By Beth Borrego / Published December 2020
Now that we have delved into marketing and gotten a feel for it, it’s time to discuss the framework of a very important document that’s crucial to the success of any small service business—the marketing plan. Marketing is not a single action, but many components used in a synchronized effort to identify, attract, and maintain profitable business relationships with customers. These steps include everything from demographic research to advertising, image building, bundling and pricing, and sales and customer service.
A well-written marketing plan will illustrate how your company plans to position itself in the market so that consumers can clearly see that they have a need to purchase your services. If your services or products are positioned properly, potential customers should identify the unique benefits being offered, and as you begin to develop brand recognition, your sales and market share will increase. Each of the bolded sections in this chapter represents a portion of the marketing plan you are preparing to write. At the end of this chapter is a sample of a marketing plan outline to use as a framework to create one of your own. (This outline will appear in the January 2021 issue, as chapter eight is divided in two parts). Keep in mind that a marketing plan should be viewed as a living document, and as such it needs to be reviewed and updated, measuring the results of campaigns against the plan’s objectives.
This is the backbone of your marketing plan. Begin by writing a short paragraph clearly defining what advantage your service or product brings to the market and how it makes your customer’s life easier. In order to effectively market your company, you’ll need to identify the problem or “pain” that your service or product solves. Your company should be a good fit for solving the customer’s specific problem, or there is no reason to do business. Next, define your company goals and elaborate on why you are in business. Owners should periodically review both business goals and objectives as well as identify and evaluate strategies for meeting them. Review is important because over time these strategies may change.
Positioning your service or product properly means defining each market segment and then positioning what you are offering to each segment. Don’t try to market a service the same way to all segments. It’s important to recognize that some segments may be different, requiring a modified approach to attract consumers. How your company is perceived by consumers within these segments is the result of your company image combined with the marketing mix created for that specific segment. If a service that you offer fits a specific need in a unique way, the consumer will be more likely to contact you to discuss their particular situation. It’s time to use the service bundles we created in chapter four (published in the June 2020 issue of Cleaner Times) to help define the market positioning for each of your service segments.
Discuss your services and products, specifically identifying them by bundle or brand name, and be sure to include specific characteristic or other traits. If your company uses a specific process to perform a service, describe the difference between your service and that of other companies to demonstrate how it is exclusive in the market. Describe any additional services used to create the bundles, if applicable. No company is perfect, so be honest with yourself and include any weaknesses in your services or products. If you plan to introduce new services or products, describe them and outline the implementation plan to introduce them to the market. List the cost of each service or product you offer in a measurable way. You will also need to estimate the percentage of annual sales as well as the estimated dollar amount that each service or product should generate in revenue for your company. Lastly, you’ll need to provide the price you plan to charge customers for these services or products.
Next, take all of the demographic and lifestyle information collected during the exercise in chapter one (published in the January 2020 issue of Cleaner Times) for each of the market segments that you identified as targets, and classify it by geographic area or region for each market segment. Remember, you don’t have to gather all of this data yourself. There are companies that gather this kind of information for demographic use, and census data is also a helpful tool. Some of the statistics you’ll need may include the following:
Be sure to list all of the identifiable factors used by the customer during the selection of your service or product, such as price, availability, special offers, and so on. It’s important to note the size of each of the market segments. For example, you may find that zip code 90210 has 80,000 households that on average have $120,000 income, two children, two incomes, sports participation, movie attendance, and restaurant dining twice monthly. Identify the trends within each market segment that may make that segment viable or higher risk. In other words, honestly look at what may impact sales for your business. For example, it would be important to know if the majority of your customers work at a factory in a small town that employs a large percentage of the population living there. If the employees are struggling, or the factory suffers layoffs for example, it will have a direct impact on your customers. On the other hand, if your business serves a larger city or a more suburban area, the factors affecting your market segment will be different. List these factors and define them. Make a note if they are temporary or permanent. Some examples may include the following:
Describe any promotional efforts that will take place for each market and specific segment, and be sure the campaigns are targeted properly so consumers will identify easily with the need for the service or product. You’ll also want to include the methods your company will use to track response rates in order to determine the cost effectiveness of your campaigns.
Next, identify both direct and indirect competitors by services, products, and markets. This will require some research on your part, and it might be helpful to create a grid when collecting this data initially, much like the one you created when you defined your service bundles in chapter four. It should be as long and detailed as it needs to be when you are filling it in. In order to do this, you’ll need to collect the following information:
Next take the information you have gathered and use it to create a competition comparison grid. Table 1 is a two line example.
Compare your marketing techniques and other relative factors with those of your competitors. Creating the grid will make comparison easier. List any marketing techniques you have seen, used, or have heard about.
Verify all of your fixed and variable expenses related to services and products to ensure accuracy. This should be done routinely to ensure profitability. If a service or product is not profitable, then the price should be increased, while being careful not to price the service or product out of the market. If a service is not profitable and cannot be made to be profitable, it may be time to remove it from your offerings.
Compare your prices for products and services with others in the industry. Higher-than-average prices should be justified via added value; lower-than-average prices should be explained in your marketing strategy. For example, if you are offering a new service, you might plan to offer it for a limited time at a specially discounted price to a targeted group of consumers to launch the service into the market. Be sure to specify when the promotional period will end. If your services are priced in the market at a higher than average price, make sure you justify your reason for doing so. You will also want to track your closing rate on these sales because, again, you don’t want to price yourself out of the market.