Marketing strategy – the foundation for profit
Ever since Binet & Field published the latest edition of “The Long And The Short Of It”, we’ve come to the realisation that a successful marketing strategy combines both short and long-term activities.
In marketing terms, that means a blend of short-term lead-generation and long-term brand building. It’s not either-or; it’s both.
Binet & Field’s research revealed evidence of what common-sense should have told us was true. A strong brand delivers long-term profitability and, when combined with complementary short-term lead-generation, we can boost sales volumes too.
- Define our target market sectors.
- Long-Term: Brand-Building.
- Long-Term: Inbound Lead-Generation.
- Short-Term: Inbound Lead-Generation Response.
- Short-Term: Account-Based Sales & Marketing.
- Short-Term: Promotions.
- Short-Term: Outbound Lead-Generation.
- Targets & objectives.
- Sales support.
- Sales integration.
- Sector strategy: purchase process.
This guide illustrates how Forbes Baxter Associates can help you scale enterprise strategies into practical plans that’ll help B2B SMEs generate lasting profit.
Define our target market sectors
The first step in your strategy is relatively simple. Define which market sectors (industries) you want to target. Segmentation and targeting have been a mainstay of marketing practice for decades. Even the latest research from Prof Byron Sharp in “How Brands Grow” supports the idea that moderate targeting is effective.
To help you understand whether a market is right for you, we’ll help you analyse different industries:
- Does the market need your product/service? Are there some companies in the market that already buy from you or your competitors?
- Does your product/service offer any advantages to companies in that market? Typical advantages would be features/capabilities or pricing but other characteristics such as delivery or sales channel could be persuasive too.
- Is your product/service a new alternative for a market that’s used to doing things a different way? Could you produce components from plastic that are traditionally made from steel? Could you offer computer modelling instead of traditional prototyping? Could you outsource a service that’s usually conducted by internal staff?
- How severe is the competition for your product/service in that market? Is it already dominated by a clear market leader? Has the market become commoditised so the only factor affecting purchase decisions is price?
- Are there enough companies in the market to provide adequate revenue? If there are only a few potential customers, will they order in enough volume or pay a high enough price to make it profitable for you? If there are many potential customers, would they be happy to share you as a common supplier?
- Is the market populated by companies you could sell to? If you’re an SME and the market is dominated by multinational enterprises, you may struggle to present yourself as a good commercial fit.
- Can you identify the companies in the market and the key contacts in those companies? Most marketing techniques depend on reaching out to decision-makers at some point. If you can’t identify those decision-makers, your sales and marketing efforts will fail.
The best source of data on individual markets comes from Plimsoll Publishing. Plimsoll reports are the exception to the golden rule of market research (that it’s inaccurate and over-priced).
At the time of writing, Plimsoll reports cost £600 for the first industry and £300 for each subsequent industry. It could be the best investment you make. Plimsoll tells you:
- The names of all the companies in the industry. It might miss some, but only if they operate in stealth mode.
- Their financial performance. Are they growing or shrinking? Can they afford what you’re selling? What market share do they have?
- Their current directors with ages (so you know who might be more of a figurehead than an active manager).
- An assessment of which companies are good trading partners based on their commercial and financial success.
- Their locations so you can plan a regional campaign if that suits your business.
When considering how best to address current and new markets, it’s always worth considering the Ansoff Matrix. This helps you grasp the relative difficulty of a market penetration strategy at the easy end of the scale compared to a company diversification strategy at the hard end.
Our initial goal is to help you produce a shortlist of markets that could serve your business. Once we start researching those markets in more detail some will become more attractive and others will fall by the wayside.
Long-term Marketing Strategy: Brand-Building
You have to address your brand early in the strategy process not because it’s the most important part of your marketing strategy; it’s not. Nor because it’s what you’ll spend most budget on; you won’t.
You need to address your brand because it underpins so many of your other activities. You need to understand what your brand means to potential customers and, ideally, how many of those potential customers even recognise it.
Research: Brand Attributes
Your first step sees us conducting a Brand Attributes survey for you. This type of survey is both quick and inexpensive because it’s based on the opinions of your existing, past and almost customers.
