Market your new business


Market your new businessMarketing is about much more than simply promoting your business. Marketing helps you understand your business environment, identify the most promising opportunities and decide how to exploit them.

Effective marketing starts with researching the market and your competition. You can use this to develop a marketing plan that sets out why customers should buy from you and how you can make this happen.

Know your market

SWOT analysis

Sharpen your offer

Your marketing strategy

The marketing plan

Promote your business

Everyday marketing

1. Know your market

Understand your potential customers

  • You need to find the answers to questions such as:
  • How do they choose between the businesses from which they buy?
  • In which quantity do they buy and how do they pay?
  • What do they think about competitors’ products/services?
  • What do they most value in products/services like yours?
  • Which individuals control the budget and make the purchasing decision if your customers are other businesses?
  • What do they think about your product or service - including its price and the benefits it offers them?
  • How can you improve your product and customer service?

Segment your market into groups

  • Aim to identify groups of similar customers, with similar needs and behaviours.
  • Make sure you understand the different requirements and challenges of each market segment. For example, you might need to overcome cultural or language barriers to sell effectively to different ethnic groups or overseas markets.

Identify all of your distribution channels

  • Explore all options open to you when thinking about how to get your product or service to market.
  • Many businesses supply their major customers directly, but find it more cost-effective to supply smaller customers via a distributor or retailer.
  • Clever distribution can be the key to success. For example, by using firms of accountants as its sales and installation partners, accounting software firm Sage grew rapidly from a start-up to sales of more than £500 million.

Assess your competitors and their products and services

  • Researching the competition gives you an idea of what you can do to establish a niche in the market. Research the market thoroughly.
  • Don’t forget indirect competitors. For example, a new restaurant might have to compete with the local cinema as a ‘night out’.
  • Carry out a detailed analysis of your competitors’ strengths and weaknesses. If necessary, test their products or services.
  • Find out about their prices.
  • Identify which customers they serve.
  • Look at the potential they have to improve their services or upgrade their products.

Keep up with market trends

  • The more you know about your business environment, the more you will be able to anticipate change and turn threats into opportunities.
  • Small businesses can often capitalise on change, adjusting quickly before larger competitors react.

2. SWOT analysis

A SWOT analysis helps you think about the strengths and weaknesses your business has, and what the main opportunities and threats are.

Strengths

  • Consider critical success factors, such as customer service, product (or service) performance, price, quality or range.
  • A key strength of many new businesses is their dedication to excellence. This is necessary to build up a good reputation and to achieve word-of-mouth recommendations to other potential customers.
  • Existing personal or business relationships can provide a useful foundation to build from. The key strength of many established businesses is their customer base, because people tend to prefer to buy from people they know.
  • Compare your strengths against those of your competitors. Building or acquiring new strengths - by recruiting appropriately skilled staff, for example - can be a part of your growth strategy.

Weaknesses

  • These could include a limited number of employees, or a lack of funds, customers, knowledge or experience. The fact that you are a new business without a track record could also be seen as a weakness.
  • Finding and selling to new customers is an essential part of growing your business. You may need to overcome a lack of sales skills and confidence.
  • Thinking about your competitors’ strengths might help you to identify some of your weaknesses.
  • Assess your weaknesses honestly and acknowledge these limitations rather than ignore them. With creative thought, you can turn many competitive weaknesses into strengths.
  • For example, many small businesses find it difficult to compete with large companies on price. But the small business can make a virtue of the personal service it can offer and so justify a higher price.

Opportunities

  • For example, selling your goods or services online or to overseas markets, or selling through a business that can reach your target customers.
  • When your business is established, opportunities can arise when your competitors experience difficulties or when market trends shift.
  • Thinking about your competitors’ weaknesses might help you to identify possible business opportunities.

Threats

  • Threats to your business can include the emergence of a new competitor, a competitor introducing a new product or over-reliance on one supplier.

3. Sharpen your offer

Realise the benefits you offer customers

  • To understand your product’s key selling points, put yourself in the shoes of each customer. Why will they buy your product?
  • Don’t confuse features with benefits. Features are worthless unless they provide the consumer with benefits. These are what you need to focus on when thinking about your offer.
  • For example, Teflon coating is a feature of many frying pans. The benefit is that food does not stick to the frying pan, which is easier to clean as a result.

Identify your unique selling proposition (USP)

  • Your USP is the thing that set you apart from competitors. You can have more than one.
  • To help you to identify your USP, ask yourself: “Why would anyone buy from my business instead of my competitors?”
  • Aim for a USP where you can claim uniqueness: “My business is the only ...” Most businesses claim to offer high-quality products or services backed by fast and reliable service. This does not provide the basis for a USP.
  • Offering the lowest price can be a USP but it is dangerous to rely on this. Your established competitors may have deeper pockets and start a price war.

Be ready to establish your credibility, instantly

  • Measurement is a powerful differentiator. For example, saying “I redesigned a client’s website and visitor numbers rose by 50% in six months” sounds compelling. Merely saying that visitor numbers rose is not as convincing.
  • Being able to show a track record can be vital. Aim to get some high-profile names on your customer list as quickly as possible, even if you have to cut your profit margins right back to achieve this.
  • Good sales and marketing material (‘collateral’) can help to turn an enquiry into a sale. For example, a high-quality brochure and your website. Include customer testimonials and case studies that illustrate the benefits of your product.

Start with a narrow focus

  • Find gaps where you can become a market leader. Look for niches in the market where, as a specialist, you can offer a superior product. Small businesses succeed by becoming leaders in niche markets.
  • Think in terms of ‘stepping stones’. Unless you have an exceptionally strong offer, a start-up business should seek to establish itself in niches with little competition. The more lucrative a market niche is, the fiercer the competition will be.
  • Small businesses can exploit niches and fragmented markets where large companies cannot make a profit.
  • Once you have a track record and a customer base you can target more profitable niches.

