Marketing is a blanket term that encompasses a lot of things like customer relations, advertising, and direct sales. While providing an excellent product or service to your customers is vital, marketing is important too. To create a killer marketing campaign, it is a good idea to understand what marketing is and why it is important. Here are a few things you should know to help you understand why marketing matters to your small business.
MARKETING MAKES CONSUMERS AWARE THAT YOU EXIST
Once upon a time, consumers learned about businesses through print advertisements, radio and television commercials, or the yellow pages. Today, while most of those things are still around, if you do not have an online presence> then the perception is that you simply don’t have a business. One of the great things about creating an online presence is that it can be done at a lower cost than any of those other methods. Internet marketing can be the great equalizer when it comes to getting exposure for your business in the coming year.
You will find out quickly why marketing is important if you are not doing it. No matter what route you decide to go, one of the primary purposes of marketing is to make sure potential customers know that you exist.
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MARKETING LETS CONSUMERS KNOW WHAT YOU CAN DO FOR THEM
It’s important for consumers to know that you exist, but it is also important for them to know what you do – and more specifically, what you can do for them. You may be well-versed in your product and think it’s self-explanatory, but think of it from the perspective of someone who has not heard of it before. Even if it’s a common product or service, you probably decided to sell it because you could offer something others couldn’t. Your audience needs to know what you are offering, how it works and why it’s better than what someone else is offering.
MARKETING PROVIDES SUSTAINED ENGAGEMENT
Marketing is not a “one and done” sort of thing. These days consumers have voices coming from everywhere – billboards and television, print and social media, and of course, the internet – all trying to get their attention. Even if a consumer had a great experience with you, that experience can be drowned out. Thanks to the internet, media, and wireless devices, you can easily maintain a relationship with your customers that lasts far beyond the initial shopping or service experience. This can include everything from updates on popular products to helpful information and coupons for new products or services. Maintaining a relationship with your customers ensures that when they are looking for what you offer, they will be able to find it.
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MARKETING WILL HELP YOU MAKE THE SALE
When you reach out to customers through direct mail, email, mobile alerts or any other form of communication, you’re often doing more than just sending them information about your product or service. Not only are you sending them information about a sale or an update to your services, but if you do it right, you are also giving them a way to access you. Think about it. If you send an email with a coupon code, don’t you also provide a link to your website? This is another reason why marketing is important. The more opportunities you give potential customers to access your store, the more likely they will be to take you up on your invitation.
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MARKETING WILL HELP YOUR BUSINESS GROW
The greater reach you have, the greater your business expands. When your marketing campaigns are going well, you will make sales. The more sales you make, the bigger your business gets. Marketing is vital to that growth. When you can engage customers and let them know what you have to offer and how that can benefit them, your business profits. It’s a win for everyone!
Without marketing, a business may not survive. Understanding why marketing is important and how it works will only benefit your business. It will help you reach out to and inform your customers to keep them engaged and interested. That often leads to increased sales and business growth. Sales and growth mean that your business not only survives but thrives! Marketing matters.
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So, how do you set your marketing goals for your business? Start by asking yourself these nine questions:
HOW MUCH REVENUE WILL YOU NEED TO GENERATE FROM YOUR INBOUND MARKETING EFFORTS?
Look at last year’s total sales revenue. Multiply that number by the percentage of growth that your CEO/board members desire. Now, how much revenue do you already have for the year? Add that to how much you expect to earn before year’s end, and compare. These simple calculations will help you come up with the revenue gap.
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HOW MANY SALES WILL YOU NEED IN ORDER TO ATTAIN REVENUE GOALS?
Now, divide the revenue gap by the amount of your average sale to find out how many new customers are necessary to meet your target revenue.
WHAT IS YOUR CLOSING RATE AND HOW MANY OPPORTUNITIES DO YOU REALLY NEED?
Not every opportunity to reach potential clients translates into a sale. What is your average closing rate percentage? Divide the number of sales leads by the number of closed sales. This percentage of closed sales will help give you the number of opportunities you’ll really need to generate the specific quantity of opportunities necessary.
HOW MANY SALES QUALIFIED LEADS (SQLS) WILL YOU NEED?
The number of SQLs you need depends on the number of employees on your sales team. For example, if you have two salespeople, then you won’t need as many SQLs as you would if you had ten. Unfortunately, SQLs generate qualified leads only about 5 to 15% of the time, though every business is different.
HOW MANY MARKETING QUALIFIED LEADS (MQLS) WILL YOU NEED?
If you don’t have many members on the sales team, you’ll need more MQLs than SQLs. Look at past data to find the average percentage of MQLs that led to a conversion.
HOW MANY LEADS WILL YOU NEED?
