First Steps to Developing a Marketing Plan

Direct Mail . . . Newspaper . . . Radio . . . Online. There are countless places to spend each advertising dollar. The hard part is determining the most effective medium for your business. It is not a matter of "One Size Fits All." The response rate for each media type will vary depending on the product or service you offer, your target market, and the characteristics of the community that you are marketing in. Even in the same industry, what works in one place may not work in another.

There are three basic steps to take to develop a marketing plan that works for your business:

Have a system for tracking the source of customers and clients.

Know the marginal cost of each of your products and services.

Identify your target levels and strategy for each customer segment.

Know Where Your Business is Coming From

Before you can determine the effectiveness of any type of advertising, you need a system for tracking how your customers and clients find you.

The list below ranks customer sources and the likelihood that a potential customer will purchase from you versus one of your competitors.

Current satisfied Customer

Referral from a trusted source

Current relationship, but have not yet purchased

Recognized expert in field

Ads

Cold Calls

The higher the level of trust developed, the higher the probability that they will purchase from you.

I would suggest defining your customer tracking system based on these terms. Your system can be as simple as keeping a running tally on a sheet of paper for each sale or new customer for each category. An Excel spreadsheet is another excellent and simple way to track this. If you have an existing customer database, point-of-sale program, or accounting system, add a field for each record to track this.

Here's the trick. You have to ask your customers and clients how they heard about you and you need to be consistent. After they give you the first answer, ask them if they heard about your business from any other source.

After you start tracking this, you will get a much better idea of what avenues of advertising are working for you. When at all possible, you also want to track the lag time between the day the marketing piece is distributed to the time of purchase.

Know Your Gross Margin

Let's say that you have been tracking where your customers are coming from and there is one area of advertising that hasn't been getting great results but pays for itself. Should you keep it?

Maybe not. No matter what type of business that you are in, there is a cost of doing business. There is a certain percentage of every dollar in revenue that goes to cover your overhead costs.

In order for advertising to truly "pay for itself," it must cover its own cost plus the marginal cost of doing business. But the point of advertising is to make your business money, not just pay for itself. If it is truly "break-even," maybe it is time to look at other options.

Targeting Trust in Your Marketing Plan

When I sold real estate, the general rule of thumb for someone starting in the business was that you work really hard for three years and then it starts getting easier. At that point, referrals and repeat customers become an increasingly larger part of your business.

I think this principle is true regardless of the industry, and it goes back to the level of trust between you and your customer as illustrated in the list above. If the purchase decision involves a low dollar amount, it will require a lower amount of trust and a shorter amount of time to develop.

So back to the original question, where do you put your money? If you want a truly effective marketing campaign, a plan for each customer source in the trust diagram should be developed.

Copyright 2005 - Carla Alvarez, Legacy Marketing Services

Carla Alvarez is owner of Legacy Marketing Services which provides integrated marketing services for businesses including business identity, web and CSS development, and business development seminars.

---

Coupons that Work

Turn a coupon into a business card (or vice versa).Coupons... Read More

3 Ways to Gain and KEEP Customers Using Postcards

In today's competitive (sometimes cutthroat) marketplace, savvy business owners need... Read More

Are You Overlooking Your Hidden Profit Centers?

There are other names given to "Back-End Selling". You may... Read More

Do You Know Where Your Email Address is Today?

Having people go to your website is not always easy:... Read More

Referrals - How to Get Them

Referrals are an extension of Networking. If people like you... Read More

Marketing in Business and Commerce in the New Consciousness

The point is what you give to another you give... Read More

Overcoming Resistances To Marketing a Practice-Part 2

In Part 1 of this article, "Resistances to Marketing a... Read More

Hispanic Market Reality and Purchasing Power

How many Hispanic people live in the US currently. Well... Read More

There Are Benefits... And Then There Are Benefits

Not all benefits are created equal. Knowing which ones to... Read More

Business Marketing For Consultants, Coaches, Speakers, and Trainers: How To Be Noticed and Trusted

Business marketing is essential for professional services, such as consultants,... Read More

Creating Your Unique Selling Proposition or USP

Creating Your Unique Selling Proposition"Don't tell them what you do.... Read More

Marketing to a Critical Mass

In "Developing a Marketing Plan", we covered the first steps... Read More

Marketings Nuclear Weapon

Three seconds. That's what you have to convey your message.... Read More

Make Out Marketing

What is the single biggest fear of teenagers, business owners... Read More

Sales and Marketing: Can One Exist Without the Other?

Simply put the marketing people and the sales people depend... Read More

An Example of Understanding Consumer Thinking

A church in my community provided me with one of... Read More

Flesh Eating Spiders And Other Marketing Horrors

After a friend was bitten by a spider, I decided... Read More

How To Get Business With Your Business Card?

So, you have a business card? And you have given... Read More

So What Do You Do?

Once you have the attention of a business prospect, at... Read More

The Top 10 Ways to Market your Business or Professional Practice Without Networking

While focused, strategic networking is usually the most efficient way... Read More

Spice It Up! Rib Festival Teaches Us About Product Value

The Rib America Festival is a fun filled family event... Read More

Test Marketing--How to Increase Your Direct Mail Marketing Response by Using the Internet to Test

I've discovered a really fantastic way to discover what works... Read More

Quick Postcard Design Tips

TIP #1: Avoid the "Too Much Information" Syndrome... Read More

Five Deadly Small Business Marketing Mistakes

Here are some marketing mistakes that take a heavy toll... Read More

Sum of Its Parts

I just spent a week at the beach with my... Read More