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.

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In The News:

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LA reveals unveils new tourism marketing slogan
San Jose Mercury News,  USA - 3 hours ago
AP LOS ANGELES—The city on Friday unveiled a new marketing campaign built around the slogan "That's So LA" to keep tourists coming despite the nation's ...
New campaign to boost LA tourism abc7.com
"That's So LA" NBC Los Angeles
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Reuters
Audi says it will increase US marketing efforts
Chicago Tribune, United States - 6 hours ago
Those marketing dollars have an aim to push Audi US sales to 200000 vehicles by 2018. Schwarzenbauer said the company has a goal to sell 1.5 million Audis ...
Audi plans record US marketing spending Reuters
Audi plans to boost US marketing budget Automotive News
Audi says it will increase US marketing efforts Fox 28
DetNews.comall 16 news articles

Columbus tech firm buys Dayton marketing company
Bizjournals.com, NC - 8 hours ago
Implications International, which specializes in interactive marketing, brand design, and Web development, has offices in Peoria, Ill., Mumbai, India, ...
Columbus IT company buys Beavercreek firm Dayton Daily News
all 4 news articles

Wellstar/TMI Begins Marketing Imaging System to Long-Term Care ...
MSNBC - 3 hours ago
TMI's marketing plan includes a program where LTC facilities can lease the equipment necessary to perform skin assessments and store the necessary data ...

Halekulani to get marketing boost from Japanese hotel
Bizjournals.com, NC - 7 hours ago
Effective April 1, Imperial Hotel will start reservations service, sales, marketing and public relations activities within Japan for Halekulani and Waikiki ...

Proton Laboratories Announces New Sales & Marketing Office
MSNBC - 20 hours ago
Proton will start by marketing a variety of enhanced water products that provide health benefits for people and the planet as well as the commercial product ...
Proton Laboratories opens Southern California office Bizjournals.com
all 9 news articles

Zoo honored for marketing campaign
Salt Lake Tribune, United States - 5 hours ago
... different companies around the US The Utah Chapter of the Society for Marketing Professional Services recognizes excellence in marketing communications ...

Boston Globe
FedEx trims '09 marketing budget by 25%
Bizjournals.com, NC - Jan 8, 2009
United Parcel Service Inc. rival FedEx Corp. will cut its marketing budget by more than 25 percent for 2009, the company recently disclosed on its blog. ...
FedEx cuts marketing spend by more than 25 percent Reuters
FedEx cuts marketing budget DM News
FedEx to reduce marketing budgets by 25% Brand Republic
all 45 news articles

Katz Media Launches New Marketing Unit
FMQB, NJ - 11 hours ago
Katz Media Group has launched a new, national marketing unit that will create custom solutions for advertisers and their agencies with the goal of ...
Katz Launches National Marketing Unit, Trims Staff Media Buyer Planner
Katz Media Group forms marketing unit BtoB Magazine
Katz creates unit to handle ads for new radio platforms SmartBrief
all 6 news articles

Examiner.com
Cape May tourism department wins marketing award
Examiner.com - 15 hours ago
by William Sokolic, Jersey Shore Examiner The Hospitality Sales & Marketing Association International will recognize the Cape May County Department of ...

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