A Brand Attributes survey tells you how your brand is viewed by the market. You may think you’re expert or responsive but your current, lost and almost customers will tell you if that assumption’s accurate.
The Brand Attributes survey can be used to measure:
- Do your staff have the sales and service expertise they need to serve customers?
- Do you respond quickly enough to customer requirements?
- How do customers view your pricing? Does it offer them value?
- When they view your products/services against competitors, how do they judge their quality, capability & reliability.
- Do you show that you understand your customers’ business processes, constraints and priorities?
Rather than repeat guidance that can be found elsewhere, please download “Your Little Black Book on Market Research” for full details of how we run a Brand Attributes survey. It’s free from our website..
Research: Brand Awareness
Your next step is optional. We can conduct a Brand Awareness survey to tell you:
- Who is aware of you; these results can be segmented to show awareness in different industries (e.g. manufacturing under £50m or retail over £5m) and different job roles (e.g. Finance Directors or HR Assistants).
- What is their opinion of you? This ranges from aware of you, consideration of you as a supplier to preference for you to be a supplier.
If you like marketing buzzwords, this is the survey that tells you the strength of your salience or mental availability.
The value of the Brand Awareness survey is that it tells you how high a mountain you’re trying to climb. If you have zero awareness in a new market you want to target, you have a big challenge ahead of you. If you have strong awareness in one of your existing markets, your life will be easier.
There are two reasons the Brand Awareness survey is optional.
- Firstly, it’s more expensive than the Brand Attributes survey. To understand brand awareness you need to survey people who are not your customers, people who have never done business with you. We need a research agency or new database for that.
- Secondly, most businesses – especially in the SME sector – are fairly safe in assuming they have weak brand awareness. That gives them the start point they need in their brand-building activities.
There are, of course, risks associated with not doing a Brand Awareness survey. It would be logical, for example, for an outsider to assume that construction companies would need systems to reduce emissions from diesel-powered equipment – new legislation makes it mandatory. To the outsider, it looks like a lucrative market.
But that outsider might not know that the original equipment manufacturers (OEMs) are retrofitting the necessary exhaust treatments to equipment in the field. The market doesn’t exist.
Without the proper research, you can target markets that look promising but, because you’re not working from a customer-centric perspective, you’ve reached the wrong conclusion.
Full details on how we run Brand Awareness surveys can be found in “Your Little Black Book on Market Research”. Please download it for free from our website.
Once you’ve completed your research into target market sectors and you’ve completed your Brand Attributes survey you have two of the essential foundations you need for brand-building activities:
- You understand what your market expects from its suppliers.
- You understand how your markets perceive you.
If your brand attributes are predominantly negative your first course of action is to fix the underlying problems. You can’t persuade the market you’re one thing if every experience they have with you says another. You can’t promote yourself as a reliable supplier if every delivery you make is late. Unless you fix your products and processes, every pound you spend on brand-building will be a pound wasted.
Once you have positive brand attributes, you can start your brand-building activities. To avoid duplicating guidance we publish elsewhere, we’ll direct you to the Little Black Book On Brand Marketing.
Long-Term Marketing Strategy: Inbound Lead-Generation
Publications like “The Long and the Short of It” consider lead generation to be a short-term activity. This is understandable because Binet and Field’s research was based on B2C advertising campaigns. In the B2B world, some lead generation can be short-term but the most profitable activities are long-term. Inbound lead generation is a classic case.
There are two phases of any inbound lead generation campaign. The first, and longest, phase is the attraction and nurturing phase. This is where you attract people to your website, convert them from an anonymous visitor into an identified lead and nurture their interest over a period of weeks or months.
Attraction and nurturing is an entirely automatic process if you’ve deployed marketing automation. Apart from requiring almost no human intervention, the advantage of this type of inbound lead generation is its longevity. A well-constructed campaign with valuable collateral can run for years.
A inbound lead generation campaign from Forbes Baxter Associates differs from a brand-building campaign because:
- It is targeted at people who are in the market to buy your product/service right now.
- It does focus on specific benefits.
- It is designed for a narrow audience.
