This is often the time of year that I'm asked to help clients prepare a Sales and Marketing Plan. They usually pull out a somewhat dusty binder, and I often cringe when I look inside.
Sound familiar?
We've all been taught the academic version of a Sales and Marketing Plan: the 4P's (or in some cases 5), revenue forecasts, and so on. Instead of focusing on the "same old" boring stuff that really just documents what we already know, or guesses at what results will be, I want to encourage you to develop a Sales and Marketing Plan that drives results.
What's missing from conventional Sales and Marketing Plan binders are 5 Winning Marketing Objectives and Strategies:
1. What Customer Profitability Management Strategies will we use this year?
This should include a Customer Profitability Analysis that ranks your customers from most profitable to least profitable. If you don't currently measure profitability per customer (and its tough to do that in many industries), then start with your revenue numbers. Adjust them on a "gut feel" basis to identify customers who always negotiate aggressively for discounts, only buy the less-profitable products in your mix, who have high service demands. That customer segmentation will help you make good decisions about how to invest to:
• Retain existing customers: Retention is crucial and you should have a formal retention plan for at least the top 20% of your customers, as they're your make or break segments.
• Regain lost customers: You have a much higher possibility of bringing back a lost customer than closing a new customer, so ensure that you're finding out why they left, fixing the problem if it's fixable, and then giving them a compelling offer to return.
• Reactivate inactive customers: Do you have customers who used to do business with you but you haven't heard from them? They're either "dead" (have no further need for your products/services for some reason) or sleeping (they could do business with you again). You need to find out which is which, then stop any marketing spending on "dead" customers, and re-awaken sleeping customers with an attractive offer that meets their needs.
• Regenerate profits from unprofitable customers. Look at this from two perspectives: Are they unprofitable because of their own behaviors, i.e. buying, negotiation, or service patterns? Or are they unprofitable because your pricing policies or service practices are out of alignment? Re-think how to better serve unprofitable customers to return them to profitability. If you absolutely cannot return them to being profitable for you, fire them gently by sending them to the competition, and let your competion lose money on them.
2. What Growth Strategies will we pursue this year? What are our goals?
• How well do you leverage the Loyalty Accelerator? No, I'm not talking about whether you have a Loyalty Program of some type. The question you need to ask is whether or not your customers give you referrals and testimonials that help you build your business faster. If they don't, the first strategy is to find out why not. Ask them about their experience with you - not via the usual "customer satisfaction survey", but in person.
• Migrating Customers to a Higher Share of Wallet. When you complete your Customer Profitability Analysis above, pay special attention to the 80% of your customers at the bottom. Your "top 20%" may already be doing all the business with you that they can. Research shows that there's a 5-30% probability that you can grow your business with smaller customers. Find out what your current "share of wallet" is with them. Do they spread purchases amongst several suppliers? Could you save them time, save them money, solve a problem or give them peace of mind by consolidating their purchases?
• Dominating your Ideal Client space: You Ideal Prospects are those who look like a lot like the ones at the top of your Profitability Assessment, and there are a limited number in any market. Take the time to define that Ideal Client, and then determine how you can better reach them - with alternative distribution strategies, messaging, or tweaks to your existing products and services.
3. What is our plan to fine-tune our Strategic Pricing this year? What are our goals?
Getting your pricing right can add 25-60% to your bottom line, but often gets ignored, because none of us were ever taught different pricing strategies that are easy to implement. Look for less-visible prices such as after sales service, and increase them modestly to reflect the value you provide. Consider bundling or unbundling to change the playing field on your competition and allow you to price for value without a direct comparison. Always ensure that updates to your pricing reflects value you deliver, not gouging.
4. What is our Customer Service plan for this year, to increase efficiency and effectiveness?
What are our goals? You can save a bundle on your service costs, just by eliminating what I call "self-inflicted wounds". Those are the costly service issues that result of some failure on the part of your company. Late or incomplete orders, unhelpful staff, and just a couple of other categories drive most of your service costs. Figure out the most common service issues, fix them for good, and you'll see savings drop right to your bottom line.
5. What Profit Levers can we address this year by re-thinking how we've always done things?
What are our goals? Profit levers are hard to explain in a short paragraph, essentially you need to look at all categories of marketing costs and eliminate any that no longer add value to you or to your customer. Expensive glossy catalogues when a value-add link to a website would do is a common example. Outdated yellow pages ads are often a culprit when these days many of your customers may simply do a google search. Revisit every "we've always done it this way" expenditure, and you'll find savings that drop right to the bottom line.
Next Steps
Now, answer those questions, and your Strategic Marketing Plan will take on a whole new meaning and purpose with customer-focused products, services, and business development plans, and with pricing that reflects the real value you offer. Now THAT's a Strategic Marketing Plan that delivers bottom line results!