4. Your marketing strategy

Decide which customers to target

  • Identify the most promising market segments (see Know your market).
  • Prioritise marketing to customers that are most likely to give you major revenue streams in the future. In most businesses, 20% of customers account for 80% of revenue.

Decide which products you should push

  • These are the ones most likely to prove popular, or those with the highest profit margins.

Choose your distribution channels

  • If you are selling direct, options include personal selling, mail order or a website. You can sell indirectly through wholesalers, retailers or agents.

Establish your pricing

  • You may want to revise your prices as a result of your competitor analysis. Don't be afraid to do this - but don't slash prices just because you can see a niche in the market at that price point.
  • As well as determining your profit margins, pricing can have a strong influence on customers’ perception of your quality.
  • Strong marketing can overcome customers’ objections over price.

Decide who will sell, how

  • Any marketing strategy is useless without an effective sales capability to back it up. Make sure you and any staff know everything your customer would want to know about your business - and how to communicate it effectively.

Plan your promotions

5. The marketing plan

Draw up a marketing action plan

  • This should detail exactly what you are going to do and the results you expect to achieve. It acts as a benchmark against which you can measure success.

Be realistic about your resources

  • Your cash flow might mean that there is no money to spend on marketing during certain months.
  • A lack of staff might mean that you can only handle a small flow of sales leads.

Set realistic targets to measure your performance against

  • What sales do you expect in your first 12 months for each customer or each type of customer?
  • What sales do you expect from each type of product or service?
  • What sales growth should you aim for?
  • How much should you spend on marketing, month by month?

Measure results

  • Make sure you can track the effectiveness of different campaigns. Ask every new contact how and where they heard of your business.
  • Calculate success (‘conversion’) rates, tracking both leads and orders you receive as a result.
  • Compare the cost of acquiring each new customer with how much revenue it brought you and how much revenue it is likely to bring you in the future.
  • Investigate missed targets. Has something gone wrong, or have circumstances changed? What can you do about it?

Continuously review and improve your marketing

  • Learn which methods and strategies brought you the most valuable custom and aim to replicate these in the future. Avoid methods and strategies that did not work.
  • Remain open to new ways to market your business (eg you might choose to add an online marketing dimension to an existing campaign).

Avoid common mistakes

Aim for customers you have a good chance of selling to

  • For example, a printing start-up can get business from smaller local firms but is unlikely to get the entire print contract for a multinational company.

Make it easy for customers to understand what you do

  • For example, don't call your company A2B - call it A2B Delivery Services.

Offer your customers what they want - not what you think they want

  • Ensure your research has proved there is a gap for your product and service - and check that is the gap you are filling.

Make sure your message reaches the right people

  • For example, only advertise in publications you know your target customers read.

Avoid over-ambitious growth targets

  • Set realistic targets. Cautious planning ensures your business will survive; exceeding realistic targets is a bonus.

Remember the market is always changing

  • If you conducted your research a year ago, the competition may have changed. Keep up to date with who is doing what.

6. Promote your business

Formulate your key messages

  • Combine your key business strengths, USP(s) and the benefits your products or services provide to customers. These are the key messages you need to convey when promoting your business.
  • Think about how you want potential customers to contact you. You might want to refer them to your website to find out more, saving you from having to cope with a deluge of telephone calls. Alternatively, you might want people to telephone or email your business directly.
  • Consider how you will manage responses from any marketing or advertising campaign you launch.

Consider different options

Think about how you are most likely to get your key messages across to potential customers. These include:

  • advertising and PR;
  • direct mail and email marketing;
  • exhibitions;
  • online marketing (eg through your own website and using social media);
  • free options (eg making sure that your business appears in free-entry directories).

Check how your competitors promote themselves

  • If none of them advertises in magazines perhaps this is because it doesn’t achieve the desired effect. If they regularly advertise in a particular newspaper maybe this does work.
  • Do they rely heavily on direct marketing or online methods? Have you seen stories about them in the press?
  • Don’t simply copy your competitors’ strategy. It might not be working. Always find out more and focus on meeting your business objectives.

Learn from others

  • Speak to other business owners and managers to find out which marketing and advertising methods have proved most successful for them.

Test what works

  • For example, you might send different versions of your mailshot to small numbers of targets to find out which messages work best, before sending out the best one on a large scale.

Consider using a marketing or PR consultant

  • This enables you to save yourself time and effort, as well as capitalise on their knowledge, experience and contacts.
  • You need to weigh the cost against likely returns. Consultants can be expensive.

7. Everyday marketing

Make sure that you are self-marketing

  • The more people that you talk to about your business, the more sales you could generate. Look for opportunities to network.

Use every customer interaction as a chance to impress

  • You and your staff are the company as far as the customer is concerned. Every detail counts, such as answering the phone quickly and professionally.
  • The more enthusiastic you are about your business, the more enthusiastic others will be. If customers trust and like you - and if they get real benefits from doing business with you - they will recommend you to others.
  • Personal recommendations are the best form of marketing for any business, with no costs involved and extremely high rates of conversion into sales.

Think about the image you want to portray

  • If you offer the cheapest delivery service in town, then using a rusty old van might be fine. But if you want a reputation for reliability and professionalism, having a clean new van and a uniformed driver will help.
  • If you are advertising or sending out promotional material, keep it consistent with your customers’ requirements and the image that you wish to portray.

Retain customers

  • For most businesses, selling to an existing customer costs much less than attracting sales from new customers. Think about after-sales service, making sure you stay in regular contact, and options like volume discounts or loyalty schemes.

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