But this doesn’t mean it has to be short-term.
Design your lead-generation campaigns to complement your brand building activities.
The first two steps are easy:
- Target your lead-generation at the same markets where you’re running brand-building. SMEs can’t afford to attack all markets at once so, even though it goes against best practice advice, your brand building will be focused on particular areas. If you target a different market with your lead-generation, you’ll be attacking without brand support. You’ll have no brand awareness and prospects won’t associate any attributes with your name.
- Make sure the visuals are consistent with your brand-building. Keep the same brand colours. Keep the same logo. Make sure the visual assets that you’re using to build distinctiveness are present in your lead-generation collateral.
The other steps are not complex but they do require us to work carefully and collaboratively:
- Make sure the concepts are complementary to your brand-building. If you’re promoting a brand for SMEs, don’t try to generate leads in the enterprise sector. If you’re promoting a brand that serves local businesses, don’t try to generate international leads. If you’re promoting a quality brand, don’t offer speed or low prices.
- Link lead-generation to your brand attributes. The business-to-consumer sector has a concept called “brand response”. It means sales activities that are designed to piggy-back on brand-building.
Sainsbury’s demonstrated a classic case of brand response. Their long-running brand campaign “Making Life Taste Better” had been fronted by Jamie Oliver.
They morphed this into a brand response campaign by retaining the same visuals (including Jamie Oliver), retaining the same focus on food quality but launching “Try Something New Today” menu cards in stores. Shoppers picked up the free cards and bought the listed ingredients.
How you translate brand response into the B2B SME sector depends on your business. Imagine an artist who builds a brand as a business cartoonist (like Mark Anderson or Tom Fishburne) triggering brand response by promoting specific cartoons that are relevant to the manufacturing sector. Identifying what works for you is how Forbes Baxter Associates helps you.
To prevent duplication, you’ll find more details of inbound lead generation in our Little Black Book on Lead Generation but they can be summarised as follows:
- You need to understand competitive pricing & develop a product/service comparison. The best sales and marketing strategies set pricing according to market acceptance and competitive positioning. It is risky to adopt a simpler ‘cost-plus’ pricing policy i.e. adding a 40% mark-up to your production costs. A cost-plus price could be wholly uncompetitive or miss a profit opportunity. Pricing is only relevant when your product/service comparison has proved the similarity between your offering and your competitors’.
- Customers buy products/services when they want to achieve a goal or solve a problem. You have to understand the goals and problems that are common in your target market sectors. Useful goals and problems may only be loosely linked to your product/service. When we worked for a cloud computing company we found that smaller law firms struggle to retain key staff if they don’t make good use of technology. We needed a value proposition to address their staff retention, not IT, problem.
- Your value propositions have to offer your customers a way to achieve their goals or solve their problems. By aligning your value propositions to your customers’ goals and problems, you stop yourselves from promoting features that you think are important but which do not matter to your customers. To continue with the problem faced by smaller law firms, our value proposition was to promote the use of cloud-based tools for collaborative working and remote access.
- A strong value proposition has to be backed up by evidence. We live in a sceptical world where purchasers have to be convinced by test results, case studies, video evidence, price comparisons or certifications. These aren’t obstacles to your sales process. They’re opportunities to show yourselves as superior to your competition.
- If you have technical, complex or dull value propositions, you may need to develop messaging to simplify them or bring them to life. Reducing costs, for example, is a strong value proposition but it’s a very dull message. The same applies to customer service. If they are your main value propositions you need a way to communicate them in a way that will grab the attention of your intended audience. For example, you may portray real and hidden costs as an iceberg because you only see the tip of an iceberg. That’s a good illustration for this guide but a bad example in reality – it’s been used too many times.
- The final stage of your marketing strategy is the part everyone sees, the communications. Your options are varied and exciting. The list could include optimised web content, social media posts, animations, videos, screen recordings, download documents, ‘gated’ downloads like this our Little Black Books, emails, surveys, chatbots, Google and social media adverts, adverts in print media, sponsorship, datasheets and brochures, case studies and testimonials, presentations, magazine editorial, award submissions, press releases, exhibition stands, seminars, webinars and training courses. They crucial point is to make sure that whichever communications channel you use, it is appropriate for your target market sector.
