Essentially every company, from the smallest startup to the largest multinational corporation, is revenue dependent. Revenue is the lifeblood of business. Without it, no enterprise can survive.
It’s not surprising that entrepreneurs spend a lot of money, time and effort on marketing their products or services in the hope of generating revenue. Yet it’s amazing how often these same business owners throw large amounts of cash into marketing schemes that do not yield sales.
When developing a marketing plan, there are a plethora of options. Depending on your business, it may be most cost effective to advertise in print media, on the radio or on television. Direct mail is successful for some types of businesses. Internet marketing or an aggressive social-media campaign may be best. One-on-one networking can be very effective. Perhaps an intense public relations campaign focused on educational marketing would yield results.
The options are enough to make your head explode. Unfortunately, there is no one size fits all solution to what is best for your particular business. However, answering three questions will lead you to the marketing mix that will work best for you.
1. Why would a prospective customer buy your product or service rather than a competitor’s?
Every small business must be able to answer this question. If you can’t, it’s probably best to cut your losses and find a job.
It’s unlikely that very many prospective customers will buy your product or service if you can’t even articulate why they should. Once you have successfully answered this question, you have identified your competitive advantage and the message that you need to deliver to prospective customers.
2. Is there a segment of the market that would value the things that differentiate your product or service and is it large enough to support your business?
Being differentiated from your competition is necessary, but not sufficient.
The silly example we often use is skunk-flavored popsicles. There is nothing in the market remotely like them. Unfortunately, it is unlikely that there would be much of a market for such a ridiculous product.
If the segment that values what you are offering isn’t large enough to support your business, return to the first question -- you need to find a new answer. If your target segment is sufficiently large, it’s time to determine how best to deliver your message.
3. What is the most cost-effective way to reach this segment with the message that your product or service is different?
There are a large number of options to consider. In sorting through them, remember that cost effectiveness is, in part, a function of the mechanism you use to deliver the message. It is also a function of the effectiveness of the message itself.
Is a message that is delivered through one channel more believable than the same message delivered through a different channel? Is your creative attention grabbing and believable? You’ll have to assess all of these things to determine the best way to deliver your message to your target market.
Once you have determined the message you want to deliver, to whom you would like to deliver it and how you will deliver it, test and learn.
Develop a test that is as inexpensive as possible, but sufficiently large to allow you to read the results. If it appears to be working (netting you more revenue than cost), roll it out on a larger scale. If it doesn’t work, revisit the questions and try again.
Don’t be surprised if it takes multiple iterations to identify the most effective marketing mix for your business.