Scientists begin their process by observing their environment. Good marketers do the same thing, studying industry trends and market conditions to identify new opportunities. A S.W.O.T Matrix is often used to organize and analyze the information they observe.

The S.W.O.T Matrix

This tool outlines the factors (both internal and external to your business) affecting your success. A S.W.O.T analysis is the starting point for the development of action plans: capitalizing on your strengths, compensating for your areas of weakness, taking advantage of marketing opportunities, and addressing market threats.

The S.W.O.T. Matrix begins with a listing of your strengths. For most small business owners, this is both the strengths of your business and the personal skills you bring to the company. For example, a small Software Consulting firm might create a list like this:

Strengths:

• Existing relationships with key decision makers
• Strong technical skills
• Microsoft® certifications
• Established referral relationships with hardware vendors.
• Experience in several key industries

The second element in the S.W.O.T Matrix is an analysis of your weaknesses. This is always harder to do, but it is extremely valuable to critically assess areas for improvement. For the same consulting firm, the weakness list might look like this:

Weakness:

• Small client base and low brand awareness
• Limited marketing funds
• Not enough contacts outside a few core industries
• No administrative support

The internal factors, your strengths and weaknesses, are things you can directly control. Direct action on your part can improve a weakness; possibly even converting it to a strength. The internal factors make up only a part of the S.W.O.T Matrix.

The next two sections are comprised of external factors, opportunities and threats in the market place. These factors cannot be controlled directly. They do, however, have the potential to affect your business in a positive or negative manner.

Opportunities are market conditions and events which create a need for the products or services you provide. The  software consulting firm in our example might describe include the following factors in their description of their environment:

Opportunities:

• Growth of mid-size companies in local market
• New technologies offering customers dramatically improved access to information
• Major competitor signs exclusive agreement with one company, effectively taking them out of the market place for other projects

Like opportunities, threats are outside of your direct control. These external factors must be identified, and dealt with. A consultant might face the following external challenges:

Threats:

• Sluggish economy makes key clients cautious about investing in new development projects
• Tight job market creates larger than normal pool of qualified consultants
• New management at key client

One final note on opportunities and threats; often one situation can be both. For example, a downturn in the economy may reduce the number of new projects but increase the requests for cost-reduction work. In this case, it is appropriate to list the situation as both and determine action plans to address both the opportunity and the threat.

The SWOT Matix is a helpful starting point to begin your marketing plan.   Looking for more help?   Sign up for one of our free on line courses or give us a call!

I have seen many definitions of marketing, but my favorite is this one: “Marketing is a social process by which individuals and groups obtain what they need and want.”

What appeals to me about this definition is what is missing. There is no mention of selling, advertising, promoting, or any activity on the part of the product or service provider.

This definition is about the customer, their wants and their needs. It captures the very essence of what marketing is really about, the customer!

The Marketing Process connects your product/service to a potential customer’s needs and wants.  It is a step-by-step procedure anyone can use.   In many ways, marketing is like a science experiment.

How does it work? Think back for a moment to your fourth grade class, where you learned the scientific process. Your teacher carefully explained the elements of the process:

• Observe the environment – Look for patterns and trends.
• State the hypothesis – Based on your observations, make preliminary conclusions about your environment.
• Determine elements to test – Describe elements you wish to learn more about. Identify parts of your hypothesis to test.
• Design the experiment – Select the specific techniques you will use to test your assumptions.
• Conduct the experiment – Follow the plan you have laid out, carefully collecting and analyzing the data.
• Prove or disprove the original hypothesis and begin again.

The elements of the marketing process are very similar:

• Observe the environment – Study competitors, industry trends and consumer preferences.   It might be helpful to create a S.W.O.T. Matrix (Strengths, Weaknesses, Opportunities, and Threat analysis) to organize your information
• Define your target customer – Based on your research make preliminary conclusions about who you believe the best candidates for your products. What benefits do they seek?
• Define your goals – Describe your goals clearly and completely.
• Create a marketing calendar and a budget – This calendar identifies when and how you will spend your funds.
• Measure the results – When following the plan you have created, measure the effectiveness of all expenditures.
• Use the information – and begin again.

Just as good researchers conduct experiments over and over again to verify their conclusions, good marketers must do the same.

Need help with this process? Consider a copy of my book – The Science of Marketing to help you get started.

