Marketing for Success

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Marketingfor Success
SCORE Counselors to Americas Small Business
Service Corps of Retired Executives
Describe your Product/Service (or figure out your
product or service?) Identify Target
Market Understand your Customer Identify
competition Determine your advantage Set
Marketing strategies Forecast Sales and Margin
All this Requires Market Research
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Marketing is the process of Creating the Desire
to Buy

• Marketing is EVERYTHING
• You Do To
• Promote Your Business
• and More

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Marketing Includes

• Sales
• Customer service
• Price
• Literature
• Market research
• New product development

• Product Packaging
• Distributing
• Promotion
• Advertising
• Employees

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Key Points

• Small business success requires the ability to
  market products and services
• You cant be all things to all people
• Key to success
• Segment, Differentiate, Promote
• Market research reduces your risk

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Key Questions

• What useful thing will you do or sell?
• Product or service description
• Who will pay you for it?
• Target market
• Why will they pay you and not someone else?
• Competitor analysis
• Will you make enough to make it worthwhile?
• Forecasting sales volume margin CASH FLOW
  PROJECTION

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Begin with Market Research

• Definition Study and investigation into the
  characteristics, spending habits, location and
  needs of your businesss target market, the
  industry as a whole, and the particular
  competitors you face.
• Critical to reducing risk, making better
  decisions, and improving performance
• Always necessary and often ignored . at
  your own risk

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Market Research

• Primary Research (bottom-up)
• Experience and informed judgment
• Interviews and questionnaire
• Surveys, focus groups and observations
• Your own records (for existing businesses only)

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Market Research

• Secondary sources (top-down)
• Trade associations, Publications
• Local banks, Chambers of Commerce,
• Consultants
• Census, Government and Industry data
• Libraries, Universities
• INTERNET

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Describe Products/ServicesPeople do not buy
things They buy what things do

• First the benefits, then the features
• Benefits - advantages desirability
• Features - Special attraction
• How is it different from competition?
• Can buyers easily understand differences?
• Will buyers value these differences?

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Identify Target Market

• Segment the buying public
• Find a segment where you want to play
• Clearly understand and define
• Major trends in your market
• What drives your product sales
• Discretionary/disposable income GDP
• Who will buy from you
• Use demographics to define buyer
• What are their motivations

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Understand Your Buyer

• Customers buy results (value)
• What the product will donot the product itself
• Price is not the only determinant
• Understand their needs, desires, goals
• Maslows hierarchy of needs
• Basic life needs - air, water, food, warmth,
  shelter, sex
• Safety-Security - law, order, limits, money,
  stability
• Belonging/Love - family, affection,
  relationships
• Self Esteem - achievement, status
• Self Actualization - self growth fulfillment

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Understand Your Competition

• How many direct competitors?
• How many indirect competitor?
• Can you identify top three?
• What are their strengths and weaknesses?

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Define Your Competitive Advantage

• Cost
• Buying power
• Distribution
• Technology
• Quality/Performance
• Technology
• Features
• Guarantees

• Service
• Customer service
• Strong sales force
• Extra services
• Customization
• Convenience
• Location
• Broad line
• Product bundling
• Hours of service

Define this for your target market (or niche)
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Define Your Strategies

• Selling
• Location
• Pricing
• Purchasing
• Promotion

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Selling Strategy

• Wholesale or Retail (B2B or Consumer)
• Direct sales staff or Commissioned Agents or
  Manufacturers Representative
• Internet Sales or Telemarketing or Catalog or
  Direct Mail

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Location Strategy

• Is location important to your customers?
• If customers come to your place of business
• Is it convenient?
• Is it consistent with your image?
• Is it what customers want and expect?
• Where is the competition located?
• Is it better for you to be near them or far?

Many startups run successfully from home for a
while
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Pricing Strategy

• Key element in determining cash income
• Know the industries pricing practices
• Cost plus designed to cover all costs
• Mark-up (keystone)
• Bid
• Added value
• Understand competitors pricing strategy
• Select a strategy that is consistent with your
  image and understood by the customer
• Requires constant study

There is a trade off between consistent pricing
strategy and responsiveness to market changes
(such as, Meet competition, Promotional/Seasonal)
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Purchasing Strategy

• Inventory level, mix and buying price is often
  key to profits
• Carefully plan inventory mix
• Must meet customers needs
• Utilize vendor information for industry trends
• Determine total dollar of inventory required
• Gross revenue/ mark up / inventory turns
• Select multiple reputable vendors
• Move obsolete inventory quickly

