How to increase your business with a strong marketing plan

How to Increase Your Business with a
Strong Marketing Plan
www.scoresewisconsin.org

What Does SCORE Do?
“ Counselors to Americas Small
Businesses”
• Provides quality, free and confidential
counseling to small businesses.
• In person at a SCORE, neutral, or client
locations.
• Telephone counseling
• Email counseling
• Provides low cost workshops
SEO and Internet Marketing

SCORE SE Wisconsin Chapter
• 50+ highly experienced active volunteers with
varying skills and talents.
– Many have run small businesses.
– Others have worked in banking, real estate, law, or for
local corporations.
• Housed with the SBA at 310 W. Wisconsin Ave.
(Blue Reuss building).
• Anyone wanting business counseling can call the
SCORE Office (414-297-3942) or sign up on the
SCORE Milwaukee website
www.scoresewisconsin.org.

Selling Defined
• Persuade a potential customer your
product or service solves their problem or
fulfills their need(s). It can be face to face
or indirect. It assumes:
– Product(s) service offering is competitive
– Customer service is competitive
– Owner and staff are trained and motivated

Persistence in Selling Pays Off
“On Average…..
It may take six contacts to acquire
a new customer…..
75% of all sales people quit
after the fourth contact”

Marketing Defined
• Marketing is how you want your customers to
view your business. It’s how you position
yourself.
– You and your employees (sales & customer service)
– Your product or service offering
– Your operating policies:
• Pricing, credit, warranties, service and returns
– Location (more important if retail)
– Last to be considered: Advertising and promotion

What is a Marketing Plan?
• It projects your monthly and annual sales
revenue
• It requires specific plans on how to
improve your current market position.

Why Plan?
“If you do not know where you
are going, it does not make
any difference on how you get
there”
Lewis Carroll from “Alice in Wonderland”

Planning Benefits
• It reduces uncertainty
• It identifies problems/opportunities
needing action (and fast)
• It lets you sleep at night
• It saves you money!!!

Where Do I Start?

Begin With Your Monthly Reports

Allocate Revenue by Month Using Sales
History Adjusted for Seasonality
1 Qtr Apr May Jun
Net Sales
Actual
$ 156,711 $ 43,379 $ 53,990 $ 43,608
% Change -6.5% 29.3% 99.8% 10.5%
Gross Profit
$ 61,056 $ 16,549 $ 18,713 $ 16,776
$s
% Margin 39.5% 38.2% 34.7% 38.5%
Cum Sales $ 156,711 $ 200,900 $ 254,079 $ 297,977
Quarterly
Sales
$ 156,711 $ 140,977
% Change -6.5% 40.9%
% Year 25% 23%
Source: Monthly P&L

Establish a Marketing Budget
Base Yr. 5% Growth 10% Growth 15% Growth
Sales $620,786 $651,825 $682,865 $713,904
1Qtr 25% $162,956 $170,716 $178,476
2Qtr 23% $149,920 $157,059 $164,198
Annual GP$ 38% $247,694 $259,489 $271,283
1. Start Budget 5% $ 32,591 $ 34,143 $ 35,695
2. Allocated $ -12,000 $ -12,000 $ -12,000
3. End Budget (1-2) $ 20,591 $ 22,143 $ 23,695

Analyze Your Sales Data!

Example: Average $/Sale and
Customer Trend
100
112
131
146 146
100
96
87 87
79
160
140
120
100
80
60
40
20
0
2003 2004 2005 2006 2007
Avg./Customer
Customers

What Does the Data Tell You?
• Increasing $/transaction is strong but not
growing.
Excellent job of trading customers up
Improved product mix working well
Increased service revenue working well
• Customers are disappearing! Why? Price?
Product Lines? Competition? Promotion?

Use of Basic Sales Data
Customer Transactions +
Avg. $ Per Sale +
• Generally a very good
sign
Avg. $ Per Sale -
• Short term OK, long term
you may lose
Customer Transactions -
Avg. $ Per Sale +
• How negative is customer
traffic? Why?
Avg. $ Per Sale -
• DANGER SIGNAL!!!

Price Reduction Impact on Profit
Base -5% -10%
Revenue $100,000 $95,000 $90,000
Cost of Goods -50,000 -50,000 -50,000
Gross Profit 50,000 45,000 40,000
Operating -45,000 -45,000 -45,000
Net Before Taxes $ 5,000 $ 0 $-5,000

Target Market
Define your customers
– Example #1 (Kitchen Remolding)
• Home ownership
• Generally affluent ($100,000 plus)
• Women are usually the decision maker
• Decision takes multiple visits/meetings/calls
– Example #2 (Plumber or Electrician)
• Residential home ownership
• Decision usually within hours or a few weeks
– Example #3 (District School Boards)
– Example #4 (Department of Public Works)

Recap
1. Project sales revenue by month/quarter
2. Establish a budget
3. Analyze your sales and customer data
4. Define problems/opportunities
5. Understand pricing dynamics
6. Select your target audience/customer base

Think Through Your Business
• Have I completed a competitive analysis of key
marketing variables? What have I learned?
• What promotional techniques work in my
industry and business?
• Do I have sufficient funds for a continuity
campaign?
• Do I need help? Most business do!

