Marketing is essential to the profitability and growth of any small business. While many business owners understand the value of promoting their company brand and creating compelling and consistent messages that connect with their ideal audience, they often don’t have the time or expertise to develop a strategic marketing plan. Instead, they string together a series of one-off ideas: a website refresh, a Facebook campaign, or a new brochure to hand out at a trade show.
While these are potentially great tools for promoting your company, it is critical to take a step back and look at the big picture. Marketing is communicating the value of your business to your target audience in order to sell or promote your product or service. To accomplish this, you need to know the value of your product or service in the marketplace and understand exactly who your customers are. After this, then you can decide on the best strategy, messaging, and tools to connect with them.
Whether you are starting or growing a business, you need to put a marketing plan in place. Having a marketing plan can mean the difference between random tactics that may or may not be effective and a thoughtful strategy that consistently attracts new leads and generates sales.
One simple way to begin crafting a marketing plan is to ask yourself and your team five fundamental questions. Once you’ve answered these questions, you will have the information you need to articulate your business vision and purpose, identify your ideal customer, and build a solid and actionable plan to promote your business.
1 – What are my goals and objectives?
Before you can write an effective marketing plan, you need to know what it is you want to accomplish. If your business is new, your primary marketing goal may be to simply create brand awareness to help differentiate your company from competitors. Veteran business owners may need to focus on increasing sales of specific products, promoting a new service, or expanding sales in new geographic areas.
Whatever you choose, improve your chances of success by setting goals that are SMART (Specific, Measurable, Achievable, Relevant, and Time-bound). For example, if you want to grow your website traffic, set a goal to increase it by X percent during a specific period of time. This will make it easier for you to zero in on specific marketing tactics to support your objectives and measure their effectiveness.
2 – Who is my target customer?
Before throwing your time and budget behind a new marketing tactic, consider your target audience. After all, you can’t determine how to market to your ideal customers unless you know who they are. If you did market research for your business plan, review that information and update it if necessary. If not, invest the time and effort into gathering the following information:
- Demographics, including household income, age, gender, marital status, employment, location;
- Preferred media sources such as websites, blogs, publications, social media channels, TV networks; and
- Motivation to purchase, which can be saving money or time, enjoyment, peer acceptance, status.
Having a clear customer profile and keeping it top of mind will help steer your efforts to develop the best marketing strategies to reach and engage with customers and prospects, as well as encourage them to buy.
3 – Where does my small business fit in the marketplace?
Succeeding in your chosen market niche requires an in-depth understanding of where your small business stands relative to the marketplace as a whole and your competitors. The products and services you sell are just the tip of the iceberg. To fully assess your company’s position, consider the following:
- Who are your competitors, off and online?
- How is your business different from and better than the competition? What problem are you solving for your customers?
- What are your marketing strengths and weaknesses? If a big competitor has outdated products or a tired brand image, you can use the opportunity to your advantage. If you’re launching a new business, lack of brand recognition is a weakness.
- What marketing tactics do competitors use? What works and what doesn’t?
4 – What is my marketing budget?
Many small businesses do not allocate enough money to marketing or, worse, spend it haphazardly. According to the U.S. Small Business Administration (SBA), businesses with revenues less than $5 million should allocate 7 to 8 percent of their revenues to marketing. This percentage assumes you have margins in the range of 10 to 12 percent after you’ve covered other expenses, including marketing. The budget should be split between brand development expenses, including your website, blog, and sales collateral, and the costs of promoting your business such as advertising and special events.
The reality is, small business owners often have limited budgets. As a general rule, aim to strike a balance between spending too much and too little on your marketing. Keep in mind that marketing is an investment, not an expense, so a $5,000 campaign that generates $10,000 of new business is worth the cost.
5 – What marketing channels should I use?
Only when you have determined your goals, target market, and budget, are you in a position to decide the best way to communicate with your audience. There are countless marketing channels to choose from, but knowing who you are trying to reach with your messaging will help you narrow them down. For instance, direct mail may be an effective channel for seniors who own their own homes, while reaching Millennials is all about connecting via digital platforms.
Regardless of your target, you’ll need to consider incorporating social media into your marketing strategy. However, small businesses with limited resources often find it challenging to manage their social media campaigns. It pays to invest in a social media management tool such as Hootsuite, TweetDeck or SproutSocial to help you schedule, track, and respond to activity on your pages.
It’s also important to stay on top of social media trends in order to make the most of your marketing investment. For example, marketing personalization will continue to gain traction in 2019, which means generic campaigns will not be as effective as in the past. To generate positive results, you will need to offer personalized, high-value content that speaks directly to your customers.
In addition, the competition on social media is expected to become even more fierce this year as small businesses jump into the Facebook advertising pool. As the number of advertisers grows, simply posting photos and status updates will no longer be impactful. Small businesses who want to compete will have to invest in the resources needed to engage social media followers in real time.
Once you have chosen your marketing channels, decide what marketing tactics you will use and when. Put all of your action items and timeframes in writing, and share this plan with relevant staff members to make sure nothing falls through the cracks.
Having access to working capital financing can help you cover the costs of launching or expanding your marketing efforts without impacting existing cash flow. Summit Financial Resources offers custom financing solutions that use your accounts receivable and other assets as collateral.
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Summit Financial Resources specializes in working capital financing for small to medium-sized businesses that need increased cash flow. We provide working capital financing through invoice factoring, asset-based lending, inventory lending, and equipment financing.