You’ve figured out your revenue goal and the number of new customers needed. Now, look at your lead-generation program, which shows the percentage of how many past leads have converted into sales. According to AmericanExpress.com, then “you can start to develop a precise target number of leads you need to generate.”
HOW MUCH TRAFFIC DO YOU NEED?
Look at the number of visitors you receive each month, then estimate your traffic leads conversion percentage.
HOW CAN I IMPLEMENT OTHER KEY BUSINESS GOALS?
While you’re looking at the metrics to measure the success of marketing goals, don’t overlook general business goals. Think about your mission statement and how it could help you specify other key business goals for which your company needs to collect data.
SHOULD YOU SET QUARTERLY BENCHMARKS?
You need to determine if your goals are being reached as the year progresses. Reflecting on quarterly figures can also help you redefine your goals if needed.
Remember, your business’s marketing goals form that indispensable roadmap to help your business get to where it wants to be. Prioritize your goals, and know that it’s okay to go back and adjust them as needed.
DIVVYING OUT YOUR DOLLARS
Now that you know how to set marketing goals for your business, it’s important to understand and create your marketing budget. After all, everyone wants their business to grow and make money, and that doesn’t magically happen by itself. Marketing is an absolute necessity. Unfortunately, some small and medium-sized businesses struggle with creating a marketing budget. Getting it right can ultimately be the difference between success and failure for your business.
WHY YOUR BUSINESS NEEDS A MARKETING BUDGET
For smaller businesses, especially when you’re just starting out, spending money on marketing can seem more like a luxury than a necessity. As you start the process it may be helpful to keep the following in mind.
- Nobody really spends zero dollars on marketing. Sometimes people will say their company doesn’t spend money on marketing because it is more of an afterthought than a budgeted expense. How much is being spent and on what is less obvious? An exact number may be unknown. However, some of the things you probably regard as standard costs of doing business actually fall into the marketing category. Did you get business cards printed for your salespeople? Are you paying for memberships in professional organizations? Did you pay someone to design and maintain a website or to design your company logo? These are all part of marketing. Even if you think you don’t have a budget for marketing, you probably do.
- Your competitors are spending money on marketing. Sitting by and waiting for your competition’s leftovers isn’t a good or effective strategy. Actively pursuing your share of the market is a far better plan to produce revenue.
- Creating a marketing budget may be necessary to secure funding. If you need to invest in your business, lenders will want to make sure you can pay them back. Creating a marketing budget will show that you’re fiscally responsible and have a plan for the money they are lending to you.
- Hiring professionals to do the marketing for you requires a budget. For many small and medium size business owners and entrepreneurs, turning over the marketing efforts to someone else makes sense. Successful marketing is a big job. A good marketing plan requires at least a few different techniques, along with the time and expertise for implementation and measuring effectiveness. If you’re hiring someone else to do the job, not having a budget almost guarantees the results won’t meet your expectations.
CREATING A MARKETING BUDGET
Creating a marketing budget starts with two pieces of key information you should already have: your company’s revenue growth goals and your ideal customers.
Let’s start with revenue growth goals. Having an end goal in mind makes it easier to figure out how to get there. A specific and attainable revenue growth goal can be broken down into smaller benchmarks to measure progress. The path to achieving your revenue growth will be much clearer. You’ll know how many more customers and sales you need with a goal number in mind, and it will be easier to know when plans need to be adjusted.
The second piece of information is your ideal customer. Spending on strategies that don’t target the right market is outdated and ineffective, and they won’t get you the results you want. You have to know who you want to reach and use the marketing strategies that are targeted to them.
HOW MUCH TO SPEND?
A general recommendation for small and medium-sized businesses when creating a marketing budget is to spend between 5% and 10% of revenue. Keep in mind, the final number should include a few other considerations:
- The industry your company is in.
- What marketing methods you’re currently using and plan to use going forward.
- How long your company has been in business. A start-up business may have to spend more on marketing to build brand recognition. A company with a brand that has a solid reputation may use more of their marketing dollars for customer retention. Those different goals require different marketing strategies that result in different budgets.
- Where your ideal customer is and how you need to reach them.
No matter what your budget is, you’ll need at least a few different marketing techniques to reach your ideal customers and the results need to be trackable. There are different metrics that can be measured and tested to help you know what works and what doesn’t.
By understanding the importance of marketing, setting a marketing budget, and measuring what’s effective, you will have a better idea of what your customers are really looking for and how to go about delivering that to them. It won’t be a guess – you’ll have data to back it up. You’ll have a much better idea of why customers buy from you and how to market to that. And when customer preferences and marketing techniques start to change, you’ll be prepared and know exactly how to move forward.