Marketing – for Dummies?

Isaac Mostovicz writes...

How frustrated can you be when trying to budget a new marketing drive all you get from your marketing specialist is, “Half the money you’ll spend on advertising is wasted; the trouble is I don’t know which half.”

Isn’t it intimidating to try to assess the budget of something that has unknown value?

Don’t you feel trapped when you have no idea what effect the increasing or decreasing of your marketing budget will have on your sales?

Looking at your marketing plan, can you tell what it promises and on which basis?

Can you decide with certainty, when you don’t know how long it is going to take before the campaign is going to impact your sales and deliver value? Also isn’t it difficult, trying to decide when you can’t foresee when the campaign will create the desired audience effect?

Most importantly, we decide because we trust that the promise would be delivered. Looking at your marketing plan, can you tell what it promises and on which basis?

Your concerns are real. You should be able to take sound financial decisions with each marketing drive. A strategic marketing approach will help to translate your marketing activities into financial terms and will provide you with the necessary freedom and confidence to accurately decide on any marketing drive.

What is strategic marketing approach?

All marketing initiatives are investments like any other ones. You should be able to estimate their ROI, risks and duration. And, you should be able to control their success using preset financial parameters.

Marketing presents a challenge. On the one hand, our purchase decisions are emotional and irrational. On the other hand, a business uses logic and rational tools for making a sound decision. There is a clear gap between marketing, which is informed by psychology, and business that is based on economic rules.

The role of strategic marketing is to close the gap between these, seemingly unbridged disciplines of management and marketing

The role of strategic marketing is to close the gap between these, seemingly unbridged disciplines. I close this gap, that is what I do! Closing the gap enables you to freely, and confidently decide.

Since we deal with closing the gap between the offer and the client, all we need to know is that clients with needs exist! This strategic marketing approach is adaptable to all kind of interactions, B2B, B2C, mass marketing or one-on-one type. This approach succeeded in marketing luxury items to fertilizers, using all types of offers. Currently, I work with charities helping them raise donations.

I also work with startups. While they don’t have an offer yet, we can identify the needs that our future offer will satisfy. The identified need will then influence the development of what we offer.

Let’s examine the three steps strategic marketing follows and see how these can be financially measured.

  • Step 1, identifying your clients’ needs – who, what and why
  • Step 2, determining how to communicate with the clients
  • Step 3, monitoring the success of the strategy

Your clients’ needs – who, what and why

The first question is, who is your client? We are not looking for a socio-demographic description but for a psychological profile. We want to sell, and nobody will purchase if they are not motivated. Motivation results from existing, unfulfilled, need that we need to discover first.

This motivation creates tension. “I don’t want to stay in my current situation” but this doesn’t mean that the clients know where they want to be. They are looking for us for help. Sometimes, they declare what they want to purchase, they tell us about their idea of a solution but, most of the time this “solution” is only a disguise of their tension.

Therefore we cannot ask “What do you want to purchase”, because we risk not getting the right answer. If we follow the clients’ “solution” they might stay unsatisfied. Only by understanding the true needs of the client we are able to offer a true solution.

The market is segmented, and different clients will have different needs and different motives.

But even when we identify the right solution, why would the client select you when others are happy to provide a similar solution? Failing to answer this question will result in competition you won’t be able to compete with.

Moreover, there will not be one solution that fits all. The market is segmented, and different clients will have different needs and different motives. You cannot start marketing your offer before understanding your market and your clients’ needs. You will need to know your strengths and weaknesses, as well.

This market research is relatively simple and short. In many cases, it will only require 50 to 100 work hours. About half of the hours will be spent on face-to-face interviews. In any case, you will have a fair idea of the scope of such a project.

Communicating with the client

You now know who your clients are. You will also know their needs and even know why they chose you. Now it’s time to communicate with your client and tell them about your offer.

The question is, how will you communicate the offer? The answer is, it depends. It depends on the type of offer. Will you interact on a one-on-one basis, or by mass marketing? It also depends on where your customer will learn about your offer, on or off line. The answers to these questions will help determine how you spend your money on advertisement and promotion.

Recently, a major accounting firm asked for my opinion on their forthcoming campaign. They wanted to get more customers and their marketing specialist proposed using social media and beefing up their website with good SEO. They also recommended advertising on Facebook and Google, to name a few ideas. When asked, I wondered which of their customers will ever pick them up by g Googling then select the first firm at the top. Also, whether their potential customers will relate serious accounting service with a Facebook ad.

From the entire, and fancy offer, l suggested they redo their website only. We discovered that their marketing people, while talking to the clients, have them look at the website for business purposes. “All you need is a clean, appealing, and simple website. I told them, this kind of website would allow the client to focus on the conversation rather than the website.