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Promotion Strategy

• Develop a clear, consistent, believable message
• Differentiate your product from competitors
• Emphasize benefits first, then features
• Support it with credible facts
• Make it easy to remember and understand
• Motivate the buyer to buy now
• Select the right media - must reach target
  customers and deliver your message
• Communicate quickly, cleanly concisely
• Repeat it often
• Do not Stop Start - Develop affordable, annual
  budget

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Annual Budgetstart-up maintenance

• Avoid start / stop advertising
• Set affordable ad budget as of revenue
• Perform cost/ benefit analysis
• Track sales outcome from each ad strategy
• Compare it to the cost
• Decide if it is worth it

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Low Cost Marketing

• Easy to remember Company name/Tag line
• Business cards
• Website
• Brochures
• Flyers
• Thank you notes
• Signage
• Samples
• Guarantees
• Newsletters e-mail blasts

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Creating your Brand

• Whats in a name?
• Make sure you can legally have it register it
• Visualize it in a headline Your Name here
  Reports Rapid Growth
• Make sure your name tells what you do
• Make it easy to remember
• Do you want to be listed first in the yellow
  pages?
• Convert your differentiating points to customer
  benefits This can become a slogan
• Design your logo . This can becomes your
  identity
• Consistency is beauty
• Your Name, Logo and Slogan appear on everything!
• Your Benefits appear wherever practical

REMEMBER A brand without an image is only a name
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About Service business

• Service is customized and tailored to meet
  customers specific needs
• Service provider sells on performance
• Often difficult for customers to value service
• Service providers must educate customer
• Key differentiators
• Credentials Experience
• Evidence of performance to satisfy the customer
• Ease of communications
• Support facilities Technology

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More Low Cost Marketing

• Networking
• Word of mouth
• Referrals
• Testimonials
• Recruit cheerleaders
• Public relations
• Alliances

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Marketing StrategiesQuickest to slowest results

• Direct contact follow up (telephone, cold
  canvas)
• Networking-Referrals
• Public Speaking
• Writing-Public Relations
• Promotional events
• Advertising

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Service business Marketing

• Keep track of leads
• Follow up (But do not be pushy)
• Keep in touch
• Establish chemistry
• Dont criticize competition
• Limit range of options or choices know how to
  say no (without losing prospect)
• Keep client SOLD after the sale
• Dont Over-Promise Over-Deliver
• If you exceed estimate let client know in
  advance not after the fact
• Keep good records discussions, decisions and
  correspondence
• Five commandments
• Listen to the prospect
• Ask Questions that uncover real needs and
  concerns
• Prepare what you will say
• Demonstrate experience and need
• Be flexible in your presentation to reflect
  reaction and concerns

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Internet

• Communicate
• Educate
• Advertise
• Sell (e.g. ebay)

Easy to navigate Relevant and concise An
information source Links
Promote web address in all communication
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Forecast Sales MarginsEducated view of the
future with data which can be defended

• Start with Market Research
• Disaggregate product lines or services for
  improved estimates
• Make reasonable assumptions (list them)
• Census data
• Demographics competition
• Spendable income and growth patterns
• Industry data
• RMA, DB, Bizstats, Trade Association data
• Vendor input and own or other data
• Constructive estimates
• Pre-sold contracts / Commitments from buyers
• Market research and focus groups
• Historical experience own or others

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Sales Volume-Margin Forecast
Month ? 1 2 3 4 5 6 7 8 9 10 11 12 YEAR
Number of units you expect to sell
Average sales price
Average cost of sale
Gross margin price - cost
Gross Profit Sales units x gross margin
Develop it here and reuse it in the Cash Flow
Forecast in the Financial Section
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Customer Buying Fears

• Can I get the product/service cheaper some where
  else? Moneys worth.
• The product wont do the job as promised
• What other people think
• Procrastination

Overcome them with proof, testimonials, and
guarantees. Answer in your presentation
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Close the Sale

• Buyer must understand your message
• Briefly summarize the benefits
• Quote your price and ask for the order
• Be clear and direct - then shut up
• When you get your order - LEAVE
• Sell honestly and with integrity

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Success Marketing

• You cant be all things to all people so Segment,
  Differentiate and Promote - Find a niche and
  become known for it
• Choose simple, effective strategies and do them
  over and over and over
• Rely on Persistence Effect, not on Wishes
• Market the RESULTS of your work, not the process
  you use
• Ask the people you already know for help

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Use Free Counseling from

• Our mission is to help small businesses succeed.
  
• We accomplish this mission by
• Educating
• Counseling
• 
  Mentoring

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CongratulationsThank You!Keep in
touch.www.scorehouston.org
SCORE Counselors to Americas Small Business
Service Corps of Retired Executives