I recently taught a workshop with Howard Cox of Sommerset CPA’s.  The central theme of the class was building an ROI based marketing budget.   To do that, you must begin with a look at the numbers behind your business.  Why?  Because when it comes to marketing, it is all about the numbers.

• How much does your average customer spend?
• How many years does a client stay with you?
• How larger is your referral base?
• How good is your closing ratio?

Use this worksheet to help you analyze the “numbers” which should drive your marketing decisions!  Click here to download the Lifetime Value of a Customer Worksheet to begin analyzing your marketing budget foundation today!

If you need help completing the form, give us a call.  We would love to talk to you about your marketing budget!

About a year ago, I wrote a post about a Marketing Organization Chart which looked at the four key elements of your marketing plan: Strategy, Lead Generation, Conversion and Customer Service.   While all the pieces are important, I would like to take a closer look at the impact of customer service on your overall marketing budget.

Many firms make the mistake of spending the bulk of their marketing funds on new customer acquisition, and very little on retention.  In most cases, this is a huge mistake.  Why?  If you have existing customers, people who know and like you these are the people most likely to buy your new products and refer you to others who might use your services as well.

To understand the value of a customer, think about what that customer will spend, not just this year, but over the next few year. Consider also, what the impact would be on your business if that client introduced you to at least one other person who became a client.

How much is  a customer really worth?  And how much should you be spending on retention vs acquisition activities?  Working with Howard Cox, an accountant at Sommerset CPA’s, I  have created a model which will help you  analyze your own business.

We will be demonstrating how this model works in a FREE seminar on January 26th.  Seating is limited, so be sure to reserve your seat by  filling out the form below. When you do, you will also be given an opportunity to download our LifeTime Value of a Customer worksheet.

To learn more, check out the short Podcast interview with Howard Cox. Click here to listen to the interview.

When I was Vice President of Creative Services at Conseco, we were always out of literature for key products.  ( In the insurance business literature is all you have to sell, so these outages would cripple our sales team.)

Our back-order list was close to 300 different items and climbing.  There had been numerous meetings on the subject, but very little action.   So I stopped talking about procedures and policy and asked a simple question.

If our goal was a back order level of 100 what would we do?

The defined target gave a focus to our discussions.  It was no longer a vague “get better”  but a very specific goal, and every day we knew exactly how far we were from our target.

Set a Time Line

To add an incentive, I offered to take the print team to any restaurant in town if we reduced our back orders to 100  by September. 1.  I agreed to take them to Applebees if we made it by October 1.  Our destination would be McDonalds if it took until November 1 to reach our goal. The date gave us the sense of urgency we needed to keep this in the forefront of our discussions.

Weekly Debriefs

We kicked off every production meeting with a brief conversation about the back-order list and the ideas started flowing.  We began to tag projects which were associated with back order items with red flags.  Everyone, even teams supporting the print staff (editors, designers, writers), all knew if something with a red tag landed on their desk it was their first priority.

Progress Tracked

Slowly the numbers started to improve;  275,  245, 225 . Every morning when the back order report arrived I would post the results on the wall.  We could see real time results of our actions.  We identified the actions which made the most impact and made sure to focus on those items.

Involve Others

And the numbers continued to fall; 199, 175, 150 . We began to talk to the other department representatives who often had to approve the reprints about our red tag priorities and suddenly they gave these items top priority as well. We hand carried rush jobs across the 11 building campus instead of waiting for interoffice mail ( good thing it was summer).

Our printer knew these jobs were always first in line.  Even if we paid a rush charge every now and then it was worth it to fill the back orders.  Then our arch enemies, the inventory department, the people who believed we were solely to blame for the inventory mess called to find out what we were doing.  They wanted to know what they could do to help.  We asked them to run reports of items close to zero, so we could start the reprint process before we hit crisis level.  And the numbers got lower; 140, 125, 109.

On September 1, we went to Lunch at Cafe Nora.  When my boss saw the bill for the lunch she didn’t bat an eye, because no one ever believed we would be able to achieve this goal.  No one but me! And the cool thing was that the back orders continued to fall. We still made little tweaks, but with a good system in place, we got ahead of the curve, and managing back orders became easier.

In February of the next year, the back order list was blank. For the first time since that report had been run, our back orders were zero.

There are several important lessons for small business owners in this story:

1) Define your goals, with a specific time line

2) If you are serious create and follow an action plan

3) Track your progress

4) Involve others, do not assume you can do it on your own.  We would never have succeeded with out the support of the printer, inventory team, and other managers.

