Question

Topic: Strategy

Small Business Marketing Planning

Posted by mgoodman on 9/7/2007 at 5:03 PM ET 1000 Points
For those of you involved in small businesses, I’d be interested to know if you have formal marketing plans or not.

If you do, what do you see as the main benefits? Any major drawbacks? Is the marketing plan tied in to a business plan? How frequently do you update the plan?

If you don’t have a formal marketing plan, why not? Was it a conscious decision not to have one? Are there some barriers that seem too great to overcome? Explain please.
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RESPONSES

  • Posted by ilan on 9/7/2007 at 5:21 PM Accepted
    Just to give you the other side of the coin. From the brand consulting side, or the ad agency, or the marketing consultant, call it whatever you want that's what I do.

    I am working now with many small business owners (from $500,000 to $30 million in sales)
    I am shocked to discover how many of them, almost all, don't have a business plan, and are flying blind.
    Only when the ---- hits the fan, they come for help.
    I've seen brand new businesses that succeed because of some technological advantage, but that only lasts for about 6 months these days.
    And I've seen the sons of business founders who took over and have no idea what to do with the business for the next 30 years...

    In the past I worked with Fortune 100 companies, the ones you would think have a business plan. Well, they have a plan to satisfy the current CEO and his cronies, in many cases, the successful mavericks of the business world today know exactly what they do because they have a great business plan AND THEY IMPLEMENT IT!
    Obviously, having a plan in your desk drawer isn't worth much.
    As for updating the plans, I don't see this either, because there aren't many to begin with. I would say that most of the plans I see are involving people who are completely focused on one aspect of the business: money.
    Not much else.
    There are no plans to educate, train and develop the workforce, no plans to groom the next generation of bright managers, and very little in equipment development or infrastructure.
    Just a small point of view.
  • Posted by Jay Hamilton-Roth on 9/7/2007 at 7:29 PM Accepted
    Most businesses I work with don't have a strategic marketing plan, and that's the first thing I work with my clients on. Without a clear understanding of what the organization is about (and their message), who their competition is, and what they hope to achieve, they send mixed messages in all their communication. The strategic plan focuses on WHERE they want to take their business, while the business plan focuses on HOW to get it there.

    And yes, I have a strategic marketing plan for my business.
  • Posted by mgoodman on 9/7/2007 at 9:37 PM Author
    Ilan and Jay:

    Thanks for your responses. I accept what you say about most buisnesses not having a strategic marketing plan, but WHY do you suppose that is? Is it that they don't believe it has value for them, or because they've just never had one (i.e., habit), or that they're not aware of the need for one? Or is there some other reason? Is "planning" a dirty word for action-oriented entrepreneurs?
  • Posted by Jay Hamilton-Roth on 9/7/2007 at 9:47 PM Member
    In some cases, I think it's lack of proper guidance (or lack of knowledge).

    In others, a perceived lack of time to "get it out the door".

    And still others, something that's a good idea for the "big boys", but when it's just you and the telephone, it seems silly to spend time coming up with a big plan.
  • Posted by darcy.moen on 9/7/2007 at 11:05 PM Accepted
    I work with many Mom and Pop businesses that usually d not have a marketing plan at all. I also work with large corporations that also do not have a formal marketing plan in place.

    Most businesses that do not have a marketing plan in place are stuck in reactionary mode, meaning these businesses tend to react to competitive forces that surround them. Reactionary is not exactly the best position to be in when it comes to running a business. Going from crisis to crisis means snap decisions, and snap decisions are not always the best decisions.

    We work with clients to take them from a reactionary position to a PROactive position by planning at least one quarter of a year in advance. We work had to make advance plans with our clients and place marketing programs into production for immediate and near future needs. Of course, we also place measurement tools to quantify and qualify all marketing efforts. Amazing how when you measure marketing efforts and insist on performance from every dollar spent, suddenly the client takes notice. When one can prove that marketing produces quantifiable return on investment results, it almost becomes fun to plan ahead.

    Once you have made your plans and acted upon them, your competitor now has to react to your efforts. You are now in a better position to react to competitive forces. Always nice to be in the lead, isn't it? Plus, regardless what a competitor does, the damage is always limited as you are already out in the market.

    Planning on the surface seems 'limiting'. Many entrepreneurs thrive on running footloose and fancy free. Planning feels 'restrictive' to many. Not having a plan equates to not doing your P & L or monthly expenses. Once folks get their heads around that planning can be liberating, its an uphill fight.

    Hey, if was easy, there wouldn't be a need for consultants.

    Darcy Moen
    Customer Loyalty Network
  • Posted by mgoodman on 9/8/2007 at 4:57 AM Author
    I notice that so far only one person has indicated that he has a marketing plan for his business, while three sidestepped that question. I'm guessing that's because as a group we are not terribly different from the clients we serve when it comes to committing our marketing plans to paper.

