The core function of a business is the exchange between it and its customers. The exchange is a value-creating process. Without it, you are not a business; without more of it, you won’t stay in business; and to make it happen, you must rethink your marketing strategy often.
Every business has interest in increasing the number of satisfactory and profitable exchanges with current and potential customers. The challenge is determining where your best growth opportunities exist and then how to approach each opportunity in the most efficient and effective manner. While it may seem an overwhelming task, it is not; and it is also not a task that you should consider outsourcing to others. No one knows your business like you do.
What you need to do is have a conversation with someone who understands the role of marketing in a competitive, dynamic environment. You need someone who can help you identify the best comprehensive marketing tools to match your resources, your goals, the value proposition of your offering and your position in your market.
Topical categories are listed below to help you consider the available marketing tools.
1. Understand your market. If you do not currently have a customer database, you should develop one. A database will help you establish a foundation from which you can segment, target and position your offering more effectively. You need to keep track of who your customers are, how often they come and how much they spend. Include their responses to a few well-chosen questions, and you will have the information needed to target promotions and develop loyalty programs that work.
A marketing tool referred to as the 80/20 analysis will help. List three years of customers by total dollars spent, and you will find approximately 80 percent of your revenue comes from 20 percent of your customers. These 20 percent are loyal, and you need to find out why and protect them.
The next 30 percent are “switchers,” as they likely switch their purchases between you and competitors. Understanding why will tell you a lot about yourself and your competitors. The free library database is available to help you find potential customers that look like your best customers.
2. All growth opportunites are not equal. Your most likely growth opportunity is to do more of what you are currently doing, more effectively than any competitor. Penetrate your current market with current offerings.
Your second best option is to look for ways to extend your product offering, aka product development in your current market. Add an economy or unbundled option to draw in the switchers. Ask your current customers what it is that they would change if they could and talk to the customers you no longer have to find out why they are leaving.
3. All marketing involves segmentation, targeting and positioning. Apply the 80/20 marketing tool using seasonal sales, product lines and life stages as a basis to determine if segments are unique enough to divide and reach profitability with distinctive offerings and promotions.
4. Integrated marketing communications. This is going where the ducks are flying and learning how to speak duck. You have to get noticed before anyone will know you exist. It is easy if they are looking for you; but if not, then you need to go where they are. For example, young soon-to-be parents can be found in a doctor’s waiting room. If you integrate peripheral cues – picture of a baby in a new mother’s arms – framed with emotion or humor, you will have their attention. Then all you need to do is deliver your message that has contextual relevance.
“Laddering” is a marketing tool that reflects the behavioral steps and mental processing a consumer goes through when making the purchase decision. Once you understand their decision process, you can influence their choices.
5. Marketing is more than a simple business function. It is the responsibility of every employee to provide quality, customer-satisfying service. Help the employees understand the impact they have on customer satisfaction, empower them to improve the customer acquisition and delivery process and link your reward system to their success.
6. Markets and products change over time and so must your market strategy. There is a reason elements of the marketing mix – product, price, place, promotion – are called variables: They change over time in response to changes in customer needs and the competitive environment. Continued innovation and strategy review is necessary.
7. Customers have the final say, and growth requires customer-oriented thinking. A satisfied customer talks favorably about your business, offers innovative ideas for improvement, stays loyal longer, buys more and is less sensitive to price differences.
When customers fire a business and leave, research tells us 15 percent of the time is because of inferior products; 15 percent of the time it is because the cost is too high for the value received; 20 percent of the customers leave because of a lack of personal interaction; and 50 percent leave because they believe they received poor service.
When is the last time you listened to the voice of your customer?
Dennis Wubbena is a professor of marketing at Evangel University. He can be reached at wubbenad@evangel.edu.[[In-content Ad]]
