How To Use Growth Hacking to Grow A Tech Start Up

The term growth hacker and the latest hack for x,y or z seems to be everywhere but exactly what is a growth hacker and how can their skills be used to grow a tech start up business?

What is Growth Hacking?

Sean Ellis, who was instrumental in the rapid growth of Dropbox, is credited with first using the term Growth Hacker back in 2010. Their role is to grow a user (or customer) base from a low (or nil) base into the thousands and beyond. Growth hackers are marketers but they are completely focussed on one metric and one metric alone and that is growth.

The term growth hacker is now, like most buzzwords, overused to the point it is starting to get annoying but it was originally a term associated with start-up growth, particularly for start-ups working on internet based products. Many of the techniques used by those involved in growth hacking are long established and used by traditional marketers on a regular basis, but with a twist

In his 2012 post  Aaron Ginn defined the three key characteristics of a growth hacker as creativity, data and curiosity. Growth Hackers tend to be unusual as two of their key characteristics are from two different ends of the spectrum. A creative person is not usually also associated with a talent for numbers, detailed analysis and experimentation.

Applying To The Tech Start Up

Although growth hacking is most often associated with businesses involved in internet based products, services and Apps their rationale and methods of working may be specialist electronic component from a high tech start upapplied to any high tech start up. However, a pre requisite is the marketing person involved must have a detailed knowledge of the internet, generating traffic (paid and organic), analysis tools, nurturing campaigns and (crucially) how people and information flow online.

As a first step they must be able to identify the best opportunities to achieve new customer growth. With this in place they must then be able to break down the steps required to capitalise on those opportunities into actionable steps, each with a defined start, end and closure point. Finally, they must be able to put the required analytics in place to measure success (or not).

The best growth marketing process for a new technology start up may not have been tried before so experimentation, with data to back up the results, is key. Market disruption is important for any technology start up and the same applies to the marketing process. Often, Tried and trusted will not work and a seat of the pants type approach is the best way forward. This can be both scary and high risk but the risks of failing using something more tried and tested are also high.

Experience based on experimentation, the data obtained and the workings of the internet is key. Porting a process that works well for one business to the next is unlikely to work but the data obtained in one assignment is certainly important to the next. Finding the right marketing person (or to go back to our original definition – Growth hacker) can be difficult but given the high risk nature of their work and the dramatically increased chances of start-up failure if they do not succeed it is of vital importance. The problem is that outside of the U.S.A such people are in very short supply.

The Value Of Customer Input To Your New Product Idea Process

Asking your most important customers what new products on solutions would be of benefit to them may seem to be a logical approach to your new product idea process but there is a problem

Steve Jobs said: A lot of times, people don’t know what they want until you show it to them. Henry Ford said: If I had asked people what they wanted, they would have said a faster horse

and that is you are unlikely to receive the answer you need or expect

Customers Don’t Know What They Want

In most medium sized B2B businesses there are several key decision makers. So who is best to talk to about potential new products? Probably not purchasing or quality so engineering or project management may appear to be a better bet. The problem is they are undoubtedly focussed on the latest project or task rather than looking ahead to what they may need in future.

Even if engineering and project people had time to look ahead the value of their input may be limited. In many medium sized organisation most employees operate within their own cells and very few have a complete picture of what is coming along in future or even where their current project fits within the overall whole.

Customer New Product Ideas Are Bad Ideas

When it is possible to engage in a potential new product discussions they often tend to centre on the obvious. What do the competition have that you do not? Or minor adjustments to existing products rather than true new product concepts.

This problem is exasperated if sales are entrusted with the new product discussion as their focus is also short term (rightly so) and competitor focussed. Returning with a message that everything will be fine if the business simply copies the competitor products is a common (and lazy) sales response.

Few businesses have limitless resources so it is unlikely that it will be possible to identify any common new product themes from the relatively small number of customers it will be possible to survey on new product ideas. Each response returned will often therefore need to be researched further as a stand-alone item.

Improving The New Product Concept Process

A better approach may be to first develop some potential new products concNew product conceptepts in before engaging with customers. These may often be initial ideas with little detail on how they may be implemented but simply designed to solicit a response and to start a dialogue.

