Many of the companies that we give advise to, ask if it is worth making a marketing plan. This plan has to be necessarily linked to generating sales within the organization. Otherwise, it is all just good intentions.
What does a good marketing plan include? This is a key question when evaluating if your company can really develop one and carry it out effectively.
- Clear objectives
- Evaluation of alternatives
- Development of a measuring plan
- Know what to expect
A marketing plan must be a tool to help your sales objectives turn into a real action plan, one that will have a direct impact on the achievement of your goals. A strategy and measurable actions must be designed, they should be easy to apply as well. This is where most companies fail: in connecting these objectives to sales and to a measurable action that can be applied. Which is why we advise our clients so they can be clear about how it's all done.
Objectives of a Marketing Plan
All marketing efforts must be focused on generating revenue for the company. The marketing department usually doesn't work under these premises. On the other hand, the sales department has a very clear idea about it. We have always measured the sales departments in terms of reaching their quota just as we do with each sales representative. We should do the same with the marketing department. So the question is:
How do I measure the performance of marketing in sales? Can I really do it?
The answer is YES. If we have a well defined objective and we measure our marketing's return on investment (ROI), we can. We will talk about metrics later on but for now, in order to have a clear objective or goal, it must be SMART, that is, it must be:
In other words, an objective that is not ambiguous and that is written down in a clear way, communicating its importance to everyone and specifying the people involved. For example, saying that our goal this year is to generate a position in the mind of the consumer, or what we call a share of mind, is a perfect example of something ambiguous that is not directly connected with sales.
The objective should be measurable in numerical and in percentage terms. If it can not be measured clearly, it will be very difficult to reach it and to understand why it wasn't achieved when that's the case.
This objective must be something that can be achieved based on previous experiences and assumptions that have been verifiable. It should not be based on a "good wish" such as saying "we will increase sales this year by 100%".. of course we all want to grow twice as much but if the previous year we only grew by a 3%, growing to 100% is a goal that will hardly be achieved. This is the main mistake when setting a goal. You have to put your feet on the ground and think very well the assumptions on which you will base your goals.
It must be important for the business and unleash a real initiative. As we mantioned at the beginning, if it is not directly linked to sales, it may not be so important and, if it is ambiguous we won't be able to measure it effectively.
The goal must be achieved within an specific period of time, otherwise there will be no sense of urgency.
An example of clear objectives in a marketing plan would be:
To increase sales a 20% per year, reaching the monthly fee of $ 500,000.00 per sales representative. Marketing is committed to generating 100 qualified prospects per month, that will be passed on to the sales team. The sales team is committed to give attention to these 100 contacts with a great level of service by calling or contacting each prospect at least 4 times before canceling it. The will generate a presentation and value proposition for each prospect.
This example gathers all the SMART objectives. It:
- Specifies the level of commitment of marketing and sales
- Provides a measurable metric, reachable with a monthly fee
- Is relevant and specific to the business
- Unleashes activities that can be performed.
Alternatives to a Marketing Plan
The second issue that the managers of the companies usually ask about (and is rather incorrect), is to go through the alternatives that they have to a marketing plan. They do this mainly due to the cost of the means that they'd need to use. The principle is the following:
If resources are scarce, they should be applied in those media that are most effective in terms of costs. By doing so, we will make a better use of the money that we invest and its return will be profitable. In other words, we will earn more money by investing less.
To give an answer to this, we must answer two questions:
- How much does a new prospect cost?
- How much does a new client cost?
In order to answer this, one must calculate the amount invested in a medium and divide it by the number of prospects that it generates and then, by the number of clients that it generates.
That is, if we go to an expo, convention or tradeshow, and know that its total cost between the stand, assembly, construction, personnel and advertising (such as pamphlets or flyers) is $ 100,000.00, we will then have to divide this number by the number of prospects that it generated. If by the end of the event we end up with a database of 10 prospects, ($ 100,000.00 / 10 = $ 10,000.00) then the cost per prospect is of 10 thousand.
Similarly, if of these 10 prospects only 2 new clients were generated, the cost per customer is of $ 50,000.00 -fifty thousand. ($ 100,000.00 / 2 = $ 50,000.00).
If we could make this math with each medium that we invested in, we could evaluate which project would be the most profitable in terms of generation of prospects and sales.
If we invest in a media that can't be measured, we'll be just spending money and not to investing it wisely.
Based on this analysis, we can assure you that, most of the time, investing in a digital strategy will report a higher return, compared to traditional media. And if you have more money than brains, you will continue to invest in the latter.
Otherwise, we recommend that you seriously consider investing in a digital strategy. I'm not saying that traditional media is no longer useful, but it is much less profitable. That is why we must weigh and decide on which ones should you keep, which ones should be discarded, and how much should be invested on each one.