    I'm certainly not chiding us for not following the same advice we give clients. "Do as I say and not as I do" is still operative. What I'm wondering is if there are situations where formal marketing (and business) planning are less helpful than others. For example, if you're a one-person professional practice, or a small two-person agency, maybe a formal marketing plan is more trouble than it's worth.

    We're all very good at explaining why clients need marketing plans. What about "the shoemaker's kids?" Is there something special about our practices that makes them exempt from the benefits of having a marketing plan?

    And, by extension, are there some businesses for which marketing plans are more important than others? If so, which ones, and how do we recognize them?
  • Posted by mgoodman on 9/8/2007 at 10:48 AM Author
    Thanks, billn. Your point is well taken ... and very interesting. And Christensen is a very insightful business thinker generally (and an excellent communicator too).

    But if you don't HAVE a marketing plan, can you deviate from it when market conditions so dictate? In your example it sounds like the organization had a strategy of helping the poor to be more comfortable in winter, and they didn't deviate from the plan at all -- even though the product performance characteristics changed.

    Contrast that to a not-for-profit that one day raises money for Save the Children, and the next day opens a soup kitchen, and then recruits people to march on Washington, and the next day starts making sweaters for the poor.

    They have NO strategy at all, and simply react to whatever someone thought of that morning.

    I guess what I'm challenging is your statement that "what makes [many companies] successful has little to do with a business plan, much less a formal marketing strategy."
  • Posted by lloydmerriam on 9/8/2007 at 1:18 PM Accepted
    Personally, I've never had a formally written marketing plan, although I have copius notes and a TODO spreadsheet that I update regularly and work from. Basically, I have several worksheets, named as follows:

    o Short Term
    o Long Term
    o Partners & Affiliates
    o News and Promo
    o Maybe's
    o Completed

    I have columns set up as follows:

    Priority | Hours | Short Desc | Notes/Details | URL

    By adding to, executing from and updating for this spreadsheet I'm able to stay on top of things pretty well. If this sounds useful to you I can provide even more details.

    Good luck!
    lloyd
  • Posted by mgoodman on 9/8/2007 at 2:19 PM Author
    Lloyd: Thank you. I have your contact information, and I'll let you know privately if more details will be helpful. Just out of curiosity, though, I'm wondering WHY you don't have a written marketing plan. Is it that you don't think it would be useful to you, or that it's too much trouble, or that you have the objectives and strategies in your head, or some other reason?

    This isn't a judgment thing. I'm just trying to understand what goes through the minds of entrepreneurs like yourself when it comes to planning.

    Randall: Your post was very helpful. I had thought of the "no time to do it" reason for not creating a marketing plan, but the "no patience/rush to market" idea is a different one. Thanks a bunch. I can understand that if an entrepreneur believes the window of opportunity is closing, the idea of planning is discarded quickly. "By the time I finish planning, the opportunity will be gone."

  • Posted by georgi.stoilov on 9/8/2007 at 5:31 PM Accepted
    Small Businesses do not have a Marketing plan for a simple reason.

    1. They think this is a costly prerogative of the BIG businesses.

    2. The fonder is normally an owner, GM, marekting director, financial decision maker and sales - in the beginning.

    3. Normally when a small business starts it starts with the idea that "something should be done" but they are not aware what "should be done"

    Regards

    Georgi

  • Posted by lloydmerriam on 9/8/2007 at 8:29 PM Member
    Michael,

    You asked why I don't have a formal/written marketing plan. Frankly, I not only don't see the need, I think it might be stifling as well. Or at least an impediment to an open mind ready to change course (or at least to make corrections or additions) freely, frequently and without the self-imposed restrictions of a written plan.

    Yes, I realize that the idea is to update the plan as and when needed ... but, realistically, how often do companies that create (detailed) written marketing plans do more than frame, hang, and execute them? Which isn't necessarily a bad thing; I just don't like how that feels, so I work from my notes [ideas] and spreadsheet [action items]. Maybe what I work from IS a written marketing plan. It's the "formal" part -- or "rigor," if you prefer that term -- that's missing.

    Large companies are typically slow to move and even slower to change. One reason, I believe, is because they work so hard to create dogma (such as written marketing plans). Of course, the more bodies and minds that are involved, the harder it is to NOT create written instruments (like marketing plans) to work from. In short, large companies create these because they must. But that doesn't mean it's a good idea for smaller ones.

    After all, it's rare if ever that any of us get it "right" from the beginning. And if you're not open to rapid and sometimes extreme change -- as the business landscape evolves -- you may fail in the case of a misstep. Large companies have a lot more leeway in that regard.