Fuelling the process with some potential ideas often leads to increased customer engagement and a better response that is less focussed on what is available now. Many of the concepts introduced will be complete non-starters but may at least deliver feedback on why they will not work that may be filtered in to the next set of concepts.

Marketing should be tasked to customer discussion rather than sales. This has the advantage of allowing sales to concentrate on the short term and ensure that the conversation is turned away from existing competition. With marketing in charge of the process any customer input can be fed directly into the new product screening process. Sales may then brought back into the process at a later point when new product concepts have been screened and developed to a point they may be taken forward.

Conclusion

Although the suggested approach is far from perfect for most organisations it is a more realistic approach than the approach undertaken by Apple and Ford of developing new products that are truly market disruptive. Although the returns from this approach can be significant the risks involved and the resources required are beyond most medium sized businesses

How To Simplify The Strategic Marketing Planning Process

Although the importance of a periodic strategic marketing planning process is well established relatively few businesses actually have a strategic plan in place and fewer still utilize and implement any existing plan. We discuss the two main reasons the strategic planning fails to deliver results and a potential method to address these issues.

To survive for any length of time a business must be expert at whatever it delivers but this leads to a focus on today’s market and the short term that makes it difficult to step away and take a longer term view. Key staff often grow up with a business which blinkers their view of the market. The impact on growth (or even survival) of a short term view may be recognised but many businesses avoid market evaluation and long term planning for two key (and interrelated) reasons:

  • The complexity of the process and the time and resources involved.
  • The perceived usefulness of the finished plan to the day to day running of the business

The complexity of the planning process often generates information overload, a lack of clarity and a final plan which is difficult, if not impossible, to implement. Hence, if a strategic plan is produced it often sits on a shelf gathering dust. Kaplan and Norton research shows that >90% of organisations fail to implement their strategies.

Strategic Marketing Analysis

To simplify the process and to provide clarity and focus it is worth answering some simple questions before diving headlong into the market analysis and planning process, they are

  • Evaluating strategic optionsWhat does the business offer?
  • Who needs what the business offers and why?
  • Which other businesses offer the same product/service that satisfies that need?
  • Given the above why should potential customers pick your business to service their needs?

Simple questions in principle but not so easy to answer in practice. In our experience it is often the last question that causes the most problems.

A brainstorming session can usually answer these questions in 40 minutes or so. Answering the last question often stimulates a re-evaluation of the answers to previous questions. A further 20 to 30 minutes can therefore be required to work back up through the relevant questions.

Identify Customer Needs

What basic customer need does whatever the business supplies satisfy? It is important to stop thinking in terms of products and services and to think instead about what customer problems are addressed. Fail to answer this question properly and any marketing analysis and strategy process will fail.

The natural next step is to define which potential customers (or groups of customers) may have this need and to profile and segment them appropriately. Unfortunately, in almost all cases, there will be other businesses attempting to satisfy this need and it is important to list them and their relative strengths and weaknesses.

When starting with needs and not product and services competitor analysis often throws up surprises. New potential competitors enter the mix and others that may have seemed a major threat may turn out to be less dangerous than previously imagined.

With competitor analysis complete it should be possible to answer the final key question and define what sets the business apart from the rest. It is the answer to this question that is the key and, once the answer is in place, an evaluation of which businesses may require what the business offers and competition is required.

Although the above short form method can be no substitution for a thorough strategic planning process it does give both some clues where to start and some focus to the activity that ensures the final plan has more relevance to the business and more chance of being implemented rather than just gathering dust.

The New Product Development Process – 5 Steps To Reduce The Risk Of Failure

The reality of the B2B new product development process is very different to what much of the standard marketing literature would like us to believe. It imagines a blank sheet of paper and sufficient company resources to develop new products without a driving customer.

Few, small and medium sized businesses are in such an enviable position and, those that are tend  to be concerned about the substantial financial risks associated with new product failure. However, the lead customer approach is not without its own set of problems.

As the lead customer often contributes financially to part of the development costs they can require specific modifications that make the product less applicable to the general market and impose restrictions on sale of the product to certain market segments. With the safety net of a known first customer marketing departments can be lulled into a false sense of security and fail to research and plan the new product launch and growth as they should.

