at point of sale. Cross-selling allows your customers to purchase an additional good or service that can result in a good outcome. Up-selling is giving the ability to your customers to buy more expensive, better, or sophisticated products that truly gives value to their transaction. If it were, an offer worth taking on, your customer would usually say yes thirty- to fifty-percent (30%-50%) of the time. The extra profit from the sales goes straight to your bottom-line because you did not take on additional costs to get to your customer.
Package products or services. Put together individually attractive products or services that complement one another that would seem an irresistible pull to your customers rather than purchasing them individually. This may increase your profits and gives you the ability to give complete solutions that would keep your customers locked into your brand. As you increase your profits, your customers get a simple buying process and a discount to a complete package.
Give bigger units for purchase. By increasing the size of the minimum purchase of your product, this is a strong and quick way to increase your transaction value on average. If customers usually buy a one-week’s supply of your product, give them consumption units of monthly, quarterly, or yearly at an advantageous but attractive price. Your customers would like the extra value, savings, and additional convenience in bulk buying. At the same time, you are increasing your average unit of sale and locking your customers to your product longer.
Increase the margins and pricings. Do not be afraid to increase your margins and pricing. Customers can pay more for goods or services if they know they are getting a good value. If your product or service is distinctive and if you inform your customers, then your product will seem higher in value. This is because higher prices mean that you could give better services to your customers, have more products or services available, and accomplish more than your competition.
Position your product or service up in the market. If you think that you have done well in your industry, move your product or service up in the market. Put yourself at the upper level of quality or distinction than your competitors. Case in point, you can repackage your product or service in order to pull in more affluent or sophisticated customers where you can ask for higher prices.
Promote at point of sale. Providing more products or services to each customer at the point of sale is the most convenient and quickest way to increase your average unit of sale. You could get their attention by putting in “impulse” products through literature, signage, or displays. You may also make offers more appealing during seminars or trade shows or give inducements when they make a first time purchase.
Raise horizontal penetration. Let your customers know about your full scale of products or services. When you inform them of your full scale of products or services using a straightforward matrix, you further penetrate into your current consumer base.
This section aims to answer the question, “How can I keep my current customers?” So many businesses spend a lot of their time and effort in getting new customers instead of investing the same on current customers that buy from them. By making your customers buy from you more often, you can raise profits and revenues.
Moreover, based on research from the U.S. Chamber of Commerce and the U.S. Small Business Administration, getting new customers costs 5-7 times more than retaining current ones.
In your marketing plan, you can include retention strategies such as customer loyalty programs or monthly newsletters. Here are some retention strategies that you can document in your marketing plan:
Set your customer expectations. Perhaps one of the first steps to build good customer retention is to set your customers’ expectations earlier. You can do this through service level agreements or SLAs, for example. In the SLA, make sure to under promise but over deliver. If, for example, in the SLA you note that any troubleshooting problems that are tagged as urgent will be responded to within an hour. However, in real life, you can respond to those problems in less than 10 minutes.
Become the expert. If you were an expert in your field, you would most likely keep more customers. Moreover, you would also be able to increase customer loyalty and decrease customer churn. Whenever you are a trusted source, your relationship with your customers can lead to reliance.
Create trust with relationships. People will do business with you if they trust you. So create trust so as to build a relationship with your customers. According to a study by the African Journal of Business Management, when trust rises, commitment also rises. The study suggests that you build trust via shared values. Shared values indicate that you take an interest in your customers and what they do. Research on them and what they do so you know your role in their regular activities. Use this research to build on your relationship.
Build an anticipatory service. The anticipatory service takes a proactive approach in customer service. Do not wait for problems to happen, but implement the anticipatory service that can get rid of the problems before they occur. So create a dialogue with your customers that prove that you respect their needs and preferences. For example, if you are a major airline, proactively contact your customers of possible flight delays; if you are a billing department, alert your customers if an invoice is almost due; etc.
Automate. If you are a company that uses automation, you are able to decrease downtime and make your clients’ networks work well. In addition, you are able to meet your commitment to your customers. If you standardize your processes, you could increase customer loyalty, raising customer retention.
Create online relationships. Many of your customers are probably online so begin to build relationships with them from this avenue. So build social profiles in Twitter, Facebook, and Instagram. Many of your clients, more often than not, have active profiles in these sites.
Execute customer surveys. You can eliminate customer disappointment by listening to your customers. Customer surveys are important in finding out whether your product or service is connected to your customers’ expectations.
The last part of your marketing plan asks, “How much is all the marketing plans going to cost and earn?” For your projections, you must incorporate all the information as indicated in your marketing plan. Case in point, incorporate the promotional expenses you might incur and the anticipated results from sales, profits, and new customers.
Although your financial projections would never be completely precise, use this as a tool to identify which of your marketing strategies and expenses would give you the highest return on your investment. Moreover, if you have good financial projections, you are able to set objectives as well.
Furthermore, financial projects are helpful if you are looking for financing. Through your financial projections, you can convince investors and lenders that your company would be profitable by giving them a good investment return.
There are three main parts to financial projections:
Income Statement – This would project how much funds your business will create through the projection of income and expenses, like cost of goods sold, sales, capital, and expenses. In the first year of your company life, you would need a monthly income statement. In the second year, you can just have quarterly income statements. For the next years, yearly income statements are sufficient.
Cash Flow Statement – This statement is more of a checking account register, yet goes into more information on how much income will go in your business and how much expenses will go out. For every period, whether annually, quarterly, or monthly, tally these to decipher whether you have a profit or a loss.
Balance Sheet – Your balance sheet will indicate your general finances such as equity, liability, and assets. Customarily, you will make a yearly balance sheet in your financial projects.
Make sure you project three years going forward to decipher what your break-even point is. This is when your company stops operating at a loss and turns a profit. Many startup businesses break even in the eighteenth month, but this point will differ base on your industry and business model. In addition, you must include other related documents that would further explain your financial projections’ assumptions.
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