Developing a marketing strategy isn’t a one-time effort. As you’ve likely seen, staying connected with your audience requires regular updates to reflect shifts in the economy, the competitive landscape, and changing customer expectations.
Here’s a high-level overview of how to refine your strategy and ensure it continues to deliver results.
Refine target selection
Consider each prospect, existing customer and target group as an investment. Estimate your net profit after subtracting production, sales and customer service costs.
More desirable customers will buy in sizable volumes with enough frequency to provide a steady income stream over time rather than serve as one-time or infrequent buyers. They’ll also be potential targets for cross-selling other products or services to generate incremental revenue.
Bear in mind that you must have the operational capacity to fulfill a prospect’s demand. If not, you’ll need to expand your operations to take on that customer, which will cost you more in resources and capital.
Also, be wary of becoming too dependent on a few large customers. They can use this status as leverage to lowball you. Or, if they decide to pull the plug, it could be financially devastating.
Adjust price points
Your price points are another key factor. It’s a tricky balance: Setting prices low may help attract customers, but it can also minimize or even eliminate your profit margin.
In addition, think about what payment terms you’re prepared to offer. Sluggish accounts receivable can strain cash flow. Establishing a timely payment schedule with customers is critical to sustaining operations and supporting the bottom line.
If you must spend a substantial amount of cash to set up a new customer, such as buying new equipment, consider offering initial pricing that includes a surcharge for a specified period. After you’ve recovered the cost of the equipment plus carrying charges, you might offer the customer a volume- or loyalty-based discount.
Craft your messaging
When you know who you want to sell to and what you’re going to charge, it’s time to craft your messaging. This is obviously the key step — literally marketing your products or services. So, clarity and consistency are key.
Begin by identifying your core value proposition. This is what sets your business apart from competitors. Communicate it in simple, direct language. Generally, you want to avoid jargon unless you’re working in a very specific context where industry terminology or technical knowledge is critical to sales. Be persuasive by providing remedies for your audience’s pain points.
You may need to tailor messaging to different market segments. For example, established customers usually respond best to a marketing message that reminds them of your company’s reliability and the total value of your mutually beneficial relationship. Meanwhile, prospects and newer customers probably need more persuasion and “proof of value.” Carefully choose the right marketing channels as well. These may include print, email, social media and in-person outreach.
Finally, watch out for inconsistency. Even if you vary your exact wording when addressing different market segments, your overall messaging needs to be uniform in look, tone and details. Disjointed communication — especially when it comes to things like pricing and product or service specifications — can sink a marketing strategy fast.
Today and tomorrow
An ineffective marketing strategy can quietly drain your business, leading to fewer and lower-quality sales leads while your competitors gain more attention in the marketplace. Conversely, a strong and timely marketing strategy can be a real revenue driver. At Rudler, we can help analyze your marketing costs, as well as your price points, and help you develop a viable strategy for today and tomorrow. Contact your Rudler, PSC advisor at 859-331-1717 today!
RUDLER, PSC CPAs and Business Advisors
This week's Rudler Review is presented by Austin Alwell, CPA and Heather Davis, CPA.
If you would like to discuss your particular situation, contact Austin or Heather at 859-331-1717.
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