Product Marketing Research And Planning Is Vital

In a recent post on product innovation we discussed the importance of a robust new product screening process. If a new product is customer driven this process may be less rigorous than it should be or overlooked entirely. This is one of the major reasons new product introductions fail or progress no further than the lead customer. The market should be segmented appropriately, likely targets for the new product identified and segment specific marketing plans assembled.

What worked in the past has a significantly lower chance of success today. A business with an established customer base could once rely heavily on a new product press release in a number of trade specific magazines, perhaps some limited product advertising and the sales force to beat on doors, set appointments with prospects and introduce the new product.

Switch From Outbound To Inbound Product Marketing

Today, many trade publications have either closed down or carry a fraction of the content they did in the past as the readership has collapsed and moved to the internet as a source of information. The decline in the impact of push marketing including telemarketing, advertising and, to a point, Email is well documented.

Inbound marketing by contrast is based on building marketing collateral and content and using this to build awareness, credibility and to support the sales process. This requires a significant amount of time and effort so content production must begin well in advance of the product launch.

Content should be produced (or existing information modified) to specifically match the requirements of the plan. Sales should be brought into the process at the earliest opportunities to ensure their lead prospecting and nurturing activities will be properly supported.

Delivery channels for content, be they online or offline, must be adequately researched and readied before the product launch. This is of vital importance and is a subject that is often overlooked, there is little point in talking if nobody is listening.

Integrate Sales And Marketing

As mentioned above marketing needs to work closely with sales. It is important to consider which existing customers are most likely to be the early adopters (obviously one will already be in place) and how these opportunities can be converted. Positive customer experiences with the product should be used to build credibility with other potential customers. The impact of social proof (Dr Robert Cialdini) can be a powerful sales tool.

With early adopters in place where will the growth (and volume) come from? Targets should be identified and prioritised and marketing activity focussed to help. A plan should also be put in place to support any sales intermediaries. Our own experience shows it is unwise to leak or drip feed new product information to far in advance as it often causes confusion and a lack of control.

Plan The New Product Launch

There is only really one opportunity to launch the new product so it is important to get it right. Everyone must have agreed and signed up to the plan, appropriate content should be in place and online and offline promotional channels should be set up and ready to go. In B2B markets there are often exhibition and seminar opportunities and these should be ready to be exploited for maximum impact.

Plan Product Sales Growth In Other Market Segments

Given the reality of limited sales and marketing resources in many small and medium sized manufacturing businesses it will not be practical to attack all identified market segments at one time. New (and potentially lucrative) market segments could appear in time leading to a re-assessment of the priorities but it is important to have an plan in place  as a reference point to refer back to if priorities do change.

Conclusion

The New Product Development Process can never be risk free and it is perfectly valid to try and mitigate some of that risk by finding a lead customer before making a commitment. However, it is important to be aware of the risks of this approach and to take appropriate steps to deal with those risks.

A plan is of vital importance to address each market segment, to seek out the early adopters and to plan growth. Although there can often be some internal company conflicts and politics it is vital that sales and marketing co-operate and both genuinely sign off on the plan and commit to the way forward.

B2B Market Penetration Strategies

In B2B markets growth tends to be based on either new product introduction or attacking new markets. In this post we cover how to execute a new market penetration strategy with the aid of a case study.

Successful new market penetration depends primarily on the nature of the market and the existing competition. It is notoriously difficult to obtain any foothold in static markets but a growing market does offer some opportunities. Entrenched competition will often be at the top of the experience curve having learned from their mistakes over many years, whereas any new entrant must accept that it will take time to generate any meaningful results and gain traction.

Potential Marketing Strategies to Employ

Two potential, relatively low risk strategies, to employ are to only attack a small market niche and once established grow out from there and/or to collaborate (to the benefit of both parties) in some way with an intermediary with an existing foothold in the target market

Perhaps the greatest opportunity exists if the target market has an entrenched competitor that is either complacent or in a weak (financial, mismanagement, loss of key people) position. If a solid strategy can be put in place to deliver the highest levels of service at competitive pricing then a market presence may be established in a relatively short timescale by stealing market share
New market analysis.
If attacking a new market is to succeed detailed market research is vital. An experienced and flexible sales and marketing team is also required and in many organisations this can be a real issue. The best sales teams tend to be focussed on the immediate future and marketing teams are often competent in their own market but stretched when it comes to addressing something new.

