24 Oct 2010

Marketing Plans? How Important Are They?

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Marketing Plans come in all sizes. They are used for small businesses as well as billion dollar companies. Some marketing plans are used while others are stuffed into a drawer somewhere and never to be looked at again.

Why are marketing plans created in the first place? For most, it is for the hope that if a plan is decided upon, a map if you will, then we will surely reach our goals.

Yesterday, a client referred me to a company that is in great need of a game plan, a marketing plan, if fact, any kind of plan would be helpful for this company.

After exchanging some pleasantries, I asked some probing questions pertaining to their goals, short term and long term? What have they tried so far? Did it work? Is there a Budget? How are decisions made? And I had a few more questions to get the ball rolling.
They had already went ahead with some of their “thoughts”, spent ½ million dollars which created 3000 units of their product. When I asked them how many they had sold so far in the last year, I was a bit shocked. Seven, is what they had sold!

What was the plan to sell the rest? Well, they loved their product so much; they thought that “word of mouth” would surely get the final 2993 sold.

Now, don’t get me wrong, I wish it was that easy and I love the thought of referrals but without a plan, this inventory will grow old with us.

When I asked a further question as to whether any outbound calls had been made to their target market, he said they had not made even one call.

There was no plan, no real thought as to how this business that they hoped to go national and then international would happen.
The author of “Seven Habits of Highly Effective People”, Steven Covey, says to “begin with the end in mind”. Does that sound something like a business or marketing plan idea to follow? You bet it does.

When I asked them why they purchased 3000 units, they said it was the best price, based on volume. Now, how’s that for a plan?
As you can see, I have not mentioned who this company is. It’s not because this is not a true story because it most certainly is. It is because I always protect my clients and because they are not unique. This is a very common problem with businesses. They are very good at what they make or the services they offer but when it comes to planning, especially a marketing plan and budget, they are lost.

This article does not have enough space left to explain a full marketing plan but one of the key elements is to know the value of a customer. Why? If you know the value of a customer in dollars, you will know how much money to set your marketing budget for.

Here’s a simplified formula.

1. How much profit do you make on a new client in one year?
2. How long do you keep a client?

By knowing just these 2 things it will help you know how much money you could spend to get a new client. Now, how many new clients do you want?

Of course we can make it more sophisticated but the whole idea is to get started with your very own marketing plan. Good Luck!

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