Spelling out the key to successful marketing, in an article for Harvard Business Review, David J. Collis and Michael G. Rukstad write: “Any strategy statement that cannot explain why customers should buy your product or service is doomed to failure.”
These words should be in the back of every marketer’s mind at all times, and yet there are still many that fail to define a clear strategy statement before running campaigns and activities. Therefore, here’s ten successful marketing steps that any marketer can follow to ensure their future endeavours are efficient and successful.
(1) Understand that marketing is the driver of strategy in the boardroom
Let’s be clear: marketing is not promotion, and it is not sales. Successful marketing is the tool that puts a business strategy into action, and if there’s no strategy then marketing simply becomes ineffective. This must be understood before anyone follows the remaining nine steps.
(2) Understand your market, how it works and its key decision-makers
Marketers often begin defining their market in terms of products, when in fact it should always be in terms of consumer needs. The best way of doing this is by mapping out the market from end-to-end, taking into account all product/service flows and clearly identifying the points at which major decisions are made. Once this is mapped out, you then need to gain an understanding of how the market is changing and how this might affect activities on the map.
(3) Group the decision-makers into segments based on their needs
“Needs” is the operative word here, and should not be confused with other terms like “socioeconomics”, “demographics” and “psychographics”. Needs form the basis of this segmentation simply because the choice of what will be consumed depends on satisfying the decision-maker’s needs, at a price they perceive as representing superior value for money. Interestingly, this is rarely the cheapest price.
As part of this step, marketers should list what is bought, who buys it and why they buy it. Those with similar needs should then be grouped into segments.
(4) Establish your organisation’s relative competitiveness in each segment
Within each of these segments, you need to list the needs and relative importance of each one, otherwise known as “weights”. Then you should give each segment a score out of ten, according to how well you and your main competitors are meeting those needs.
Now, multiply these scores by the weights, and you’ll be left with a result of your competitiveness in each segment compared to your competitors. Once calculated, you then need to list the external opportunities, threats and major issues that should be addressed within each segment.
(5) Focus your market strategy on the most attractive segments
This step is complicated but essential to the process. First, establish the factors your company would use to determine the attractiveness of each segment (size, profit potential, growth potential, etc), and then score out of ten how each segment meets each of these factors. Multiply this score by the weight, and you’re left with an attractiveness score for each segment.
(6) Set realistic objectives and strategies for successful marketing
With a clear visualisation of your position in all segments, you can now start to set clear and realistic priorities that you should stick to, whether it’s managing sustained earnings, aiming for revenue growth or improving your competitive position. Just remember: you cannot be all things to all customers. Become the best in your chosen segments!
(7) Calculate whether your strategy creates shareholder value
With strategies mapped out, you should now carry out a risk assessment on each one. This involves calculating the risk-adjusted net free cash flows for each segment for each year of the plan, and allocating the relative capital employed for each segment multiplied by the cost of the capital. If there’s an overall surplus, the plan will create shareholder value.
(8) Justify financial investments in marketing
This step involves proving to shareholders that there will be a return on investment. The best way of doing this involves measuring the indirect impact of sales and profits of all marketing expenditure and the impact of promotional expenditure.
(9) Communicate your strategy to the company and win support
Your strategy loses value without the support of senior teams, and so you should present your plan to all relevant teams and show them how this strategy will positively impact business. It’s important to obtain final sign-off from senior management, and keep them updated as the strategy progresses.
(10) Finally, be professional and ethical
Now that the plan is ready to get underway, it’s important to remain professional at all times and develop your marketing skills simultaneously. Don’t be scared to think innovatively and open-mindedly, and consider the impact of your actions on stakeholders. Most importantly, being ethical is key for successful marketing!
Professor Malcolm McDonald is liveryman of the Worshipful Company of Marketors