New Market Penetration – A Case Study

What follows is based on a two real businesses operating in a high technology B2B market. The market exhibited slow growth but did offer high margins. To preserve confidentiality the company names and details of the precise market have been excluded.

A U.K based business had built a strong presence in the marketplace growing from a small start up to a business with turnover exceeding £20m. The business owner was a technologist focussed on longer term market and product development who, after the first few years of growth, had employed a managing director to run the business on a day to day basis.

The business was the dominant player in its market niche but was starting to lose focus for a wide variety of reasons. Top level management was not exceptional and this was starting to be reflected in a slow decline in levels of customer service. The new product development process tended to be based on small revisions to existing concepts rather than any real product innovation.

The new entrant was USA based but already had some exposure to the market as they were a minor supplier to the target customer base with a different product range. They chose a niche distributor to take on the UK based business, offering them excellent support and training and higher margins on each sale than they could expect from their other lines. The chosen distributor had excellent relationships with the target customer base.

The new entrant copied and manufactured a limited range of the most successful product lines of the UK business without customer orders at a considerable cost and focussed their efforts on specific projects. With a higher level of quality, excellent delivery, good customer service and investment in low pricing (in the short term) they were able to take initial orders on a limited range of contracts.

The U.K business due to a mixture of complacency and poor management failed to identify the long term threat of the new entrant dismissing the initial level of their orders as insignificant. They failed to recognise the importance of the foothold secured by the new entrant and their ability to capitalise and build upon initial relationships.

Five years later with its business destroyed by a combination of mismanagement (and resulting financial pressures), bad luck and a loss of a major part of its business to the new entrant what remained of the U.K. business was sold to a competitor for a minimal sum. The new entrant built on their initial success by leveraging the relationships established to introduce a number of new product ranges.

Although blessed with excellent support from senior management and the backup of operations the drive behind the new entrant entry into the marketplace and their market penetration strategy was effectively one individual who spotted the opportunity and drove it through.

The new entrant executed a market penetration strategy perfectly. They identified a weak competitor and an excellent intermediary. They started with a niche, gained a foothold and built from there and they had a marketing and sales team (actually just one person initially) able to spot an opportunity and to build and execute a plan.

The amount of research carried out by the new entrant is unknown but it is not thought to have been extensive. This was a major risk given the amount of financial and other resources allocated to the project but in this case the strategy did pay off.

The Product Innovation Process

It’s a hard truth but without a product innovation process most manufacturing companies are destined to fail. In this post we discuss some tools and techniques to develop an innovative culture and the process of developing and screening new product ideas.

As technology moves forward, as new and innovative solutions enter the market, as economic conditions change businesses that fail to innovate to remain relevant in a changing market lose market share. Some markets may change very slowly but ultimately the end result remains the same

Innovation can take many forms. Myers and Marquis (1969) defined it as ‘not a singleOutput from the product innovation process action but a total process of interrelated sub processes. It is not just the conception of a new idea, nor the invention of a new device, nor the development of a new market. The process is all these things acting in an integrated fashion.’ In this post we deal specifically with product innovation

Any innovation process needs support from the top of the organisation, it needs resources and it must fit within the overall strategic framework of the business. A mistake made by many organisations is a failure to allow the process time to run its course without interference or mismanagement.

Generating New Product Ideas

Every product innovation process needs to start with a basic framework linked to the business strategy. A combination of Ansoff matrix, the value chain and competitive analysis tools can deliver an understanding of where the business is now and identify opportunities for growth that may be developed further utilising the techniques outlined below:

  • Brainstorming
  • Customer Input
  • Suggestion Box

Given a basic framework the product innovation process often starts with a brainstorming type activity. It is important that this is inclusive and not judgemental in any way if it is to be of value. Ideas that come out of this process may be rough and poorly defined but are the starting point for further work.