The firm missed out! They didn’t identify the needs at all and didn’t segment the market. They firm jumped ahead, communicating with the potential customer in wrong places. The right customers were not present and the firm missed the right opportunities to find them. Even without conducting full research, I suggested better ideas that were far more productive, and much cheaper, than what their marketing specialist offered.

As for you, it should be relatively easy to decide on the means of communication that you’d like to use. You can prioritize and correctly allocate your budget. You will feel secure and confident that you know how to invest your money.

Monitoring success

The first two steps are about planning. As you are well aware, of not all plans are successfully realized. While strategic marketing approach focuses on satisfying the clients’ needs it also uses your financial performance as a parameter for measuring success.

Two ways exist for increasing earnings, selling more and/or selling at a higher margin. Luxury items, for example, commands higher prices and enables better margins. The reason is that luxury items satisfy the deepest personal need; it enhances one’s self-esteem. The deeper the need we satisfy, the higher margins we can get. That’s why Starbucks manages to sell its coffee at higher prices. I dealt with luxury item marketing for almost forty years. It follows a set of well-defined rules that can increase margins of any offer.

The deeper the need we satisfy, the higher margins we can get.

Selling more results from identifying more clients. Correctly done research will help you identify the psychological profile of your customers. By doing so, you will properly identify your potential customer as well as where and how to reach them.

Using your financial reports as an acid test, you can check your marketing drive and be able to monitor, refine and maximize your profit potential.

Competition and die-hard fans

You might ask how you can raise prices when the competition is breathing down your neck. You are worried that your clients will compare prices and look for the cheapest offer. You are wrong!

One of the myths in business is that competition is based on logic and/or economic parameters. This myth claims if we are able to compete well, beat our adversaries, and provide a better offer then we will win. I know this is what we want to believe. Economists try to persuade us that price competition helps our economy. Being price competitive could be the most imminent danger to a company.

When a price war is launched, some will have to close their operation while others will barely survive. Ultimately, nobody will benefit. Just look at the boxing ring. The loser is knocked out and the winner is not far from it, ending in the hospital with brain damage as well.

Nobody, including you or even the most fanatical economist buys on price.

Let me say it loud and clear, Price doesn’t matter! Let me repeat it again, nobody, including you or even the most fanatical economist buys on price. If you like an offer and you can pay for it, you will buy it. Do discounted meals cheap auto repairs make the car run better or discounted dresses look better?

Remember what I said earlier, a discount is a pain, a problem disguised in a “solution”. The customer needs something and it is not a cheaper price. Do you really know what your customer really wants? For over 35 years I worked in one of the most competitive environments, the diamond industry both in B2B and B2C environments. I met many clients who bargained with all their might to get my diamonds at a cheaper price. Somehow, I always managed to sell them at prices well above the current market price using honest marketing tools. I just answered to their true, inner needs. You can do this, too.

Since nobody likes to compete on price, companies try to propose a unique offer. This is going to fail as well. If one wants to stand out, wearing a red hat, the other will do the same wearing a red one and so will the third one, wearing a yellow hat. They’ll all be uniformly unique and nobody will improve his position.

So, let’s try to find out a way not to compete. This idea is the basis of “Blue Ocean Strategy”. Metaphorically, instead of swimming in the red ocean where fish fight with each other let’s find the blue ocean where nobody disturbs us. While I like the book, and use many of the ideas presented there suggesting avoiding competition is wrong. Our cognitive process is based on comparison and contrasting. When we have a unique, incomparable offer we are lost. We can’t correctly value it.

If your stomach is constantly in knots because you’re asking yourself how much longer your company will last let’s talk. Contact me at help@Imos.to.

There is no need for having a unique, outstanding offer. We need to compare. Comparison enhances our basic need of choosing. However, as marketers we can decide on what to compare our offer to and how to influence the choice. When done successfully, people start to “own” the offer and see it as part of them. For example, this is what happened to Harley Davidson fans. If the clients consistently choose our offer they will create a bond with it and become die-hard fans.

Strategic marketing is very structured and easy to follow, step-by-step. Once you correctly invest you’ll strengthen your brand, create higher profit margins, render your competition irrelevant and open new opportunities for growth. You’ll transform your loyal customer base into “die-hard” fans.

So, If you’re staying up late at night worried about your business crashing, your stomach is constantly in knots because you’re asking yourself how much longer your company will last – and the crazy thing is, you know if you can change your money flow by just 20% to the positive, everything would be fine, let’s talk. Contact me at help@Imos.to. I might help you stopping the money hemorrhage and help you treating your marketing budget as an investment.

 

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