Marketing consultant Jim Symcox outlines the importance of marketing strategy and highlights the dangers of not having a marketing strategy in place!
Peter Drucker famously described marketing in the context of the firm with: “Marketing and innovation are the two chief functions of business. You get paid for creating a customer, which is marketing. And you get paid for creating a new dimension of performance, which is innovation. Everything else is a cost centre.”
He further defined marketing by saying: “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.”
Many SME firms approach to marketing is often one of “we can’t afford to spend money on marketing we need sales!” And of course they’re right. And they’re also wrong. They’re right because without the lifeblood of sales a company drops dead.
And they’re wrong because without the ability to get to the right customers that marketing can provide there is a lot of wasted effort in all areas of the business, not just sales.
Wasted Effort Without Marketing
These are examples of the many areas of a firm at risk or fail through the lack of a suitable marketing strategy:
- Customer prospecting
- Product or service development
- Sales
- Accounting
- Advertising
- After sales service
- Ad hoc marketing
Customer Prospecting
Many firms begin with a big idea they believe people will buy. Research into whether people want the product or service the company intends offering may be minimal or even non-existent.
Without a properly defined market to aim at, the business is tempted to go after all prospects they can think of. This leads to sales staff wasting their time following up with leads that either never convert or are wrong for the product they offer.
Product or Service Development
Often in the course of business customers inform companies of features or benefits of their product, or their competitor’s products, that they like or dislike.
If the company simply includes every good idea into their service or product they may be creating a product that 1% of their customers finds “exactly” what they want but makes the other 99% of customers switch to another company because of the increased price to cover the development costs.
A company without a strategy for their product means all ideas are equal and there is no way to categorise them as helpful to their customer and prospect base.
Equally companies can innovate based on what they believe is the next product their market wants. Without some market research and test marketing they could end up spending money on wild goose chases that cost money rather than make money.
Sales
Without marketing, the sales team produce their own disparate letters, proposals and sales direction.
This is an ineffective use of time. Sales people should be out meeting prospects and customers as often as possible. They should be winning the sales with prospects they know are right for the business.
As sales staff come into the company they need training to understand the market they’re selling to and proven ways they can meet and sell to prospects in that market.
Without this sales staff are doomed to re-invent the wheel and create sub-optimal sales tools.
And of course without a marketing strategy and the tactics that follow the sales staff don’t know the best prospects to go for or the best ways to approach them to win the business.
Accounting
It may seem surprising that a lack of marketing affects the accounts function. But accounts hold the key company data about which marketing campaigns, which sales tools, even which sales people have been most effective.
If there is no strategy in place before sales begin, how do you know what data you need to keep analysing your sales effectiveness?
All the data may be held in the accounting system but there may be no way to retrieve it in a useful form to allow the company to analyse the best performing campaigns, tools and sales people.
Identifying great campaigns means you can repeat them, or modify them for a slightly different set of prospects. Identifying great sales tools mean you can concentrate on using and polishing those. Identifying great sales people allows you to analyse what they do so that other sales people can follow their methods.
Advertising
Companies without a marketing strategy are in danger of giving the wrong message, using the wrong media for their market, using a blanket approach to cover all bases, and not tracking lead performance against advertising
The result? Advertising is wasted on markets that have no interest in the company’s product or even that the right market doesn’t get the full message and consequently ignores the product.
After sales service
Companies which haven’t defined how they tackle customer service could lose out on their ability to make more sales through their after sales service.
A customer may ring up to check where they can buy spare parts, or because they misunderstood the manual. In the first example a marketing strategy guides whether the company offers spares. If not, what should they tell their customers to leave them with a positive view of the company?
If the manual is misunderstood is it possible that other customers may face the same misunderstanding? Is it worth editing the manual immediately, or is there another way the company can provide the information to the customer until the manual is edited and re-produced?
These decisions need to be made with regard to the strategic marketing direction of the company. Otherwise staff make their own decisions based on what they believe is right and which may cost the company money without benefit to the company, the customer or the future customers.
Ad-hoc Marketing
There are so many forms of marketing that SME companies use on an ad-hoc basis:
- Advertising
- Direct mail
- Email
- PR
- Referrals
- Telesales
- Web sites
- Yellow pages
Yet without a marketing strategy every one of these tactics could be:
- hitting the wrong target completely
- sending an inconsistent message
- not telling the whole story
At the end the company says, “that was a waste of time, we won’t do that again.”
Is Just More Marketing The Solution?
The short answer to that question is - No! Because using marketing tactics in isolation, as we’ve just noted, brings the risk that they’re completely ineffective.
About the author: Jim Symcox runs marketing consultancy Acorn Service.
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