No Marketing Strategy? Bad Idea
One of the deadliest mistakes you can make as a small business is to start marketing without a proper marketing strategy. It’s the same as shooting darts all over and hoping one of them lands on target (and not on the wall). With proper focus and direction at the very start, you can land a bullseye for your marketing.
A marketing strategy allows you to know the bigger picture of your business, the direction it’s heading, and aligns the business with short and long term goals. In order to start off with a proper marketing strategy, these are the four steps to follow:
1) What Major Pain Are You Trying to Solve?
The best and most successful businesses will solve a major pain point for their customers. A good way to know the major pain points a customer may have is to ask yourself this question, “What keeps my customers up at 3 am, so they can’t sleep?” The other way to think about it is this, “What worries them 3 or 4 times a day?” Those are the types of problems that your business wants to solve.
The other two forms of “problems” your business can solve are to provide entertainment, or to provide something that’s beautiful. We all love to be entertained, and we all have different definitions of what entertainment is. For some, it’s reading romance e-books, and for others it’s watching a high octane action packed movies with kung fu. Creating something beautiful is what great artists do. Nobody in the world needs a painting of a Picasso, but because it’s become an international sign of art and beauty that collectors are willing to pay so much for it.
2) Do Market Research
Now that you feel that you have the best business idea, and you know what type of pain you’re trying to solve, the next step is to conduct market research.
This is the most important step in building a successful marketing strategy for your small business. Does the problem really exists on a large scale? If you’re not too sure, ask the people that you believe are your potential target market. You can conduct online surveys, hold informal focus group sessions, or have discussions about the problem at networking groups.
What other evidence do you have to support that this is the right target market? Are there studies or reports that support your business direction?
How much are customers spending on this product or service at the moment? Many new business owners overestimate or underestimate what customers are willing to pay. Both can be detrimental.
Research competitors and similar businesses that are also trying to solve the same pain point and see what made some of them successful while others failed miserably. What would make your business unique and different compared to these competitors?
3) Is this a Profitable Business?
Now that you’ve done the research, it’s always best to ask if this is going to be a profitable and sustainable business. Find out what the fixed costs are to run this business, and what’s necessary and what’s not.
If you want to make a living from your business, how many clients would you need? How much would they need to spend? Are there months where you’re expecting business to be slower.
The reason why these questions are vital to marketing is because if your business spends too much on fixed costs, then there’s no money left for marketing to grow the business.
It’s absolutely vital to understand how much you’re going to spend with marketing. For example, individuals who launch food retail products may not be aware that grocery chains charge a listing fee to put products on their shelves. These listing fees can range from a few hundred dollars to about $25,000. And if your product doesn’t sell well within 6 months, they’ll stop selling it, and then you could be $25,000 in the red.
4) Test the Market on a Small Scale
Before deciding on going full steam ahead, the smart thing to do is to create a minimum viable product or service that solves the pain point for testing. A minimum viable product is the very bare bones product that still solves the problem without all the bells and whistles. If you want to be in the restaurant business, before you decide to go full in, it might be best to serve your food at a single catered event and get detailed feedback. What did people like about the food? What did they not like about it?
If you wan to know if your service truly does solve pain points, then you may want to offer your service for free for the first 2 or 3 clients and see what results come in from it. If the clients are really happy, and the business delivered great results, then you know you have a potential winner in your hand.
Spokal, a Vancouver Startup that focuses on inbound marketing for small business did just that. They tested their product with several companies, and they continue to tweak their product to better serve their customers. They took the smart route and tested their product first before scaling bigger.
But don’t go all in, and make everything look pretty, without testing the market with your actual service or product. It’s much better to lose a $10,000 and realize that it’s not the right business for you, than it is to watch your business bleed $5,000 a month.
The foundation of a great marketing strategy comes from preparation, research and understanding. Without any of this, you’re just shooting darts on the wall.
Photo: Mark Hilary