Expectations are increasing. Advertising is struggling. Add to this a strong dose of competitive intensity and an over-communicated society that has learned to filter most messages and you have a wicked problem. While this sounds like a pessimistic view of business today, this is the business environment we work in day in and day out.
We live in an oversupplied economy where product and service selections are abundant and many businesses resort to discount pricing as the weapon of choice to grow revenue while profits slowly erode. Unfortunately, only a few companies can effectively compete long-term as the low price supplier. The rest see profits dwindle and their very existence threatened.
Today many companies implement "me-too" marketing programs that are based on nothing more than repeating last year's activities and doing what everybody else seems to be doing. Or in some cases, small business owners take a wait-and-see approach to marketing their companies and never find that right moment to move ahead with the new marketing idea or program. When small businesses do take a bold step forward, they often offer better "sameness" rather than a compelling positioning and distinction in the marketplace. The result is mediocre performance, eventual price discounting and profit shrinkage.
It does not have to be this way. In fact, small businesses have a unique opportunity to take advantage of their "smallness" and be a large fish in a small pond. Delivering high value and generating loyalty rather than getting lost in the lake of low prices and being classified as a commodity. It is surprising to discover that 84% of marketing programs today are ineffective. There is no clear market target and certainly no persuasive position that these marketing-deficient companies can claim. The good news is that small businesses have the flexibility and the capability to avoid these ineffective marketing efforts and develop a winning marketing program that delivers increased profits and long-term existence in our hypercompetitive world.
Sharpening the Focus
Whether you are a one-person shop or a multinational conglomerate, one thing is true: you cannot be all things to all people. If you attempt to go this route, you will chase after a market that will not return a profit and you will throw money at ineffective activities. You will be defined as a company that does it all, but does nothing extraordinary. You will be moved into the category of "also ran" and become irrelevant.
Sharpening your marketing focus is the first step to breaking out from the competitive pack and establishing a clear position for your business. There are four steps to sharpening your focus and each is fundamental to all businesses—whether a manufacturer, financial services company, or a dry cleaning business. These four initiatives are what pave the road to intelligent marketing—marketing that is effective and efficient and is continually building value into the business.
Plan
Most small business owners and entrepreneurs chose not to plan. Planning sounds difficult, time-consuming, and downright boring. After all, running a business consumes all of the daylight hours and most of the night as well—there is no time for planning. Although this point about "no time for planning" has a lot of truth to it, the risk of flying blind is too great to leave to chance. While your competition would like its activities to generate a return, your written plan turns your marketing into a planned investment rather than a hopeful risk.
Creating a marketing plan can be done relatively quickly and provides for a clear direction for your business. Guerilla Marketing guru Jay Conrad Levinson offers up a "down-and-dirty" marketing plan created in seven sentences. The seven basic steps include:
1. Define the purpose of your marketing.
2. State the benefits of your product or service.
3. Select your target audience.
4. Describe your niche.
5. Identify the marketing tools you will use.
6. Articulate your identity.
7. Create your budget.
The purpose of your marketing defines what you will use to measure the success of your marketing efforts. It is usually a measurable item such as the number of new clients in the next three months, or the number of new business leads generated. When you assign specific numbers to your marketing program, you have the ability to see if what you thought would be a good idea really is a good idea—in other words, "How effective was your marketing program?"
When stating the benefits of your product or service, be sure to focus on benefits that your target audience will experience. Many companies confuse features with benefits. Features are inherent in your product or service. Benefits are what the buyer gets from your product or service. Your bookstore may be open 24 hours (feature), while the buyer sees convenience (feature) that motivates her to be your customer.
Planning is all about anticipating future events and defining a direction for your company. A good plan is easy to understand, clearly links objectives to strategies, is specific and measurable, and has flexibility. As pointed out earlier, an effective yet brief plan can be written in just seven sentences. Using this approach, planning is straightforward and relatively quick.
Target
The best marketing is customer-focused. It gets through the clutter and communicates directly with the intended audience. Selecting a profitable target market is a fundamental element of intelligent marketing. It allows you to focus on a specific group of buyers that share similar characteristics (needs, benefits, desires, values, attitudes, etc.) so that your marketing efforts are effective and efficient. Rather than speak to the masses, you are speaking to the individual's needs and providing the facts and motivation for the buyer to act.
Defining your market target can take on various forms. If you are not sure where to start, take a look at your existing customers. Who are they? What common characteristics do they share? Is age or income a common factor? Do they live in the same region or have the same level of education? Perhaps they all have a keen interest in outdoor activities or adventure sports. Or, they share a common belief or have the same buying tendencies.
The primary types of market segmentation, a precursor to defining your target audience, include geographic, demographic, and psychographic segmentation. Geographic segmentation refers to defining your target audience by its physical location (e.g. city, region, state, country, continent, etc.). This type of segmentation is broad and can be used as a starting point.
