Companies need to take a strategic view of marketing, which involves not just physical goods but also the myriad services surrounding those goods.
Services play a vital role in our economy. For us marketers in the services industry, it's important to understand the key factors that enable us to profitably acquire and keep customers.
We have identified four factors that make a difference and represent best practices for marketers. Input from hundreds of companies, representing a multitude of diverse industries, identified these four components as the critical success factors:
- Having an approved marketing plan
- Having an approved marketing budget
- Identifying and securing resources
- Defining and establishing metrics that demonstrate Marketing's impact on the business
The companies that consistently address these four factors are more likely to achieve their revenue and profitability business goals.
How do you stack up compared with the survey participants? Some 72% of the respondents had a marketing plan, 70% had an approved budget and 65% had resources identified and secured.
Hopefully, this is the case for your company as well. If not, there's work to be done.
Only 43% of the respondents had metrics in place to measure program effectiveness, and a mere 33% had metrics in place to measure marketing's impact on the business. These are two areas that most every company needs to improve.
Let's take a closer look at the four components, and while reviewing each think about how your company is performing.
1. An Approved Marketing Plan
A marketing plan serves as a road map or blueprint that guides a firm's course of action. A good marketing plan should include at least a clear set of quantifiable objectives and a set of strategies, tactics and milestones that support the objectives.
Two years ago, 75% of companies surveyed didn't have an approved plan. They suffered from long sales cycles, weak pipelines and high customer churn. Today, most companies have come to realize that although without a plan they may be engaged in many activities, they are not necessarily moving forward.
The winners realize not only that an approved plan matters but also that the timing of the plan is important. An approved plan halfway through the year impedes a winner's ability to make sufficient impact on the year as a whole.
One item that distinguishes the winners is the inclusion of a compelling, well-developed positioning platform. It clarifies why people should buy from you and how you are better and different from the competitors. Developing a positioning platform requires you to understand your target, its problems and needs, and then to purposefully position your offer specifically to meet those needs—in short, to be customer- or market-centric.
Many of the research respondents indicated that they often end up revising or redoing their positioning again and again. The lack of a consistent positioning platform ends up confusing the market. Targets are not able to understand why they should select your firm over another. This results in longer sales cycles and a lower conversion rate.
On the other hand, the winners have done their homework and are confident in their positioning and invest in it for the long term.
Having a plan is a good first step, but without adequate resources, people and funding, achieving a plan is as good as wishing on a star.
2. Money Matters
The marketers who are the most successful are those who have an approved budget. They do no have to go back to the well to request funds time and time again. They did their homework when they developed their plan, and the rationale for the plan supported their investment requests.
Having a stable budget that is really committed to and owned by Marketing enables Marketing to operate on a long-term basis rather than just day to day. As a result, looking at the big picture and into the future becomes easier, because the financial resource is available and specifically allocated to marketing efforts.
Today, more and more companies are recognizing the benefits of a specific budget. Two years ago, only 40% of companies had an approved budget and expected to achieve more with less, raising their revenue expectations only to be met by disappointment.
This last survey revealed a significant difference. For the first half of the year, 70% of respondent companies had an approved budget. Being ready for the market takes an investment. Companies have come to realize that the saying "show me the money" has meaning even for marketers. Winners have a budget.
3. Securing Resources
In addition to a budget and plan, what other types of resources are needed? Marketing was hindered over the past two years by lean staffs. In many companies, marketing efforts are led by non-marketers: people with predominantly sales, communication and domain experience. In addition, Marketing headcounts and hiring plans remain unstable year to year.
Over the past two years, the lack of marketing expertise and inability to leverage external experts kept some companies from being able to achieve their goals. Two years ago, 66% of companies did not have resources in place to achieve the company's goals. However, this time around, 65% of the survey respondents believe they have resources in place.
4. Defining Metrics
Marketers are more often being asked to show cause and effect between their marketing efforts and business outcomes. Yet, even today, 75% of the companies surveyed do not measure the impact that marketing has on their business goals.
Why is this? Are companies lost when it comes to metrics—or just unaware of the value in measurement?
Many companies have no idea where to begin with metrics and which ones should be used. In fact, the few respondents who were using metrics, it turns out, were often using them incorrectly. The most common metric used to measure Marketing's effectiveness was "number of new deals," which is historically a metric for Sales.
Without metrics, a marketer is operating blindly. Success depends on being able to establish the right metrics for linking marketing investments to business goals.
The topic of metrics could be an article itself, of course. But to get started, there are three gauges that marketing should drive: market share, lifetime value and brand equity.
These gauges should be identified in the marketing plan and directly linked to the appropriate marketing objectives, strategies and tactics. That is, those objectives, strategies and tactics that are intended to increase your portion of the market should be clearly stated along with the exact portion in each market segment. Strategies and tactics that might move the market share needle include share of voice, share of preference, share of distribution and rate of customer acquisition. Winners have strategies for each of these.
The same holds true for objectives, strategies and tactics that address improving the lifetime value of your customer base. These efforts focus on share of wallet, recency and frequency of purchase, referrals and so on.
Winners also recognize that their job includes increasing the value of their company's brand, and they incorporate objectives, strategies and tactics designed for this purpose. They have a clear understanding of their brand's current value and the impact that value has on being able to secure a price premium for their services and faster market acceptance for their new offers.
Winners, both the marketers and the executives in a company, realize that they have a responsibility to contribute to the strategic success of their companies. They realize that the cornerstones of strategic success include having a road map, budget, resources and clearly defined metric targets.
If you want to join the winners' circle—in other words, grow customer base and the share of wallet from customers—you will need to take the time to invest in developing a plan, securing a budget, establishing the right metrics and securing appropriate resources.
These may seem obvious, but the results of the semi-annual surveys over the past five years tell us that many companies have yet to master these basics. By just considering these components and how they can be applied to your company, you are taking a step toward the winners' circle.
Continue reading "The Four Marketing Practices of Winners" ... Read the full article
MarketingProfs provides thousands of marketing resources, entirely free!
Simply subscribe to our newsletter and get instant access to how-to articles, guides, webinars and more for nada, nothing, zip, zilch, on the house...delivered right to your inbox! MarketingProfs is the largest marketing community in the world, and we are here to help you be a better marketer.
You may like these other MarketingProfs articles related to General Management:
- Nearly Painless Change Management: Katie Robbert of Trust Insights on Marketing Smarts [Podcast]
- The Marketing Service Chain: How to Improve Customer Experience and Strengthen Your Brand
- How to Turn Your Organization Into an Innovation Powerhouse: Carla Johnson on Marketing Smarts [Podcast]
- Five Tips for Choosing the Perfect Martech Stack
- How to Hire a Marketing Agency and Build a Productive Relationship