A Marketing Plan defines exactly how a business intends to attract the numbers of customers required to achieve its objectives.
Why create a marketing plan?
Small businesses often struggle to grow because they:
- Fail to allocate sufficient funds to marketing
- Waste their budget on ineffective marketing
Marketing planning will define the budget required and help prioritise marketing options that deliver the best return-on-investment and the lowest cost of customer acquisition.
How to create a marketing plan?
Marketing connects those with a ‘need’ to those with a ‘solution’ to their need.
A ‘prospect’ is someone who has a current need, is aware that you offer a solution, but has not yet chosen your company in preference to competitors.
A ‘suspect’ is someone who you suspect may have a need and may not be aware of your solution. They may not become a prospect because they may have only just bought from a competitor and hence there is no longer a current requirement.
You have 2 conversion rates to consider:
- Prospect-to-Customer – an indication of your selling success
- Suspect-to-Prospect – an indication of your marketing success
Depending on the type of business you may convert prospects to customers by different means or a combination of means e.g.:
- In a meeting
- By telephone
- Via a web site
This is the point at which the prospect says yes and becomes a customer.
The conversion rate prospect-to-customer may be quite different for each of these, for example 50% for a meeting and 5% for a web site.
There are many promotional options to market your solution to ‘Suspects’; from personal networking to Internet search engines.
This conversion rate is likely to be lower than that of prospect-to-customer, for example 5% for networking and 0.5% for Internet search engines.
How many do you need to target?
Your business plan will show your growing customer numbers each month so you can calculate how many suspects your marketing plan has to reach.
For example, let’s say for a specific month you plan to acquire 10 new customers:
If your conversion rate customer-to-prospect is 50% you will need 20 prospects.
If your conversion rate suspect-to-prospect is 5% you will need to target 400 suspects.
It’s very easy to say that you want to acquire 10 new customers in a month, but it might be quite a different matter to network with 400 suspects.
So you might decide to try direct mail instead.
But the conversion rate will no longer be 5% it may only be 1%, so now you will need to target 2,000 suspects.
Many small businesses underestimate the level of marketing required to reach even modest growth targets. That’s why they struggle to grow.
Your Marketing Plan should detail exactly how you intend to reach the numbers of targets estimated to be needed to attract the numbers of customers required to meet your objectives.
How does Sightpath create a marketing plan?
Sightpath is an advocate of value marketing. We always start with the lowest cost marketing options first and work our way up until we’ve generated a marketing plan that will deliver the growing customer numbers required to achieve your ambitions.
We use a 3-stage process for Marketing Planning:
- Model current promotional activity – Model the current promotional activity generally undertaken by your business
- Close the gap – Add new promotional activity to close the gap between the number of new customers acquired from Current Activity and the number of customers required in the business plan
- Rebalance the plan – Once we have real marketing activity planned, it may alter the estimated Cash Requirement, so we rebalance the business plan
Our system enables us to brainstorm all your marketing options in the same system that we’ve already modelled your business plan. This enables us to develop the most appropriate Marketing Plan for your situation with the best return-on-investment and the lowest cost-of-customer acquisition.
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Please contact us for an initial consultation with one of our Business Catalysts.
Save yourself time, money and frustration with a Sightpath Business Plan.