    Anyway, that's the gist of why I don't have a formal marketing plan. Another reason is that I'm honestly very lazy about such matters. I'm just too busy "doing" things than there's time to write about them (even if I wanted to ;-).

    lloyd
  • Posted by mgoodman on 9/8/2007 at 9:14 PM Author
    Thanks again, Lloyd. That's the kind of stuff I'm looking for. I appreciate your candor and your thoughtful introspection.
  • Posted by mgoodman on 9/9/2007 at 9:46 AM Author
    Juliet: Your response is exactly the kind of thing I'm looking for, and it is extremely helpful.

    I think that in some industries and businesses the difference between the business plan and the marketing plan is minimal, while in others it could be considerably greater. It probably depends on whether there is a large product/service component that requires its own set of strategies (e.g., make or buy, import or source domestically, go for quality or price, etc.), or whether the business is predominantly based on marketing.

    I suspect there is also an element of whether the "business" is really just a job for the principal or whether it is a stand-alone business that can operate with or without the founder's personal involvement. In the examples you cited (tradespeople), the business is really just a job -- as it is with most consultants and smaller advertising agencies, design studios, etc. When the business is really a job (regardless of how lucrative it is), the need for a formal marketing plan is probably less critical.

    Perhaps there is also a distinction based on the hard assets required to run the business: When there are substantial hard assets the business is likely to be somewhat independent of the founder. When the hard assets are minimal, the importance of the founder's personal involvement is likely to be greater. And when the business is more than a job, it's probably more important to have a formal marketing/business plan.

    I'll have to think about that ... (Any comments/reactions or ideas?)

    Thanks again for your contribution to the discussion, Juliet. I too find it fascinating.
  • Posted by mgoodman on 9/9/2007 at 9:57 AM Author
    Thanks for that further example, billn. I appreciate your response and your involvement in this discussion.

    In a way, it's an version of that old saw, "Even a blind man can trip over a brick of gold." Except that I think your point is that it happens with a frequency that suggests it's not just a totally random or rare occurrence. Emergent strategies may, in fact, outnumber deliberate strategies.

    If that's the case, then I would expect the possibility of emergent strategies to be reflected in a SWOT analysis. (They'd be part of the O, then part of the S.) Once they are identified, they are not "emergent" in the next update of the plan. They become deliberate, even though they were emergent (i.e., unanticipated) the first time.

    The company in your example, I'm sure, has now recognized how customers are using their IP and incorporated the value into its own planning.
  • Posted by lloydmerriam on 9/9/2007 at 11:14 AM Member
    I don't think it's a question of "hard assets required to run the business," so much its the number of participants required to invoke the initiative [unless you're already considering personnel in your definition].

    The larger the organization and, generally speaking, as the number of "bodies" working together to achieve a particular goal increases, the more a written "whatever" is required to ensure everyone gets (and remains) on the same page.

    Without an external yardstick (such as a written marketing plan) to measure by, the risk of the effort becoming unfocused and uncoordinated increases perhaps exponentially with the number of participants.

    Small companies, or small divisions within large companies, don't have nearly the risk of missing the target as do large ones simply because there are fewer variables to contend with. So, from a practical standpoint, a company with a large marketing/sales department needs a written plan to increase the likelihood that its execution will be successful.

    lloyd

  • Posted by mgoodman on 9/9/2007 at 11:15 AM Author
    Thanks, Tim ("Wiglaf"). Some excellent points.

    Maybe "Specialized Doer-Sellers" need a different kind of instrument -- not a business plan or a marketing plan, but some clear sense of the goal ... so they know when they're succeeding and when they're not.

    You've arrived there by saying that you at least have a revenue goal. And you've adapted your behavior based on a kind of trial-and-error experiment so that you self-correct as you go.
  • Posted by mgoodman on 9/9/2007 at 12:53 PM Author
    Aha!

    Maybe the distinction between those who need a marketing/business plan and those who don't is whether you have/need financing of some kind.

    Even if you're going for private financing (e.g., family, angels, etc.), you probably owe your backers the confidence that you're going to (a) use the money for specific purposes, determined in advance, and (b) that there's a reasonable chance they will see an attractive return on their investment, commensurate with the risk.

    When you have nothing invested but your own time and energy, then you can "fly by the seat of your pants," or evolve your marketing plan by trial-and-error, and if it doesn't work you've only lost your time (i.e., opportunity cost only).

    Question: If that's the case, do you need a marketing/business plan when you're investing your own money (in addition to your time)?
  • Posted on 9/9/2007 at 10:55 PM Accepted
    As an independent marketing contractor and photographer I've found that I do best by developing a general plan for the year (a bulleted list that is for my benefit only). That said, I find that unplanned opportunities often change my plans. As an example, I had planned a WOM campaign to my previous photography customers this fall and had even written the email. Then I got a lucrative 3 month marketing gig that means I won't have time to deal with the extra photography business so that goes on the back-burner until next year. I think ultimately you need to find a system that works for you and helps you stay on track.
  • Posted by mgoodman on 9/14/2007 at 5:27 AM Author
    An excellent discussion that has given me precisely the kind of input I wanted. Thank you all.
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