Sales are declining, the competition is winning more deals than you and prices are under pressure! Does this sound familiar? These are common issues facing most businesses today. Despite spending large sums of money on marketing and advertising campaigns each year, many companies are no longer seeing improved results. So what’s changed?
Well, there are more products, suppliers and choices in every conceivable market today than at any other time in history and it isn’t getting any easier. It is virtually impossible to identify any market where fierce competition doesn’t exist. If you talk to a cross section of business owners they will all tell you that they are in the most competitive market of all. No-one else seems to face the competitive pressures that they do. Or do they?
Actually most companies do face similar challenges, but some manage to grow, win the big deals, increase sales and market share whilst others shrivel. What sets them apart from the mass of also-rans? Too often these struggling and confused companies throw money into costly advertising campaigns, new websites or glossy brochures, believing them to be the ‘cure-all’ for slow sales or lost market share.
In reality however, effective advertising and promotions are only the tactical implementation of a well planned marketing strategy and when effectively integrated into the overall marketing mix the results can be outstanding. But all too often the underlying marketing strategy is sadly lacking. A marketing strategy needs to consider many aspects and like a cake recipe, get one ingredient wrong and the cake will most likely flop. Some key elements need to be in place before you can plan and execute an effective advertising or marketing campaign.
SEGMENTING YOUR TARGET MARKET
The potential markets for most mainstream products are often spread over large geographic areas and can include a wide variety of target customers. As much as we all believe we can, it is virtually impossible to serve all of these potential customers effectively, and companies that focus on a clearly defined sub-group will be more successful. Besides, the cost of marketing to them all can be prohibitive.
So, apply the 80/20 rule and identify a realistically manageable segment of the market that your company can effectively target, considering your capabilities, resources, limitations and available budget. Then focus, focus, focus! Once you ‘own the hill’ you can then look to expand your target market. But remember, expansion is a reward for success, not a prerequisite.
KNOW YOUR CUSTOMER
How well do you know your potential customers? What will make them buy from you in preference to your competitor, how do they perceive your company, what level of service do they expect, how do you match up to this expectation? Many companies don’t even have a full understanding of their present customers let alone a large group that have never bought from them before. If you don’t know your customer how will you know what to say to them in your marketing and advertising message?
Without a deep and clear understanding of your selected target market your messaging becomes a conversation between two people who speak different languages…not very persuasive. Time spent researching and segmenting your chosen target market and placing yourself in their buying shoes will translate into greater effectiveness of your marketing efforts further down the track. There is an old Spanish saying which sums up the concept, “Before you can be a bullfighter, you must first be a bull”.
DEFINE YOUR UNIQUE POINT OF DIFFERENCE
If one of your staff was asked the question, “What makes your company or product better than your competitor”, would they be able to give a convincing answer that accurately reflects your unique point of difference or value proposition, and not the usual glib response, “Because we’re the best”? If not, then you have some communication work to do. You can’t really blame staff for this – in many instances this critical marketing fundamental is simply not adequately conceptualised or defined at the management level. If you can’t effectively communicate your unique point of difference or value proposition to your staff and in turn your market, how can you expect to succeed against your competitors that can.
Developing and understanding your “unique point of difference” or “unique value proposition” is arguably the most critical part of your marketing strategy and should supersede any tactical programmes. This is where your market position, competitive strategy, marketing collateral and advertising messaging stems from. Without it you will always be the underdog, destined to follow the leader and pick up the crumbs.
HOW WELL DO YOU KNOW YOUR COMPETITION?
Competition is here to stay, love it or leave it! So if competitors are a part of your landscape then how much do you know about them? You can’t defeat the enemy unless you can get inside their head. In a military context no one would expect a general to commit his soldiers and resources to a battle without a clear understanding of who they are up against, what tactics the enemy are expected to deploy, how best to outmanoeuvre them, their strengths and weaknesses etc. But how often do companies do just that, throwing money into a marketing or advertising campaign in the hope of success, without really understanding what the competitors response will be and generally with little grasp of their own capabilities.
A deep understanding of your competitor should be an essential part of your marketing strategy. It’s not particularly difficult to do but it does require ongoing effort and commitment. It’s not just a once-off exercise. Once you have a clear understanding of who and what you are up against you can begin to develop your marketing plan and competitive strategy in a way that sets you apart from your competitors. You will be able to predict how they will react to your marketing efforts and develop effective contingency plans to deal with any counter attack by them.
HOW DO WE REACH OUR TARGET MARKET?
By understanding the habits, likes, dislikes and buying triggers of our target market customers we are better equipped to decide on the best method of interacting with them. Placing an advertisement in the national press is not necessarily the most effective way to reach your market. It’s certainly not very cost effective unless your target market is everyone in New Zealand! Often it can be far more effective to look at less obvious avenues that allow you to communicate directly with your target market in a more interactive and direct way. As an example, direct mail can be very cost effective in reaching decision makers. Personalising it adds an ‘edge’ to the piece and makes it stand out from the usual junk mail flooding our mailboxes, thereby increasing the ‘read rate’.