Customer ideas are also useful although our own experience shows customers are surprisingly poor at defining the products / services that may satisfy their future needs. Often the discussion turns to products offered by the competition today rather than future needs. Although the sales department may be the closest to the customer and have the best relationship they are not always the best at extracting the required information. Sales tend to be focussed on the next 6 – 12 months and achieving the sales forecast (rightly so) rather than what may help the business grow in future.

As brainstorming tends to be an invitational process and include mainly senior staff suggestion boxes (with incentives) can be useful as many good ideas can come from manufacturing operatives and junior staff who may be unwilling to raise their ideas in an open forum.

Idea Screening And Research

With a number of roughly defined product ideas in place it is important to develop a short but robust top level screening process to weed out those ideas that do not fit with business strategy. The process should not screen out ideas simply because they appear too difficult or do not fit with current manufacturing capability only those that clearly do not fit with the business long term objectives

Design of the top level (and subsequent) screening processes is essential as many good and valid ideas can be discounted simply because of a screening process that has not been thought through in appropriate detail and designed appropriately.

With several ideas in place a top level research process may then be undertaken to assess the market potential for the product and competition as an input to the second level screening process. A rough assessment should be made at this point of the investment required to take the product forward.

The process then repeats, screening out products that do not match the required criteria followed by more detailed market research before a final fine screening process which should result in only the best ideas moving forward to initial manufacturing trials, mock ups, prototypes and market sampling.

The importance of a product innovation may be clear but defining a building a process that delivers sound new product ideas that are worth further investment can be difficult. The key issues are adequate resourcing of the process, robust screening procedures and adequate market research with inclusion of all sources that may make a valuable input.

Financial Support For Business Growth – The options

When the recession hit many Government backed financial support for business growth initiatives simply disappeared. Although Government support for the SME market remains far from perfect at least some financial support initiatives to support businesses intent on growth have re-appeared.

This post covers some of the support packages currently available. The list is not exhaustive and includes only those offering modest sums to smaller SME and start-ups in the North East of England. The following excludes finance and grants for working capital and asset finance.

Growth Accelerator

The Growth Accelerator program is available to UK registered businesses employing less than 250 people and with a turnover less than £40m that are intent on growth. Many businesses entering the program are looking to exploit new markets, new opportunities and / or new products or innovations.

Funding is targeted at overcoming obstacles to growth (marketing and / or financial) and on developing the leadership and management skills of senior employees. Funding must be matched to a level depending on the company size. The nominal value of the support available is £3,500 to which a micro business (1-4 employee) would contribute £600 + VAT (@£700)

More details are available at www.growthaccelerator.com, the twitter feed @growthaccel is also worth a follow for latest information. In the North East region both WinningPitch and RTCNorth are involved in the Growth Accelerator project.

North East Business Support Fund

The business support fund is available to North East based businesses in B2B markets that have less than 250 employees. The fund (to a maximum of £1,400) does not cover capital purchase or printing or advertising costs but does cover a wide range of (new) projects including financial planning, process development, marketing, HR strategy and product development. Up to 40% of the full project budget may be funded (capped at £1,400)

The project is managed by NBSL. More details are available at www.nbsl.org.uk

With the economic outlook improving the above funding covers some of the costs and eliminates some of the risks associated with new business development but as both funds are time limited (Growth Accelerator closes mid 2015) then it is important to start the application procedure as soon as practical.

Build An Effective B2B Marketing Plan

The lack of an effective B2B marketing plan can often result in lost opportunities, a long term decline in business and market changes that catch a business unawares. However, too many marketing plans are poorly constructed and a complete waste of time and money. This post outlines a marketing planning process, some tips on how to maintain focus and some mistakes to avoid.

The strategy and planning process can seem complex and time consuming and therefore often drops to the bottom of the priority list. In a previous post on marketing strategy and return on investment I outlined the steps in a typical marketing planning process. Often, it is the early steps in that process that are the both the most difficult to understand and the most crucial to achieving the required outcome.

Retain Focus During The Marketing Planning Process

B2B Markets are complex and there can be a wealth of data (see below) to analyse and crunch. It is therefore often all too easy to lose focus. Three simple techniques can help retain focus without influencing the outcome of the marketing process.