Customer Priorities
New Established
Business Business
1-3/5 Years 3/5 Yrs. Or More
Primary Emphasis New Current
Secondary Emphasis Current New
Promotion Funds Reach out vehicles Loyalty based
Promotional $s High Low

Summary from Industry Specific
Software
Avg Customer Count 2011-12 25,691 (1 location)
Ave 2012 Repeat Rate-79.3% 20,373
1. Avg Service Sales 2011-12 $289,945
2. Service Sales before Discount $323,960
3. Avg Service Discount 2012 10.5%
4. Cost of Service Discount (2-1) $ 34,016
5. Cost Per Service Customer $ 1.32
Potential Annual Savings: 1-5 Locations
Locations 1 2 3 4 5
Reduce discount total by 25% $ 8,504 $ 17,008 $ 25,512 $ 34,016 $ 42,520
Reduce discount total by 35% $ 11,906 $ 23,811 $ 35,717 $ 47,622 $ 59,528

Create the Promotion Plan
1. Establish a budget (5% of net sales for
example)
2. Current customers are more important
than new customers:
– They generate more income
– They recommend new business
– They are less expensive to promote

Reach, Frequency, and Recency
• A single exposure is reach, more exposures are
frequency
• Multiple exposures (frequency) leads to
awareness of the message
• Overcoming objections and persistence
(frequency) is critical in personal selling

Changing Promotion Options*
• Traditional
– Yellow Pages
– Signage
– Print Advertising
– Press Releases
– Direct Mail
*Source HP
• Digital Options
– Website & E Mail
– Social Media
• Twitter
• Face Book
• Google Plus
• LinkedIn
• You Tube
– Targeted Advertising

Why Use Social Media?
1. Attract new business
2. Stimulate current customers to buy more
3. Create referrals

Benefits of Social Media
1. It’s considered free
2. Works like word of mouth (+/-)
3. Capable of targeted advertising
4. Widely used. It is a hot topic!
5. Provides reviews (+/-)
6. Changes quickly (+/-)

Social Media Time Commitments
• Frequent Updates
– Twitter
– Facebook
• Infrequent Updates
– YouTube
– Linkedin

Prioritize Spending
– Website/E Mail-Consultant?
– Social Media-Consultant?
• Constant Contact-855-816-6508
– Yellow Pages (if applicable)
– Advertising
• Broad geographic area
• Must have significant funds

Create or Update Your Web Site
• Web site for information & lead generation
– Examples:
• CPA or law firm
• Business to Business
• Web site for information & transactions
– Examples:
• E Bay (listing of products)
• Restaurants providing reservations and discounts

Create the promotion plan
• Create a loyalty program
– Requirements
• A computer database with customer name, address
and e mail
• Create a simple rewards program:
– Special sale for current customers (mail or e mail)
– 5% off future service and parts (Ford Motor Company)
– 20% off annual service plan for furnace inspection (HVAC)
– Rebate for loyal customers (B2B performance based)
– Cash back rewards (1% to 2%) from USAA and Fidelity

Current or Loyal Customers
• Vehicles to contact customers
– E mail (spam filter may block out)
– Social Media
– Direct mail* (cooperative funds)
• Post cards with coupons
• Flyers by name and promotional incentives
– Signage and receipt/invoice: match competitor’s
price (document rules) within defined period

Contacting Current or Loyal
Customers
Prioritize by Area and Customer Profile
• Geographic area based on your database
(80/20 rule)
• Examples:
– Geography: Waukesha and/or Milwaukee
County, or specific zip codes
– Sales message: Clearance prices

Seeking New Customers/Clients
• Advertising-Excludes Internet
– Concentrate in one medium (newspaper, radio,
billboards, etc.).
– Broad geographic customer base required
– Frequency or continuity is more important than type of
advertising (newspaper or radio). Several weeks
required to create awareness
– Buyer beware: Broadcast rates may be negotiated
(newspaper excepted)

Seeking New Customers/Clients
• Consider the “Yellow Pages” if problem driven in
addition to website and e mail.
• Targeted media for new users (internet promotional
offers, personalized letter, newspaper inserts, flyers
and direct mail, cooperative or single, by zip code)
• Create awareness: listing in associations, cross
promote with non competitive businesses (see
workshop packet), network, etc.

Seeking New Customers in an
Industrial or Service Business

Service Oriented Business
Message Reinforcements
• Create competence and credibility
– Outstanding website
– Through licenses
– Through certifications and degrees
– Inform customer of insurance coverage
– Guarantee your work (in writing) and set milestones
– Through references (with permission)
– Industry experience and associations (BBB)
– Disclose how adjustments or roadblocks addressed

New Customers for Service Business
• Direct selling using the telephone (cold calling), in
person (cold calling) or letter (e mail) followed by call for
appointment.
• Network and research through professional associations,
trade shows, and internet (Linkedin). Contacts!!!
• Referrals!
• Follow up aggressively with potential clients/customers-but
do not be pushy!
• Work on new business regularly

Managing the Marketing Budget
Month 1 Month 2 Month 3
Revenue Estimate $45,000 $54,000 $44,000
Revenue Actual $38,000 $60,000 $48,000
Difference ($ 7,000) $ 6,000 $ 4,000
Budget at 5% $ 2,250 $ 2,700 $ 2,200
Budget Adjustment
and Revision
Adjust next month’s
expenditure +/-
based on past
month sales
$ 2,350 $2,500

You Plan Is Almost Complete

Review and improve the plan
• Allocate time to review the plan monthly
– Adjust the budget based on results
– Demonstrate patience in evaluating plans
– Remember marketing includes more than just
promotion
– Learn from and act on experience
• Do not be afraid to experiment if it makes
sense.

Small Business References
• www.score.org
– National e mail counseling
• www.wctc.edu
– Small business center
• www.matc.edu
– Multiple locations throughout the county
• www.irs.gov
– Tax references and PDF downloads

Continued
• www.dor.state.wi.us
– Tax filings and revenue questions
• www.sba.gov
– Reference center for small business
• www.bizstats.com
– Business statistics and financial ratios
• www.mpl.org
– Online databases and in person support

How to increase your business with a strong marketing plan

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