You just launched your business. You make all the operations, finance, and marketing decisions. But how well do you really know your market? Are you doing everything you can to maximize ROI from your campaigns? Many people think they know their market all too well, unfortunately, that is not the case. In this post, I will discuss the various steps you should consider to better understand your market and hopefully maximize your return. The biggest pitfall is lack of planning because people don’t take the time to layout a map of what they need to do. That is why I’ve developed an outline for you to consider when planning for your own business.
Step 1 – Know Your Environment
The first thing you should do is prepare a situation analysis. You should firstly start by looking at past business and marketing plans. The whole point to this step is to analyze your environment. This includes identifying competitors, the various macroeconomic factors that impact your environment and the various driving forces behind these changes. Typically, the driving forces affect legal, technological, and market related factors, so you should be aware of how these changes will affect your environment and hence ability to sell. The next step is for you to prepare a SWOT analysis of your own company. This is an effective tool to analyze your company’s internal strengths and weaknesses, and your external opportunities and threats you could face. One of the most important parts is to consider your competitor’s strengths and weaknesses since that will ultimately help you identify your own competitive advantages.
Step 2 – Objectives
After you understand your environment, your next step should be to formulate your objectives. Your objectives should be unambiguous and very specific. Each objective should cover three broad aspects: What are you trying to accomplish, what and how much do you need to get there, and a specific time frame. Essentially, this ensures your objectives are SMART (Specific, Measurable, Attainable, Realistic, Time bound). An example would be: Increase online sales by 25% by the end of Q1 09. Knowing your objectives means knowing exactly what you want to do.
Step 3 – E-marketing Planning
After you’ve established where your company is and where it should be going, you must prepare the strategic planning process that will outline how your company will get to where you want it to be, that is, to accomplish your goals. You should then conduct a Market Opportunity analysis which includes demand and supply analyses for segmenting and targeting. The demand analysis evaluates the potential profitability and sustainability of potential market segments. The segment analysis should draw conclusions about the characteristics about your target market, including the demographics, psychographics, and past behavior of consumers with similar products. By doing the Segment analysis, you can determine the level of demand for your product or service and you can better anticipate behavior. You can also tailor your product to conform to your target markets needs you have identified. The next thing you should do is consider how you’re going to differentiate your offerings and how you plan to position your product, services, and brand against your competitors in the target market.
Step 4 – Marketing strategy
The next step is for you to develop strategies regarding the 4Ps. You should outline specific plans regarding your product offering, your value proposition (price), how you’re going to distribute your offering (place), and how you’re going to effectively promote it. One of the most important parts to this step is your value proposition. You must consider the margins you think are fair by deciding how much you are going to charge, and you should also have done some simple financial calculations such as breakeven points, NPV, and IRR so you have a better idea of what price to charge. By taking the time to plan, you can better forecast future cash flows and mitigate capital shortages and also even determine if your goals are realistic. You should charge a price as close to the industry equilibrium or try to differentiate your price based on value added.
Step 5 – Budget
This is one of the most important parts in your marketing plan. Here you should try to forecast the revenue in units and dollars you will receive from each of your revenue streams. Also, don’t forget to consider intangible benefits as they count as well. It is important to be reasonably conservative (especially forecasting near your launch or at the first level of your product cycle) because most of the time revenue is materially less of what was first expected. You should also carefully consider your expenses, including marketing, operating, administrative, technology and other expenses. Expenses are also usually more than you first anticipate, so plan accordingly. You should then calculate the return on investment (ROI) and the internal rate of return. These results will tell you if what your doing has potential and if you should pursue your business idea. Just remember, not all businesses are initially profitable, it may take some time, just ensure you have the required capital to be successful over time.
Step 6 – Implementation
This step is all about what you’re going to do to accomplish your objectives. There are a variety of marketing mediums, including online marketing, direct marketing, website advertising partnerships, etc. There are endless possibilities to begin implementing your plans and to promote your products/services; you just need to choose what’s best for your offerings based on price, value, and simply what’s appropriate.
Step 7 – Feedback
Feedback is extremely important. You should implement various performance metrics to help you evaluate your progress. You can do this effectively by developing a Balance Scorecard with all four dimensions, including the Customer, Internal Financial, and the Innovative/Learning dimensions. For each dimension, you should come up with a goal, and how you can measure that goal. Here are two examples.
Goal: Lower customer acquisition costs. Measure: promotion costs/number of customers
Goal: Improve tech support. Measure: Time to complete calls, number of satisfied callers.
Side Note: If you have a website, it is important to ensure your website becomes noticeable online. You should ensure you optimize your content for search engines (SEO). You can do this by making SEO friendly URLs (the long ones that describe your title/date). You should also note search engines analyze the number of times keywords appear within pages. Search engines also consider the number of high ranking websites that link to your site, so try to partner up! Why is SEO important? Because it drives traffic which can convert into sales. A good page rank can also keep prospects away from your competitors.