Why is a business plan needed before a marketing strategy?
So you have a brand new business or a relatively young business. You have a good idea, a logo and a place to house your small team (or it could be you!). You can’t wait to start interacting with customers and see orders coming in. All of that means you’re ready for some marketing, right? Not so fast. By PIER Marketing.
Sure, marketing is designed to help you target your audience and attract customers, but first you need to have a business plan. It may not sound like the most exciting activity in the world, but developing a business plan is absolutely essential to good marketing. Without it, all marketing activities undertaken can be costly, time-consuming and less effective. In other words, marketing success hinges on a solid business plan.
The truth is that starting a business takes hard work and careful planning. The good news is that this planning pays off when your business is up and running like a steam train.
Building a successful and sustainable business is a long game – and it starts with a business plan.
What is a business plan?
In short, a business plan helps determine what makes your business unique, what exactly you offer, who your customers are, and how your business will actually make money.
Of course, it’s also a lot bigger and more granular than that. It starts with knowing your vision, mission and values, which then crystallize into concrete goals. These objectives help you formulate the main systems and processes of your business.
Why is this important?
A business plan is the bridge that connects your business to your marketing efforts. Without this bridge, you might find yourself exerting far too much energy swimming in a sea of confusion and non-strategic activity when things would be much easier and more efficient with a plan (we like a metaphor inspired by ocean here at PIER). You can launch a digital marketing campaign with all the excitement in the world – but if you haven’t thought long and hard about who you’re targeting and why, it ends up being a case of “throw it all away and see what sticks”.
Additionally, the systems and processes defined in your business plan are what make your business scalable, as they create the structure to expand your team (and therefore your business) rather than having to reinvent the wheel. every time you grow up.
Thus, once a business is established, customer retention becomes both more economical and more powerful than acquisition. And now for the fun part: real strategies to encourage customer loyalty.
Development of a business plan
At PIER, we’re big fans of Strategyzer’s Business Model Canvas, which outlines nine building blocks every business needs to get started. You don’t need to cover all the blocks before the marketing can begin: the marketing activity can actually occur alongside the formation of these blocks, and in fact the first six blocks involve marketing.
1. Customer segments
Step One: Know your customers and who you are targeting. Rather than trying to be everything to everyone, it’s wise to segment your target audiences so you can develop your sales offering and market to them more effectively. While some businesses belong to “mass market” industries (think, for example, a supermarket or an appliance store), most of us deal with a small slice of the consumer base and we need to know the needs and wants of our particular slice. . Research can be a useful tool in this step.
2. Value Propositions
While all businesses are unique in some sense, chances are your industry is flooded with similar offers. If you are joining an existing and possibly saturated market, you need to communicate your advantage. And even if the market you’re playing in is new, innovative, and niche, you need to be crystal clear about your selling point.
This step is about clarifying exactly what you offer and what makes your business unique – your Unique Selling Proposition (USP) – which could be something as simple as providing prompt and sincere customer service. Again, research is important here (especially research on your particular market and where you fit within it). Knowing this will inform your messaging and marketing strategy.
Channels are the means by which you reach your customers. They include direct channels such as your sales force and website, and indirect channels such as physical stores, partner stores, and wholesalers. There are also “proprietary channels” (meaning channels owned by your organization) and “partner channels” (those owned by an outside organization). Ideally, your business would employ a combination of the two – while partner channels reduce your margins, they also get more exposure.
4. Customer relations
As the bread and butter of your business, how you interact with your customers is important. Depending on your business model, customer interaction may involve personal support by phone, email, or face-to-face; self service; automated service (via telephone or online chat functions, for example); web forums; call centers; co-creation (in the form of user reviews) and so on. If you’re in a specialized industry where customers need a high level of advice, your customer relations infrastructure will be different than a company that provides quick fixes to common problems.
This stage also involves customer acquisition and retention efforts, which is your strategy for winning new customers and retaining customers once you have acquired them.
5. Revenue streams
There are a myriad of ways that revenue flows into a business. There are asset-based businesses that sell physical products (books, makeup) or services; those that charge user fees (hotels, couriers) or subscription fees (Netflix); those who make money through leasing or renting (rental cars) or licensing (stock photos); those that generate revenue through advertising fees, etc.
Your business may be a combination of various sources of income, but knowing where your money will actually come from helps you focus your attention and efforts on your most profitable sources (see FranklinCovey’s Four Execution Disciplines). It wouldn’t make sense, for example, to spend 50% of your time, energy, and budget selling sneakers in person if your business actually derives 90% of its revenue from selling boots online. .
6. Key Resources
This step involves determining and defining the resources that your business relies on to operate. Resources can mean everything from your production facilities and physical products to intellectual property, finance (funds from banks or investors) and human resources (experts to develop your products or staff to serve your customers) . Again, this will depend on the nature and structure of your business, but determining what resources are keeping your business afloat is key.
7. Key Activities
While some aspects of a business can be automated, no business is truly “set and forget”: it requires maintenance. The folks at Strategyzer tell us that key activities fall into one of three categories. Production, which is the main activity of the manufacturing industry, consists of designing, manufacturing or delivering products. Problem solving involves creating new solutions to customer problems and is a key activity in the service industry. The third category is providing a platform or network (think eBay or Amazon).
Whichever category you fall into, your key activities are the things your business must continue to do (and continue to do well) in order to stay relevant and meet your customers’ needs.
8. Key partnerships
Key partnerships are becoming increasingly important to businesses (in fact, many businesses couldn’t function without them). This stage includes forging alliances with your non-competitors, strategic partnerships with competitors, and relationships with suppliers. Basically, it’s your contacts, connections, network, and relationships.
There are various motivations for these partnerships, which range from optimization and economy of scale (eg when infrastructure is shared between companies to save costs); reducing risks and uncertainties (pooling knowledge and resources to find a solution); and the acquisition of particular resources and activities (outsourcing of certain tasks).
9. Cost structure
Finally, your business plan should be solidified by the process of reviewing and calculating all the costs involved in starting and running your business. Many business owners overlook this step and don’t consider that in the first few years of business, they could be losing money by not paying themselves a salary and having no other form of support. ‘use. Of course, this also involves costs such as the purchase of materials and equipment, the rental of premises and the remuneration of staff.
Naturally, your business plan can and will evolve as your business progresses, but having the framework provided by a business plan will set you up for a stunning marketing strategy.
If you have any questions about the phase of business you are in and are ready for marketing, contact PIER today and we would be happy to talk with you.
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