Demographic segmentation is one of the most common methods of segmentation for several reasons:
1. Demographic data is readily available.
2. The data can be compared across regions, buyers, and other criteria.
3. It is inexpensive to acquire.
4. It is well recognized and defined as a segmentation practice.
Demographic segmentation categorizes people according to their age, income, education, marital status, career type, race, religion, ethnicity, gender, and other factors.
While geographic and demographic segmentation practices are fairly well known, psychographic segmentation is not as widely practiced, but is a powerful segmentation method for consumer markets. Psychographic segmentation considers the "softer" side of the target audience and attempts to identify the shared values and beliefs held by the audience. Although we can use demographics to define a person who is 35 years old, married, and has a college degree, we cannot appreciate that person's attitude toward specific causes, activities, and lifestyle choices unless we consider psychographic analysis.
Psychographic segmentation was developed in the late 1970s as a method to capture a "deeper" understanding of consumers in an effort to better understand their aspirations, personalities, and desires. Using psychographic segmentation can translate into marketing that builds confidence and gets through to the target audience at a deeper level.
While the above segmentation techniques are common for consumer goods, businesses that sell to other business may use a segmentation technique referred to as corpographics. This type of segmentation considers the organizational characteristics including type of business, revenue, SIC classification, number of employees, markets served, and other attributes that define the business.
Selecting a profitable target market is a prerequisite to most other marketing activities. If the target audience is not properly defined, marketing efforts will struggle. Philip Kotler, a leading marketing professional and educator at Kellogg School of Management, sums it up nicely when he says, "If you can nail targeting and positioning, everything else will fall into place." Targeting your marketing efforts to a select group will not only return better results, but also cost less over time.
Position
It's not your image or a façade. There is no marketing gimmick or trick. Positioning is the place you hold in your target audience's mind and it is powerful. With your position, you have an opportunity to stake out a distinct place, to make an imprint in the heads of key stakeholders to define who you are and what you are known for. Too many small businesses try to be everything to everybody. There is no clear or compelling position they hold in the consumer's mind. "We do it all" is not a good position to take as it infers that you do nothing well.
I recall a visit from a sales rep from a printing company. This meeting was an opportunity for the sales rep to give an overview of her printing company. I was unfamiliar with the printer and after the small talk ended and the company presentation made, I asked, "So what is it that you do really well?" The sales rep replied, "Oh, we do it all! 2-color, 4-color, 6-color, short runs, long runs, design, mailings. You name it, we do it!" I understood that the printer had a great deal of experience and breadth in its offerings, but I was searching for that golden nugget—that unique position that the printer held that no one could match. I asked the sales rep again to tell me what she considered were the printer's greatest strengths. I received the same reply, "We do it all." Needless to say, I did not need a printer who could do it all. I needed a printer who could do one or two things extremely well—better than anyone else. This company presented no compelling reason for me to look any further. It was not for me.
A positioning consists of one, two or three words, phrases, or sentences about your company that you want to carve out in your target audience's mind that is uniquely yours. It should be clear and to the point, leaving nothing to interpretation. The key to great positioning begins with a visceral understanding of the needs, problems, and pains (motivations) of your target audience. With this understanding, you can create a product or service that offers true value and strikes a responsive chord in the mind of the buyer. Knowing your audience is a competitive advantage, and small businesses have the upper hand when it comes to knowing their audience. Take advantage of this position and clearly communicate who you are and why your target audience should own what you are offering.
Implement
After writing your marketing plan, selecting a profitable target market and defining a compelling positioning, you need to do something with it. That something is called implementation and this is where many small businesses begin to lose steam. A great strategy can make for great returns. But implementation is what allows the strategy to develop into excellence. A poor strategy cannot be improved by top-notch implementation. It is also true that brilliant strategy cannot achieve business success without proper implementation.
If the marketing plan is the car and strategy is the fuel, implementation is the accelerator that makes the car move forward and go where you want to be. Implementation is also what gives you the opportunity to measure the impact of your marketing efforts and determine if your strategy worked as you intended it to.
Intelligent Marketing in Action
The best marketing begins with the end in mind. It is based on a deep understanding of the target market and solid planning. There are no shortcuts to cost-effective marketing. Intelligent marketing is based on a well-defined position and builds confidence with all marketing activities—whether a service call, a brochure, a website, or a proposal. People buy solutions to their problems—benefits not features.
Intelligent marketers understand their target audience's motivations. Based on research and knowledge about their target audience and the market environment, they consistently outperform their competition. Rather than base their decisions on gut instinct or intuition, intelligent marketers take the time to understand their target audience, define their position, and cut through the clutter to effectively reach their audience.
At the same time, they have the flexibility to adjust marketing programs and quickly respond to new opportunities or threats that arise. It is not about fancy adjectives, hot new features, clever headlines, or full-page ads. Effective marketers know their target audience and help the potential buyer realize the merits of owning what they offer. Put the power of intelligent marketing to work for you and uncover the secrets of cost-effective marketing for your business.
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