One of the focal points of our work with you will be deciding which communications channels are appropriate to your target market sectors.
Short-Term Marketing Strategy: Inbound Lead-Generation Response
Once the prospects being nurtured by your inbound lead generation campaigns have demonstrated enough interest, they become Marketing Qualified Leads (MQLs). At this point, they’re passed to your sales team to follow up.
This process is also covered in our Little Black Book on Lead Generation so we won’t duplicate it here.
There is one point that’s so important it is worth repeating here: if the integration between sales and marketing is to run smoothly, it has to be controlled by an integrated marketing automation and CRM system. The marketing automation system nurtures the leads and then hands them to the CRM system to manage the sales team’s follow-up.
Short-Term Marketing Strategy: Account Based Sales & Marketing
Account-based Sales and Marketing (ABSM) could best be described as highly personalised marketing.
Instead of contacting 1,500 prospects with very limited personalisation, ABSM sees you contacting 15 prospects using a variety of comms techniques with your personalisation as extensive as knowing the company’s business in detail, its market and competition, legislation that affects it, purchasing frameworks it uses, the roles of the 15 people, their influence on purchasing and a deep understanding of their goals and challenges.
ABSM works because it shows your understanding of your customer’s business and because it addresses the goals and challenges that they actually face.
It’s probably doing ABSM a disservice to describe it as a short-term activity (the preparation and research alone is exhaustive) but each individual campaign is unlikely to reach the 3-year duration to qualify as long-term.
To prevent duplication, we’ll refer you at this point to our Little Black Book on Account-Based Marketing which deals with the subject in detail.
Short-Term Marketing Strategy: Promotions
Promotions generally increase short-term sales at the cost of damaging your long-term brand equity and reducing your ability to fight price erosion.
Put harshly, a promotion says to the market “buy it now because there’s a special deal and our products/services aren’t worth full price”.
Despite this, there are four reasons why a company might use promotions:
- Promotions can be an effective way of persuading buyers to take a complementary or optional add-on. This could include a short-term enhancement to service terms (on-site maintenance as opposed to return-to-base), faster delivery or support documentation in a variety of different electronic formats. The key to making such promotions work is that the customer has got to be able to buy these enhancements at full price when they reorder. If you just give something away (like a free printer with every computer) you’re basically just discounting. You’re devaluing your own offering.
- If you sell through resellers or distributors, their way of doing business might include regular promotions from the manufacturers they represent. Without a promotion, your brand will lose prominence. It’s common marketing practice to say that when resellers demand a promotion the manufacturer should demand a quid pro quo. This ignores the commercial reality that most manufacturers don’t have the influence to demand anything from their distributors.
- Competitive pressure may make promotions an unavoidable part of doing business in your market. If you don’t have a strong brand then a lack of promotions will leave you vulnerable to the ‘Black Friday phenomenon’ where people buy whatever is being promoted without checking whether the special offer is actually good value.
- Finally, business pressure might just mean that you have to increase sales volume in the short-term and ignore any long-term consequences. If the bank threatens to withdraw its factoring facility or increase its interest rates unless you hit £1 million turnover this month, there’s no point worrying about the health of your brand next year.
The variety of promotions you could launch is endless. However, in order of desirability, they could include:
- Competitions serve a double purpose of boosting brand awareness and enhancing short-term sales volumes. However, the problem with competitions is their effect on sales volume is relatively weak – you’re making customers work for the chance of a future benefit.
- Charity or social donations serve the same double purpose as competitions. Like competitions, their effect on short-term sales volumes is limited – the customer is not getting a tangible benefit, just the warm glow of having helped somebody else. Some charities (especially the big ones) also refuse to let their names be used in such commercial activities.
- Unrelated ancillary benefits, such as subscriptions to trade journals, can be very powerful because the ancillary benefit goes directly to the customer. The benefit is obvious to them. The advantage to you is that it doesn’t damage your brand equity – the item you’re giving away has nothing to do with your brand despite being very useful to the customer. The best benefits are ones your customers would have purchased anyway – you’re just saving them the money.
