One of the biggest mistakes new entrepreneurs make is to underestimate the power of marketing. Right from the earliest days of a startup, it deserves a seat with the big boys: finance, HR, operations, product development and sales. It should not be an after-thought. And it’s not fluff.
“Marketing is a core part of the business strategy,” says Ravi Dindayal, Director of Marketing Consulting at the Business Development Bank of Canada (BDC). “Marketing isn’t just driving traffic, ads for online advertising and bothering people with email. It is understanding your customer segments, your value proposition, all the things fundamental to how you tell your story, how you market yourself and what you’re selling. To me it really starts here.”
As a business owner, you’re conducting market research all the time, whether you’re aware of it or not. Every time you talk about your business to a prospective customer or check out the offerings and prices of your competitors, you’re engaged in market research. But you’ll need to be systematic about collecting and recording your findings.
“Most entrepreneurs are starting out because they’re passionate, they have a hunch, they sense the market is there,” says Dindayal. “But at a certain point as a business owner you have to stop and figure out how to invest in market research.”
For DIY market research, you won’t find a lot of good-quality secondary information. Statistics Canada is a good and reliable source, but it can take more time than you may have as an entrepreneur to navigate through and locate the information you need. You can hire a market research firm, including the BDC, but that quickly gets expensive. Or you can use an online survey tool like SurveyMonkey. Put together a list of thirty people you think might fit your customer profile, including friends and family, and ask them a series of questions designed to provide insights into the market related to your products and services.
KPI and High-Value Customers
You’ve no doubt heard the saying ‘the customer is king’. In today’s digital marketing world, it is ‘the right customer is king’. Dindayal says it is common for businesses, whether they’re in the micro (<$2M in revenue), mid ($2-50M) or high impact (<$50M) size categories, to lack an understanding of their high-value customers. You want to ensure your limited resources are targeting the right customers.
Identifying those high-value customers requires a dashboard system of key performance indicators (KPI). It doesn’t have to be fancy, a series of excel spreadsheets will do. You’ll want to collect data that tells you how much time and money you’re spending on a customer and compare it to what they’ve signed up for. “If they’ve signed up for an $8/month subscription, and you’re spending 8 hours a month serving that customer,” explains Dindayal, “those are the customers you should send to your competition.”
Marketing Strategy vs. Marketing Plan
Don’t confuse a marketing strategy with a marketing plan. They’re different beasts, with different purposes.
- Provides you with a roadmap to accomplish your business objectives and achieve results, like better market penetration and sales growth.
- Is a collection of medium-term and long-term methods that won’t change year over year, unless something major changes, like a change in legislation, a big new competitor, or a shift in consumer behaviour, and
- Helps ensure you’re focusing resources that attract employees, partners and customers, using only those initiatives that support your overall business objectives.
- A collection of the marketing tactics and initiatives you’ll implement for the given period – monthly, quarterly, or annually
- Changes at least annually to address opportunities, threats, and competitive actions, and
- Includes budgets, deadlines and well-defined responsibilities.
Marketing as Differentiator
Are you giving marketing the respect it deserves? Look at your business and ask yourself how you’ve been treating marketing: as a fluffy afterthought or fundamental pillar. Then make changes to leverage the power of marketing.
“The companies I see that are really successful are led by entrepreneurs that have their marketing hat on from the beginning. They understand that marketing is an essential part of the business strategy. This is a differentiator.”
This column was originally published by Troy Media.