In last month’s article, we covered five ways to effectively plan for your business’s sales and marketing. We discussed planning annually, planning for research, planning your strategy, and planning your marketing pipeline. This month, we cover four more important areas for planning sales and marketing.
Remember, your marketing generates the oxygen for your business. Planning your marketing is important to make sure you can breathe easy throughout the year.
Plan for Testing and Measuring
How do you get sales revenue? How do you get milk from a cow? You need to buy the cow, feed and water the cow, get a bucket, and milk the cow. You can’t just go into the barn and push a button and get milk. Milk in the pail is an outcome of many inputs. Marketing is the same way. Sales revenue is not an input; it’s an outcome of other actions that result in sales revenue.
There are input actions that you need to take if you are going to get the outcome you want. You need to generate leads, build trust, educate, and convert the leads to paying customers. Below is a chart showing examples of potential inputs and corresponding potential outcomes.
|1,000 postcards||4 calls|
|Place followup calls with 20 prospects that you have given proposals to||2 signed proposals|
|Change photo in advertisement||Leads from your ad drop 40%|
|Invest $75,000 in a print ad campaign||50% increase in website traffic|
|Increase prices 30%||15% increase in units sold|
We need to know what the input is and measure the outcome (results). Many businesses do not have a testing and measuring system in place because it seems too complicated and time consuming to build and maintain.
Figuring out how to get started can be a challenge. Look for ways to start small and simple. For many businesses, a good place to begin is to ask every new lead how they heard about you. You can write down their name and the source that led them to you.
Testing and measuring is a common sense activity you can do to help you learn what is working and what is not.
As the business owner, it is your responsibility to understand how and why customers choose to buy from you. As the world around you changes and your customers’ needs and preferences change, you need to adapt appropriately to keep your revenue stream strong. If you don’t understand why things are working now, it’s difficult to know how to adapt to the changes that are sure to come.
Plan to Calculate Marketing Return on Investment (MROI)
You should use the attached Marketing ROI Worksheet in two ways. First, you should calculate projections on amounts of revenue and profit you may generate from your marketing investments. Second, you should test and measure your results so that you can calculate the actual revenue and profit and compare it to your projections.
Be aware that when you calculate projections, your personal bias is ready to throw you off track. You can “prove” to yourself (or your boss or partner) that a particular investment is either a good idea or a bad idea by tweaking the numbers until they look good or bad. Resist this pull, and be as objective as possible. The market will tell you the truth if you test and measure the results.
When you start making projections, you will be guessing. That’s okay, because that is where we all must start. The more history you record in testing and measuring, the better you will be able to predict the results of a specific marketing activity. Testing and measuring should be integrated into all of your marketing efforts rather than something you do occasionally to see how it’s working.
Testing and measuring is the key to continuous improvement in your marketing. Without this feedback loop, you are left in the dark, needing to guess at what is working and what isn’t. Usually when a company starts testing and measuring real results, they are surprised about what is working and what isn’t.
Testing and measuring is simple, but it’s not easy. New processes and habits need to be developed. It may seem like unnecessary work and bother. However, if you follow through properly, the long-term benefits will convince you it is well worth it. You will continually find ways to increase the ROI of your marketing investments.
Here’s a simple way to get started.
- Ask every new lead how they discovered you. You can do this whether they walk into your store, call your phone, send an email, or connect on social media.
- Write their name on a list and record how they heard about you. You can use the sample lead sheet attached or create a similar one that suits your needs.
- Schedule a time on a regular interval (day, week, month) to calculate how many leads came from each source.
For best results, take this one step further.
- Check your sales records to see which of these leads made a purchase.
- Tally up the number of new customers from each lead source.
- Calculate the dollar amount of purchases that each lead source generated.
- Assuming you make the same amount of gross profit on all your sales, you will quickly see which sources bring you the most revenue.
After you have mastered the two steps above, you may want to track other sales activity for each lead source such as:
- How many quotes were requested
- How many samples were sent
- The average dollar sale
- Customer complaints
The more you test and measure, the more you will be able to improve the results from each aspect of your marketing activity.
Plan by Using the Triple Constraints Project Management Model
The Triple Constraints is a project management approach well-suited for managing marketing projects. The three constraints are as follows:
- Time: deadline, month/day/year
- Cost: resources you will commit
- Performance: scope and features
None of us have an unlimited amount of time or money to put into a marketing project in order to affect a fantastic result. Determine each of the triple constraints when you plan your project. For example, you might answer the following questions:
- When should we set the deadline to have our new website launched?
- How much should we invest in our new website?
- What features do we want to build into our website?
Then you should prioritize and adjust them because the three constraints are in tension with each other. If you have a looming deadline, you won’t have time to create all the features you might want. Rank the triple constraints in order of priority.
As you go through the project, track progress on each of the triple constraints. Is the project on schedule? Are costs tracking with budget? Are the results realistically achievable? Whenever one of the triple constraints is at risk, you need to re-evaluate. What will you do to get the project back on track? Are the priorities you set in the beginning still the priorities or should you reprioritize?
Communicate the triple constraints consistently to everyone involved in the project. This will greatly improve the project outcome.
Plan for Marketing Education
Young people always celebrate when they graduate from school, but, in reality, our success in business is partially dependent on whether we can continue learning. Marketing is just one of the areas where we can learn, grow, and improve. How can we learn more about marketing and improve our skills? First, identify what you need to know and discover a way to learn it.
A word of caution is in order. Many of the marketing education resources available today are fraught with the American Dream concept and other ungodly ideas. Be sure to follow the principles of God’s Word in your sales and marketing practices. Filter your marketing through these Bible principles:
Here are some suggestions of ways you can learn more about marketing:
- Read books. This is a low-cost way to gain a lot of valuable information.
- Utilize online resources such as blogs, webinars, and video training.
- Network and learn from other people. Go to industry events and share stories with others in your industry. Be willing to offer help to others and feel free to ask others for help.
- Find a mentor. Consider finding an experienced, successful person in your industry to be your mentor. Meet regularly to discuss your challenges. Learn from their stories of success and failure.
- Learn how your customers think and what they value. For example, one common thinking gap between salespeople and their prospects is the value of time versus dollars. Would you work for an hour to save $15.00? Would you work for an hour to save $500.00? Your customers might value time differently than you do. They may be willing to spend more (or less) to save an hour than you would. Learn to look at things from their perspective.
- Develop a selling perspective. How genuine is your belief in the benefits your prospects will experience if they buy from you? Constantly evaluate how your products and services can solve problems for your customers. Turn objections into questions and then answer the questions. For example, someone shopping for furniture might say, “I don’t think this product will last very long for us.” You can turn that into a question by responding, “If I understand you correctly, you are asking, ‘What is the duration of this product in our application? Is that correct?’” Get their affirmative answer and then explain the durability of your product.
A good sales and marketing plan takes effort. Creating the plan doesn’t happen automatically and neither does implementing it. But, when done well it pays steady dividends by correctly positioning you in your marketplace, enhancing exposure of your business, attracting new prospects, converting prospects into customers and nurturing those customers.
Be prepared to work your plan. Take the action necessary every day to follow through. You may find that you need to change your plan mid-year. That is fine. Do it intentionally, not reactively. What you learn this year will make it easier to create next year’s plan. If you test and measure this year, you will be able to make much better decisions then than you can now.
Planning your marketing is important. It ranks reasonably close to oxygen.