- Options for related products is a somewhat devious promotion. An office furniture outlet could offer posture enhancers for chairs with every office table purchased. There’s a clear benefit to the customer but they can only realise the benefit if they have chairs that can accommodate the posture enhancers. The outlet hopes that the customer will have to buy at least one or two new chairs as well as the table. That’s why the promotion is devious and that’s why it’s quite low in this order of desirability.
- Finally, you could run a discount promotion. We put all kinds of price-related promotions in this category: money off, buy one get one free, free optional extra, et cetera. All of them are powerful because the customer immediately understands the benefit and knows that it’ll be useful. By the same token, all of them damage your brand equity because you’re saying your product/service isn’t worth the price you used to ask for it.
Short-Term Marketing Strategy: Outbound Lead-Generation
The final short-term activity is outbound lead-generation i.e. finding the details of a potential customer and contacting them by phone, email or direct mail. There are so many problems with outbound lead generation that this will be a short section.
- Logistically, outbound lead generation is exhausting. As soon as the activity ceases, your pipeline dries up. There is no automatic follow-on as there is with inbound lead generation or brand-building.
- Strategically, outbound lead generation damages your brand equity. You’re selling to people with whom you have no relationship. They know little about your company. Your only credible reason to buy could be price.
- Financially, outbound lead generation can be expensive. You either need your own sales team or a telesales agency. Both are expensive. The advantage of the agency route is that you can pay by results. The downside is that the appointments they book might not be as well-qualified as you’d hope. Furthermore, agencies struggle to promote your message effectively because they’ll be promoting somebody else’s message soon afterwards. And God help them if the customer asks anything more than a superficial question.
- Technically, outbound lead generation faces the problem of finding contact details. With inbound lead generation, the customer is persuaded to volunteer their contact details. With outbound lead generation you may have to buy a database or use existing data. Which brings us to the final problem:
- Legally, outbound lead generation campaigns may depend on data that is not being used in accordance with GDPR, CTPS or TPS regulations. The GDPR (General Data Protection Regulation) governs how personal data is collected, stored and used. The CTPS and TPS (Corporate Telephone Preference Service and Telephone Preference Service) maintain a list of numbers you’re not allowed to call for telesales and marketing purposes.
Marketing Strategy: Targets & Objectives
You need your marketing strategy to be successful. To be successful it needs targets or objectives. As the old saying goes, “if you don’t measure it, you can’t fix it.”
Even though it dates back to 1981, the SMART system still works for targets:
It’s at this point that sales and marketing integration starts to become critical. If marketing works in isolation, it can develop targets that won’t necessarily help your business:
- Web traffic.
- Brand awareness.
- Social media followers.
- PR coverage.
These are pure marketing metrics that might not help the most important metric of all: profit. As a sales-support function, marketing has to improve profit.
A sales and marketing strategy’s target has to include a profit metric (gross profit should be measured so overheads don’t distort the assessment).
As marketers, we don’t like to use sales or profit as a target. Closing the sale is out of our hands. Great marketing work can be wasted by an ineffective sales team.
That’s why sales and marketing have to develop one joint strategy. Marketing has to commit to delivering the tools and support so sales can commit to delivering the sales that generate our profit.
Using profit as a metric has another advantage. It helps you limit the number of targets you assign. Other metrics can be seen as a way you achieve profit: web traffic, search ranking, number of leads, conversion rate, conversion time, etc.
When we help you decide your strategy’s targets, we’ll ask you to consider this: if you hit your profit target but missed the web traffic target, would your Board care?
Many essential marketing activities don’t need a SMART target. A new Marketing Director might want a brand awareness or customer satisfaction survey. Increasing brand awareness and improving customer satisfaction could become SMART targets but the first step has to be the surveys that set the baseline.
These activities should just be recorded as objectives. They don’t need a complex metric. They’re either complete or not. It doesn’t hep the business to turn it into a SMART metric: “Complete 1 customer satisfaction survey by 31st March” although there will be some organisations that prefer to do so.