Now is a great time to define new goals, but don’t stop there!  Build a plan, track your progress, and involve others if you want to succeed!

Good marketing begins with a budget based on the numbers which drive your business.  As 2010 kicks off, this is the ideal time to build a marketing budget for your business.   To help our clients and friends start this process, Howard Cox of Somerset CPA and I will team up once again to teach Marketing by the Number

In this workshop we will show you how to build an ROI based budget.   Howard will show you how to calculate the Lifetime Value of a Customer and how to use this a a starting point for your marketing budget.  Then I will explain the  relationship between leads and closing rates, referral percent and advertising targets to determine where you should be spending your money!

There is no fee to attend the program, but RSVP’s are required.   The class will be held at the offices of Somerset CPA, 3925 River Crossing Parkway, Indianapolis, IN 46240 on January 26, 2010 from  8:30 – 10:00. Note the time change: 8:00 – 9:30!

To reserve your seat,  fill out the form below.

About a year ago, Ingrid Cummings invited me to be a guest on her radio program Rubicon Salon.  In the course of the hour, we talked about marketing, social media and staying ahead of your competition in an economic downturn.

While the entire program is too long for More Than a Few Words, I thought it would be fun to share a few excerpts over the next few weeks.

In this first segment, we talk some of the strategies small business owners can employ when the economy slows down.

From the interview:  “When everyone is pulling back it is a wonderful time to invest. It is easier to look bigger then you are”

And now, as the economy is starting to pick up, those same strategies will work.  Don’t wait for a full blown recovery, it will be too late.  Start investing now!

Click here to listen to the interview

Whenever I want to use my GPS or Google map to find a location, I have to figure our where I am first.   The same is true in business, before you can develop a comprehensive marketing plan to take your business forward; you have to have a starting point.

When we work with clients to develop their marketing plan, we often use a two part assessment to help them evaluate where they are and where they want to be.  This gives them a starting point for the general direction, and emphasis of their marketing plan.

Part One: Where are You?

• What do your clients think of you and why.
• Who are your most profitable clients?
• What are the purchase factors which motivate clients and drive their decision
• What are your barriers to selling?
• What are the characteristics of your typical client
• What are the characteristics of prospect who rarely become clients?
• What do your clients think about you?

Part Two: Where Do You Want to Be?

• Who is you ideal customer?
• What are their problems which you solve?
• What are the benefits of buying from your company?
• Define solutions to eliminate buying frustrations.
• Identify buying objections and define solutions to overcome them.

If you are ready to start working on your 2010 marketing plan download our free marketing assessment to frame your thinking!

There is a common misconception that marketing people can’t add.  People assume we view numbers as graphic elements, simply using the prettiest one.  But that is not true, good marketers know it is all about the numbers.

That is why I am so excited to be team teaching Marketing by the Numbers with Howard Cox of Somerset CPA.  We will look at building an ROI based approach to marketing.  We will focus on using the relationship between leads and closing rates, referral percent and advertising targets to determine how much you can afford to spend on marketing, as well as where you should be spending your money!

The class will be held at the offices of Somerset CPA, 3925 River Crossing Parkway, Indianapolis, IN 46240 on Tuesday, November 10th from  8:30 – 10:00.  The fee is only $35 for members and non members of Rainmakers. Seating is limited to reservation are required.

]]> http://www.roundpeg.biz/2009/11/marketing-by-the-numbers/feed/ 0 http://www.roundpeg.biz/2009/10/business-plan-8/ http://www.roundpeg.biz/2009/10/business-plan-8/#comments Fri, 30 Oct 2009 10:52:03 +0000 Lorraine http://www.roundpeg.biz/?p=3412

This is the ninth of  our 10 part series on business planning  If you want see all the posts sign up for the Free Weekly Business Planning Series and recieve a blank business outline too!

Embarking on a long trip, it is wise to pack an extra bag, taking along things you might need along the way. In your plan the appendix is your extra bag. It contains anything else you would like to share with your readers.

The appendix is where you put all the other “stuff” which is important, but doesn’t seem to fit anywhere else. For example:

• Expanded product descriptions, technical specifications, and patents
• Comprehensive financial statements
• Certifications, licenses and contracts
• Newspaper clippings, testimonials, and letters

Your Assignment:

Share with other readers what you will be including in your appendix section.

Ready for another conversation about business planning.  We are still holiding 30 minute weekly discussions every Wednesday at 1:00 Eastern time.   Your fee to participate is still $5.00