Market Planning - Getting It Right!

   Part 4

With marketing—as with military warfare—even the most brilliant strategy will fail unless supported by adequate funding and other numeric foundations.

by Kevin Beauchamp [July 7, 1999]

Marketing Financials
Over the past few weeks we've looked at the major aspects of building a winning marketing plan and how the various aspects of your market planning work together—with research as the foundation, focusing your marketing with positioning and segmenting, and then promotion through strategic innovation. The final installment of this series, Marketing Financials, integrates your market planning into the whole of your business planning, with sales forecasts, and the hard numbers your marketing will generate.

Outlining your various campaigns in the business planning can be included in the appendix section as supplementary information or as a separate campaign plan. Keeping older campaign models around for reference is a good idea and can help stir ideas later on.

A campaign can be as simple as a quick series of informational ads on the radio for a few days or as complex as incorporating a PR and media blitz with print ads, brochures, and live presentations over the course of several months. Build the campaign prior to its launch; budget and if necessary tweak the campaign during its execution. Nothing is really set in stone here other than your ability to track the results of what worked and what didn't.

Funding the Campaign
Quite frankly, all marketshare is purchased. One way or the other, whether you buy customers outright or coax them to your camp with a winning campaign or strategy, you are buying customers. The key, obviously, is to spend as few dollars as possible for each customer and the use the resources of these new customers to build on prior successful campaigns.

Available marketing capital will be the initial basis of building any marketing campaign. Again, falling back to Sun Tzu, you must have money to run a war. Don't expect to gain any serious ground in marketshare without capital. The larger your theater, the longer your supply lines, the more money you will need to implement and maintain your campaigns and to build and keep marketshare. As your marketing resources are expended you need to make sure that you are gaining the most marketshare for the least amount of resources expended. If you find that a campaign is not performing to expectations, it's imperative that you discover the real reasons why (not assumed reasons) and then reorganize the campaign so that you do not make the same mistake(s) again.

While all of this may appear to some to be elementary, you'd be surprised at the number of management and marketing people who will implement a campaign, gain a certain number of new customers for resources expended and then 'assume and accept' that the results were the height of marketing performance. The point is to never be satisfied with your results. You can always do better than before. If a campaign fails to meet expectations, don't unnecessarily abandon it; but find out why it failed and then make adjustments.

Sales Forecasts
For each individual campaign, you will want to draw up pro `forma financial statements that forecast with limited detail how many customers you expect to win with the campaign and ultimately what the final customer acquisition cost will be. Many companies do forecasts based on such things as: sales by period; sales by product or service sold; by customer group; and local and overall marketshare for their territories or industry. Your campaign should be focused in all of these areas if possible. It will give you a clearer understanding of which services your customers are more interested in, where and who they are. It is a necessary focusing tool.

If, for instance, customers flock to your dial-up services but seem to all but ignore your hosting offers, you might want to focus almost completely on dial-up and ignore hosting. Focusing your marketing resources on specific areas of your business strengthens your positioning and builds your company's marketshare in those areas. It is always tempting to think, "Well dial-up is doing well enough, let's put more marketing resources into hosting." Analyze first. No amount of marketing will efficiently sell a bad product. Focus on your strengths and tweak your weaknesses until they become strengths, but don't waste a lot of resources on dog products that don't really perform for your company.

If you don't have at least some actual historic numbers to begin your sales forecasts with, you will need to make industry-supported educated guesses for your forecasts. Keep your guesses conservative; no one wants to see pie-in-the-sky numbers that are unrealistic and therefore useless.

So, how many customers will you hope to acquire in your campaign? You should know this. In a theater of battle your objectives are clearly laid out as to what the goals are and how you expect to attain them. Your marketing should be also. Running a campaign without any kind of clear-cut goal is to market under naïveté without an understanding of the dynamics and demographics of your market. Imagine a general going into battle with the enemy without knowing who or where the enemy is. Does he say, "You know, I don't know anything about this territory I'm about to assault; I sure hope there isn't much resistance here." Of course not and neither should you.

go to page 2: Budgeting by Objective