This is the second post in our marketing strategy series. The goal here is to help small businesses make smart marketing strategy decisions to achieve their business objectives.
In broad terms, an effective marketing strategy includes three components:
1) A strategy or situational analysis
2) Strategic decision making and goal setting
In this post, we will focus on the second step. Strategic decision making is the process where you take the situational analysis inputs covered in our first series post — your customer needs, your company and product capabilities, and your competitor activity — and start to build a plan. In other words, this is where the proverbial rubber meets the road and your marketing programs begin to take shape.
Setting Objectives and Goals
The first part of strategic decision making is defining your objectives. Start by simply writing down a list of everything you’d like to accomplish in your business during the next 30, 180 and 365 days. Don’t worry about structure at this point. It’s more important to get everything down on paper and start your thought process.
I have also found it helpful to try some basic, back-of-the-envelope math to help quantify the impact that each objective will have on a particular business. Calculating how a goal will impact your business, even approximately, is a great way to evaluate two things: are you focusing on the most important areas and are your goals aligned with where you want to take your small business?
Once everything is on paper, you can start to group your objectives into categories. You’ll probably find that many of your objectives overlap, so you can consolidate them into a more manageable list. Some common categories of objectives involve:
- Website or store traffic (improve store traffic by XX percent)
- Product sales or revenue generation (number of units sold, average shopping cart value, etc.)
- Website or store sales conversion rates
- Profit margins
When I define program objectives, I like to use the “SMARTER” method. It’s a basic, common approach that helps remove ambiguity. Here’s a link to a longer explanation on Wikipedia, but I’ll offer a quick overview of how it works:
- Specific: Define exactly what is expected from a program. Do you want to increase unit sales of a product or increase foot traffic to your store?
- Measurable: What are the concrete criteria that will determine whether you successfully meet your objectives? Do you want to sell 500 units or increase store foot traffic by 20 percent?
- Attainable: Assess whether the goal is realistic. If you’ve sold 100 units per month, on average, then an objective of 500 in a similar period probably isn’t attainable. Challenge yourself, but give your business a chance to succeed.
- Relevant: Will achieving the objective benefit your business? If your product offers high profit margins and helps solidify your business, then this goal is relevant.
- Timely: Set a firm timeframe for achieving this goal. In the above example you might define the target period as one month.
- Evaluate: Evaluate whether you achieved your objectives. If you failed to meet them, then why did that happen and what might you change the next time?
- Re-evaluate: Becoming a skilled marketing strategist takes thought and practice. Don’t be afraid to continually go back and re-evaluate multiple past strategies.
Prioritizing Your Objectives and Goals
When you’ve defined a short list of goals, you should start to prioritize them. What objectives are most important to your business? Those are the goals you’ll want to focus more of your energy on. This is usually a great time to revisit your back-of-the-envelope math. Prioritize the goals that will do the most for your small business.
If you haven’t yet attempted to calculate the business impact of each of your goals, then take the time to do so now. It’s critically important that you understand what will have the most positive impact on your business. If you don’t understand this dynamic, then who else will?
For example, you might take two business objectives — say, an increase in website traffic of 30 percent and an increase of on-site purchase conversion of 10 percent. Each objective involves a different type of investment. Increasing website traffic might require more focus on search engine optimization (SEO), the creation of relevant content and even paid media tactics such as search engine marketing. Increasing on-site purchase conversion, on the other hand, might require you to redesign how products are displayed on your website or to change the e-commerce shopping tool you use.
If you’re like most small businesses, then you may not have time to focus equally on both objectives. Doing some basic math will enable you to approximate which of them will have the biggest impact. If you already have decent traffic, then an increase in on-site purchase conversion may be your best bet. Similarly, increasing conversion won’t do much if your website isn’t attracting many visitors.
Allocating Monetary and Human Resources
Once your objectives are prioritized, it becomes easier to allocate your limited financial and human resources. The first step is calculating the right marketing/advertising budget for your business. There really is no standard method for doing this. Your marketing/advertising budget depends on a variety of factors: your type of business, average gross markup on your products/services, overhead costs (like rent or payroll) and your projected annual revenues. This process may sound complex, but it’s quite easy. Check out Entrepreneur Magazine’s great article on calculating your ad budget.
The final step is determining how much time your business can spend on marketing activities. It helps to have some prior experience, but newcomers shouldn’t be intimidated. There are many opportunities to learn about marketing online. You just have to remember to budget “learning time” into your overall marketing strategy. The more you have to learn, the less time you’ll have to implement your marketing strategy. Over time, this will change and you’ll become more efficient and your business will blossom as a result.