Marketing strategy – the foundation for profit
An effective marketing strategy must guide actions. Too many strategies gather dust because they’re not clear about their objectives and the measures that need to be taken to achieve them.
If lack of clarity is the primary reason most strategies fail, a lack of integration with sales runs a close second. Marketing and sales can’t be separated. They’re flipsides of the same coin.
A successful sales and marketing strategy sets out the roles each department plays.
- Research: brand attributes.
- Research: brand awareness.
- Define our target market sectors.
- Sector strategy: purchase process.
- Strategy’s overlap with lead generation.
- Targets & objectives.
- Sales support.
- Sales integration.
Research: brand attributes
All marketing strategies begin with research. Adopt a customer-centric or market-oriented approach i.e. it matters more what customers think than what you think.
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 see our Market Research page for full details of how to do a brand attributes survey.
Research: brand awareness
A brand awareness survey guides you towards the market sectors and job roles that offer the greatest growth potential. It tells 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.
Multi-divisional companies run brand awareness surveys for each of their divisions because customers are often siloed by one division.
If you’re confident that you already know which market sectors should be your targets and which job roles respond most positively to your message, you could drop the brand awareness survey from your marketing strategy.
This is a risky approach unless you know those market sectors well. It would be logical, for example, for an outsider to assume that construction companies would need exhaust treatment 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 to do a brand awareness survey can be found on our Market Research page.
Define our target market sectors
With your research complete, you should be able to define your target market sectors. These represent the types of business that are most likely to become profitable customers in the future e.g. engineering companies in the Midlands with a turnover under £50m.
The database or panel you used for the brand awareness survey will tell you each target markets’ industry, size and geographical spread.
How do you decide between the market sectors that show potential? Let profit be your guide. For each market sector, determine:
- How many companies are in the market sector?
- How much revenue could you derive from an average company in that sector?
- How many companies could you expect to convert to customers?
These three statistics will give us a profit potential for each market sector. The most profitable sectors become your highest priorities.
Sector marketing strategy: purchase process
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.
Marketing strategy’s overlap with lead generation
The next steps for each market sector’s marketing strategy are the same as we follow for a lead generation campaign.
The six steps are covered on our Lead Generation page so we won’t repeat them in detail here. 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.
Targets and 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. If you hit your profit target but missed the web traffic target, would your Board care?
They key is to make sure your targets match your goals. Remember the “R” in SMART stands for Relevant. If your business challenge is the conversion rate from lead to sale, you should make that your target instead of profit.
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 needs 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.
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.