Marketing Strategy Provides Sales Support
If your sales and marketing strategy is going to work, you need to provide your sales teams with every tool they need to close sales. Common tools include:
- Brochures and datasheets, obviously.
- Presentations they can use in scenarios from a rolling demo, through a theatre-based audience to a stand-up encounter on an exhibition stand.
- Sales support books that explain how to sell your product/service (elevator pitches, features and benefits, objection-handling, etc.). These help you train new sales staff as the strategy is delivered.
- Videos, animations or screen recordings that show the advantages of your product/service.
- Data and survey results presented in easily digestible charts that make key points quickly and clearly. The detail can come later.
- Authority collateral that demonstrates the depth of your expertise in your field.
- Case studies, certifications, awards and other qualifications that validate your claims in the field.
- A sales enablement system to bring all the available collateral together at the touch of a fingertip. You don’t want to see salespeople wading through SharePoint while your customer loses patience.
Marketing Strategy Needs Sales integration
It’s not easy to integrate sales and marketing. Sales is often short-term and transactional whereas marketing is long-term and strategic. There are ways to smooth out this sometimes fractious relationship:
- Develop a joint strategy and shared goals. If marketing’s goal is to produce leads but sales’ is to generate revenue, the friction needs to be managed.
- Explain marketing best practice when you’re trying to change sales and marketing procedures – from an interruption/outbound model to an inbound model, for example. It’s hard to make the change and hard to make people want to change.
- It’s easier to enforce procedures and SLAs if they’re mutually agreed. Efficiency depends on following up leads, recording outcomes, maintaining contact data, etc. Each department needs to clarify what’s needed and agree to its responsibilities.
- It’s difficult to imagine sales and marketing integration happening without a good CRM (Customer Relationship Management) system. The marketing department needs marketing automation too, but it’s CRM that welds sales to marketing.
- Field visits improve the marketing department’s understanding of your customers, their purchase processes and the needs of your sales teams. Marketing needs to get out of the office several times a month.
Sector Marketing Strategy: Purchase Processes
You need to understand your customers’ purchasing practices before you can sell to them successfully. If you don’t align yourselves correctly, you could be trying to sell the right product/service but in the wrong way or even to the wrong person.
- Do your customers buy outright or through lease-purchase? If they want to exploit the advantages of lease-purchase, you might want to offer finance as well as your usual products/services.
- Is the visible customer the real customer or do they buy through a supply chain? When we worked for an engineering company we tried to sell an engine maintenance system to mining companies using fleets of expensive trucks and excavators. We failed until we discovered the people who cared about reduced maintenance costs were the Repair & Maintenance (R&M) companies that ran the fleets.
- Do your customers follow a structured process with setpoints and requirements? This is very common with tenders and public sector procurement. If so, you need to prepare the documentary evidence the process requires.
- Do your customers buy systems or adopt an ‘as a service’ model? If, for example, they buy software as a service, you need a pricing model that suits their preference.
- Do your customers qualify for funding or grants when they buy your product/service? If so, you need to simplify the application process for them. When the EU changed the way wind farms connected to the national grid, suppliers were entitled to financial support to upgrade their systems. The controls company we worked for helped customers with that process.
- Are your customers’ businesses affected by annual cycles, making some times of the year good and other times bad? When we worked for a commercial groundcare business, nothing was sold in the summer because everyone was out cutting grass. The buying season was October to February. The public sector is famous for spending before the end of the financial year in March (although the practice has fallen off recently).
- Do most businesses in your target market sectors adopt a similar purchasing process for your products/services? Do IT purchases always involve the IT Manager, the Finance Director and the Managing Director, for example? You need to present value propositions for each stake-holder and influencer in the process.
- Is your product/service bought once with an automatic recurrence afterwards or do you have to ‘sell’ every transaction? This will affect how much time you can afford to devote to every transaction and how automated you make the process.
- Do your customers expect face-to-face meetings before they purchase or do they purchase over the phone or online? If you ignore your cost-of-sales, your profit expectations will be wrong.
- Do purchases typically involve lengthy negotiations, demonstrations or meetings at reference sites? They will all affect your cost-of-sales and influence the type of materials and processes you need to setup in your marketing preparation.