At a top level briefly answering some key questions and pinning these to a wall or some other place they can be easily referred can often bring a process that is starting to wander back on track. Key questions to ask:

  • What basic product / service does the business provide?
  • Why are those products / services needed?
  • Who needs them and why
  • Who else can satisfy that need?
  • Why should a potential customer pick me?
  • How do raise awareness of the business and its product / service

At the bottom level it is worth drawing out the well known sales funnel on a large sheet of paper (trust me – there needs to be plenty of space for notes and alterations). You can go at the funnel from either end but during the marketing planning process it will need some numbers. What is the growth target, how many leads are required, where are those leads going to come from, conversions, resulting in sales, by segment.

Marketing Plan – The Key Steps

The first step is to analyse the current position understanding where the business is now and how it reached there. The key point to remember is this data collecting process must be completed without bias or any pre conceived ideas. With the analysis complete the results may be summarized and considered in conjunction with the desired future direction of the business over the next 3-5 years set by the business owners or senior management.

Many text books fail to cover the next step in sufficient detail (if at all) but it is important to draft out a number of possible paths (scenarios) to get from where the business is now (based on the analysis) to where it wants to be. These scenarios should include well defined target customer groups or segments.

A step often missed is the sign off by senior management of the chosen path before proceeding into the detail of how the business is going to progress down its chosen path, its objectives and the strategies to achieve those objectives. With the above in place the rest of the process building out the detail of the plan, estimating results (go back to the funnel mentioned above), modifying plans and setting programmes and schedules should be relatively easy for most professional marketers.

Most marketing plans fail because the analysis is performed without sufficient detail or with bias and the scenario developed is incorrect. Incorrect analysis and segmentation of customer groups is also often an issue. If the early part of the process is performed correctly the rest should flow without major problems.

Measurement, Control and Feedback

With the plan in place it is then important to measure actual performance against that stated in the plan and to take appropriate action. A well constructed plan should layout in detail programmes, events, timescales and expected results so it should be a simple process to go back and measure actual against expected.

Too often marketing plans are constructed and then spend the rest of their life on the shelf. This is a wasted opportunity and a significant waste of time and money. The prime reason plans never see the light of day is they are badly constructed and fail to deliver the required detail on programmes, events and outcomes.

Although building an effective marketing plan is a time complex and time consuming activity if focus on the key issues and process is maintained and some common mistakes avoided the activity can pay for itself many times over. Without a plan a business is more likely to drift which in the longer term can be fatal.

Addressing The Complexity Of B2B Marketing

There are many issues that add to the complexity of B2B marketing including the project driven nature of many B2B markets and servicing the needs of a large decision making team. This post offers some guidance on how these challenges may be addressed.

There are a number of reasons why B2B marketing is much more complex and challenging than B2C including.

  • Purchasing decisions made by a group rather than a single person.
  • Long buying cycles requiring ongoing delivery of appropriate information.
  • Project driven – changes and delays in the final project causing design changes, delays, objections and more competition.
  • Lower number of prospects increases the importance of each lead.
  • Relationships, at many different levels within a potential customer, are key. The more people in the decision making team the more chance of a poor relationship with one or more of those decision makers.
  • Product complexity leads to more objections and more information requests.

The traditional methods of dealing with this complexity were to have sales people able to identify the key decision makers and develop strong ongoing relationships with each of them. The sales process involved understanding needs, delivering information and dealing with objections on an ongoing basis until an opportunity arose to close the sale.

In many B2B organisations the same set of sales people were responsible for generating leads (with or without a marketing department) as were responsible for developing the sales process as discussed above. A more effective operation was based on splitting sales responsibilities between those responsible for generating leads, qualifying leads and establishing initial relationships (with the help of marketing) and those responsible for developing a sale to close.

Push marketing was used to promote a business and its products or services. Generally this involved delivering promotional messages on what a business offered, what made it different and why customers should buy via channels such as advertising, direct mail and telemarketing. Today, various studies show that push channels are less and less effective leading to a rise in the popularity of inbound marketing.

Inbound marketing is based on pull rather than push and, when delivered correctly, is a perfect process to address customer information requirements at various points in the sales process (see list of B2B marketing challenges above). Content marketing represents a large part of the inbound marketing process and is based on delivering useful, engaging, information to prospects via the most appropriate channel and at the correct point in the sales process.

