The Top 5 Questions to Ask Yourself BEFORE You Create Your Marketing Plan

A marketing plan is a document that you will build, rebuild, and revisit many times during the course of operating your business.

Maybe you are creating one as part of a Business Plan before you even open your doors, or when looking for financing.  Or you may have been in business for many years then suddenly realized that you don’t have an effective marketing strategy or budget.  Perhaps you even go through this exercise annually but put it in a file somewhere and never look at it again.  The last option is better than not creating one at all, I suppose, but only barely.

Here are the questions you need to be able to answer before you start the formal planning process.  These answers will direct your planning efforts and guide you to making the right decisions for your business in the coming year(s).

1. What do you do?

It is critical that you are able to answer it in a way that gets to the core of your business.

There are many ways to describe your business.  Among the options, you could take the direct approach, the "solution to a problem" approach, the "core competency" approach, the "sell the feeling" approach, the "sell the niche" approach, and the list goes on.

Which one is right for you?  Ideally, you should be able to answer using any and all of the formats.  Know your business inside and out – the features, the benefits, and why people are buying from you (as distinct from why you think people are buying from you).

A seller of high-end men’s footwear, for instance, could, describe his business in a multitude of ways:

Sometimes the differences are subtle, yet each has its place within the marketplace.  Consider the difference between an ad with the he adline "make your accounting tasks easier" and "makes your accounting tasks easier."  Adding that ‘s’ makes an important distinction and is a well-known technique that has made significant changes in the response when used in advertising.

Why is this critical?

Once you have nailed down exactly what it is you do, you have established the foundation of your message.  What you do not only determines who your market is, and where your opportunities lie, it also helps you determine new areas to grow and products or services that complement what you are already doing.  This in turn shows you who can help you reach your target market, through partnering, cross-promotions, or directly.

2. What do you do BEST?

Didn’t I just answer that?  No.

This question goes to the heart of what makes you different from your competition, what makes your customers come back to you, and what makes your offering unique in the marketplace.

This is also a good time to think about your competitors: what do they do best?  Look at their marketing materials.  What are they claiming they do best?  Is what you do best the same or different?  Ask your customers what differentiates you from the competition and why they come back to you.

Sometimes it is not obvious to you what it is that appeals to your clients – maybe it’s the language you use with them or a sense of comfort and honesty that they get from you that they don’t get from another company – things that you might overlook or take for granted.  What you consider to be common practice may be quite uncommon in their experience.

Are you cheaper?  Faster?  Better Quality? Ask them.

Why is this critical?

"What you do best" is the differentiating factor in your marketing message.  It tells your customers what makes you distinct from competitors, and why clients should select your company from all the options.

3. Who are your customers?

Who buys from your company and who you think buys are often two very different people.  You may think your target market is gentlemen of a certain lifestyle, but the reality may be that it is their wives, girlfriends, and sisters who actually buy your product for them.  In the service world, you may think your market is in one department, when that decision is actually made elsewhere and handed down to the people you have contact with.

You should also know the different "types" of clients you have; who are the people who comprise your primary market, and who are the people in "secondary" markets.  For your business, it may be easier to wedge open the secondary markets than find more of the primary targets.  It is quite possible that competition is fierce for the primary group, while your competition is completely overlooking the secondary ones.

Build a Customer Profile for each of your market segments.  Building a Customer Profile means answering a lot of little questions.  Here are some of the questions that you need to know about your clientele.  For a full list of the information you should know about your customers, see the MacKay 66 by Harvey MacKay.

What you should know about your existing customers:

Where do they live?

• Locally
• Within the province
• Across the country
• In the US
• Overseas

What is unique about them?  What do they want out of life?  Where did they hear about you?  What events/activities do they attend?  What magazines do they read? 

Why do they buy from you?  Why do they buy from your competition? When do they buy?  When don’t they buy?

Why is this critical?

Knowing who currently buys from you tells you where you can reach more people with similar interests, who are also part of your target market. It tells you where and when to promote your business, both geographically and the types of advertising/promotional venues to use.

4. What is your goal for this plan?

Who do you want to reach?  Are you hoping to drive new business or garner repeat business from existing customers?  Are you breaking into a new market or targeting a market already being served?  Does the product or service itself already exist, or are you educating people anew? Is it simply a matter of line extension (adding compatible elements to something that already exists)?

How much of a sales increase do you expect to see from your investment?  You can express this as a percentage – either increase over last year or return on the investment in marketing (a standard target is ten-fold return on your outlay, or an expenditure of 10% of revenues).

Why is this critical?

Setting goals and benchmarks lets you know whether or not your marketing efforts are paying off.  It helps you create a comprehensive plan of attack and measure results.

5. What is your budget?

If you have been in business for at least a year, you will have a sense of what your gross revenues were for last year.  According to many marketing experts, a budget of 10 - 15% of last year’s total revenue is a reasonable expenditure for this year.  Celia Rocks, author of "Brilliance Marketing Management: Let Your Strengths Outshine the Competition", goes one step farther, breaking it out into 12% if you haven’t been marketing consistently, and need to increase your income, 10% if you have been marketing consistently, and 8% if you don’t need to grow your business, but want to keep a level flow. Steve McKee of McKee Wallwork Cleveland writes in the April 17, 2006 issue of BusinessWeek Online:

As crazy as it may seem, it's common for entrepreneurs to overlook the need for major marketing investment from day one. "We're just starting up," they think. "We need to get on our feet and then we'll have the money to invest in things like marketing and advertising."

A survey conducted by his company found that startups invested between 1% and 12% of their revenue in advertising – most choosing an inadequate amount.  He also suggests that your decision needs to be based on whether you are volume-driven (high stock turns, narrow margins) or margin-driven (fewer sales, higher profit-margins).  If you have low margins and rely on turnover to make a profit, you need to reach as many people as possible for the lowest price.  This is the strategy of supermarkets, for example, that use relatively inexpensive flyers or low budget commercials – but they do it consistently.

Another formula for calculating your budget is to figure out how much it costs you to acquire and retain an individual client, and then multiply that out by how many new clients you want to bring in this year.

Be sure to set aside a portion of your budget for trying new ideas and venues - tried and true may seem like the smart choice, but inevitably, old strategies taper off.  Plus, how do you know whether or not a new advertising channel works until you test it?

Why is this critical?

Your budget determines the methods you use to get the message out.  Once you know who your customer is, you need to figure out what is the most cost-effective means to reach them, and still have it appeal to their particular sensibility.  It determines the frequency of your message and the media used.

© 2006, Gisela McKay. All rights reserved in all media.