How to Use Marketing to Add Value to Your Company
By Robyn M. Sachs
President, RMR & Associates, Inc.
Windows of opportunity are fleeting. Once-in-a-lifetime opportunities are even more elusive. When InSoft challenged AT&T for a bite of the desktop video conferencing market, effective marketing had not only positioned InSoft products as industry leaders, it had positioned the company as a leader.
Thanks to product and corporate positioning campaigns conducted by RMR & Associates, InSoft garnered press coverage in the Wall Street Journal, Forbes, and other premier media outlets, gaining the attention of Web browser giant Netscape. After the dust settled, Netscape had purchased the $7 million InSoft for 23 times earnings — an astounding $161 million.
Such serendipitous financial gain doesn’t happen every day, but when it does, you can bet effective marketing played a key role, as it did with InSoft, preparing them to meet the opportunity.
RMR defines marketing as the business of attracting, converting and keeping customers. When people think about marketing they automatically imagine advertising, public relations or direct mail. But all of that is not marketing — it’s merely the vehicles we use to drive home the marketing. Marketing is a strategy.
Marketing is actually a strategy spelled out in a written plan – a plan that you are committed to consistently investing in for at least one year. You need to look at your program as an investment that pays off over time. After a year you will start to see a positive correlation between your commitment and your investment. You must remember “the rule of seven” when developing a marketing strategy. This rule says that it takes seven consistent impressions over 12 months for consumers to recognize your message. Frequency over time is the equation that multiplies marketing results. Commitment to investing in both is what separates the winners from the losers.
Once committed to creating a year-long marketing plan, make sure you cover the following key points:
- Market segment of interest. Is your market the general consumer? Is it a business or industry that serves the consumer? What portion of the product line are you going after? What is your niche?
- Market segment’s size and customer population. Who are your potential buyers? How many of them are there? If they are actual consumers, identify them in terms of age, sex, income, geography, ethnicity and as many other demographic segments as possible. If your market is a business or industry that serves consumers, identify them in terms of company size, geography, share of market, reputation, etc.
- Identify important competitors and discover their strengths and weaknesses. Who are your main competitors? Prioritize them. Research their strengths and weaknesses by reading industry publications, visiting their Web sites, following newsgroup postings, utilizing mystery shoppers, talking to former employees or conducting focus groups with competitors’ current customers.
- Establish a market share goal that will provide a commanding position. You want a commanding position because you are better off being a big fish in a small pond, than trying to be a small fish in a big pond. Big mistakes are seen every day in marketing plans by people trying to bite off a larger segment than they can afford to dominate.
- Describe how the product will be differentiated, positioned, promoted, priced, supported and serviced. Your marketing communications agency can help you establish many of these aspects that will become the key selling points of your marketing message.
- Estimate your costs and establish a budget. Remember, properly done, your marketing plan will be an investment that pays off far more than the expense of your budget. It is far better to have a lean 10 to 20 page marketing plan that is used and updated every three months, than to possess a 200 page document that gathers dust on some shelf.
- Sell the steak’s sizzle. If you don’t get your marketing plan right, anything that marketing communications does later will be like placing a Band-Aid on a puncture wound. It just won’t help. Marketing communications is the end product of a well thought-out plan based on a well defined market need, in a well defined high tech market segment
When writing a marketing plan for a high tech company, remember that high tech has a significantly higher FUD factor (Fear, Uncertainty and Doubt) than consumer marketing.
People are not going to agonize over buying a tube of toothpaste or a different brand of diapers. But they will agonize over buying technology.
High tech marketing can really help with the FUD Factor by offering a combination of comfort, stability and confidence. High tech marketing also helps with positioning in the public’s mind.
Positioning starts with the product (quick, name a round, hard candy with a hole in it), moves to the market (quick, name the car rental company who is #2 and tries harder) and finally, to corporate positioning (quick, name the leading manufacturer of PC microprocessors).
Typically, your marketing plan will call for positioning in this order of product, market, corporate. But if the market is hot, you can sometimes skip steps getting to corporate positioning faster — the place that can lead to acquisitions, public stock offerings and increased investment capital.
Once happy with your marketing plan, you’re ready to develop your marketing communications strategy.
How will you present your message to your prospects? Consider these key points:
- Define where you are today. Quantify your current market share and reputation.
- Define where you are trying to go. Establish your goals in terms of market share and reputation.
- Define how you can best get there. Identify the sales vehicles that best get you to where you want to be. These might include combinations of advertising, public relations, direct mail, Internet, tradeshows or telemarketing.
- Define what it will cost. Remember that frequency over time equals results. The rule of seven reminds us not to ever run just one ad to “test the waters.” Your budget should be large enough to allow for frequency (at least seven impressions) over time.
- Define how you will measure success. A good marketing communications agency will insist on measuring results, so it can prove its value. You can measure image, awareness, number of qualified sales leads,article placements, benchmark studies and sales stats.
What marketing communications should do for you, if it’s done right, is funnel out your best leads. This has been seen time and time again.
If you begin to use higher reach vehicles like the Internet, advertising and public relations, you will get more and higher quality leads that will literally lower your cost of selling.
Once the marketing plan has been written, it is important to evaluate the program at least once a year. In particularly volatile markets, evaluation may need to be done even more frequently. Markets are not stagnant, so effective marketing plans cannot afford to be either.
By using these tools and keeping yourself informed about the markets you are in, as well as the markets you would like to play in, you can add value to your company and help build image and awareness and ensure that you too are positioned to take advantage of opportunities.