Unlike push marketing the information delivered is not promotional in any way but simply services the information requirements of various members of the decision making team at appropriate points in the sales process. How this non promotional information material may be converted to sales opportunities will be the subject for a future post.

Content marketing then services the information needs of a diverse group of decision makers; it raises the credibility of the potential supplier and keeps them front of mind. Content may be delivered over an extended sales process and address objections and product complexity issues before they arise. Ongoing delivery of appropriate information also maintains relationships over the long term, reduces the cost and improves the effectiveness of the sales process. Today, Personal relationships are still of importance but are most effective when combined with an inbound marketing process.

The project driven nature of many B2B markets adds further complexity. It is all too easy to be well placed with one customer only to find that another potential customer wins the contract and all the hard work is wasted. Often many sub contractors (each a potential customer) bid for a single major project. It is important to cover each of these potential customers (sub contractors) and their decision making teams to avoid missed opportunities and wasted resources. A project tracking system, linked into the content marketing and sales process is one solution. How these may be constructed will be covered in a future post.

To be successful in B2B markets requires a well structured sales organisation and effective marketing. A specific type of marketer is required with industry knowledge, long term experience of the traditional B2B marketing process and knowledge of how to integrate what is best from the traditional approach with the latest best practice inbound marketing techniques.

Should you want to know more about the project tracking process then please get in touch.

 

Marketing Strategy And Return On Investment

Does the time and effort expended in preparing a marketing strategy really deliver an appropriate return on investment? This post sets out to answer that question for a small business (30-99 employees) involved in B2B markets.

The first step is to estimate the costs involved based on the time taken and the level of people involved. The costs can be relatively easy to determine to a reasonable degree of accuracy but the returns can be more difficult to establish. Generally, the returns can only be estimated based on a percentage increase in sales directly associated with the marketing strategy and planning process.

When considering the costs it is useful to first define the steps in a typical marketing strategy process before allocating time and personnel to each task. A typical process may be:

  1. Decide on the overall long term company objectives.
  2. Detailed analysis of the current situation.
  3. Summarize and consider findings.
  4. Consider various scenarios and the best way to achieve long term objectives.
  5. Once a way forward is defined establish a set of defined steps.
  6. Set objectives.
  7. Decide on strategies to reach those objectives.
  8. Set measurement criteria.
  9. Review, make required changes, sign off and agree.
  10. Implement.
  11. Measure and refine.

Steps 1, 4 and 9 require detailed involvement of the business owners or senior managers but all remaining steps can be completed by suitably qualified more junior personnel. Steps 10 and 11 are key parts of the overall process but are not included in the cost analysis.

Assuming one key decision maker or business owner then two days of their time should be sufficient to complete steps 1, 4 and 9. The most time consuming tasks in the entire process are steps 2 & 3.  Part of these tasks must be completed with by a suitably qualified marketing person but part can be completed by lower level staff to research, analyse and number crunch data. In the size of business outlined above one week of marketing person time and two weeks of administrative time should be adequate.

The analysis task often extends beyond the marketing team as data is often required from other business departments. Typically each department head may spend half a day on the task with up to a day of work required in each department by more junior staff. Department heads input will, in most cases, also be required during stage 9, taking up to a further half day each.

All other tasks may be completed by the senior marketing person with some lower level support. For the business size outlined above this may take a further two weeks of their time and a week of lower level support. Based on the above and some assumptions on salary costs alone then the total cost of the marketing planning process (excluding steps 10 and 11) will be in excess of GBP 4,700.

The returns on this investment are more difficult to quantify. At a base level it should be possible to determine what level of sales will return a margin to cover the above cost. This will then identify the breakeven point that may then be broken down further into the number of items to be sold to cover the costs.

If, as a minimum, the marketing strategy and planning process identifies the real unique selling points of the business and the promotional plan can be refined to ensure only this message is delivered by the most appropriate channels then the savings on wasted promotional effort alone are likely to more than cover the cost of the strategic process.

If the strategic process identifies a single new opportunity for the business or ensures that the business does not blunder down a strategic blind alley then the costs will be covered many times over. The issue then becomes how to make the time available to the marketing department, senior management and divisional management to complete the marketing strategy process.