Once you have identified your customers, done some detective work to check out your main competitors and positioned yourself relative to them, thus claiming a niche for your company, you are ready to devise a marketing plan for your business venture.
The marketing plan supplies the road map that you will use to reach the target customers. Sales strategy, pricing, product or service positioning, advertising and distribution channels must all be accounted for in relation to what target customers will accept. The idea is to convince customers that buying your services or products will give them benefits that are worth the cost.
Describe how your products or services offer more advantages to the customer than what is offered by competitors. What’s the hook that will bring customers to your door?
Research the product features and attributes that are important to target customers and what they are willing to pay for them. Dig a little deeper and brainstorm the benefits—those unspoken and often emotional motivators that will drive customers to buy from or hire you.
What is the challenge or need that customers face, what is the “pain” that they’re in? Your company must provide solutions that customers determine to be useful. Think about what customers might value in the long run, but remember that tastes and perceived needs are fluid and therefore subject to change
Pricing is a tricky issue, especially for consultants and professional service providers. It may be difficult to find out what competitors charge, so there is no framework for comparison.
If you have relationships with those who hire for similar services, inquire as to what they pay so that you can set your price points. Competitors are unlikely to help you with pricing, but colleagues who offer similar services may give some guidance. If you plan to sell a tangible product, canvass the marketplace and learn how similarly positioned products are priced.
Be advised that it is risky to underprice. In general, it is not a great way to rapidly build a client list or gain market share. In services especially, clients may wonder why your rate is so cheap—are you unqualified? You don’t want to give the impression that you’re less than first rate. Moreover, raising prices in the future may be met with customer resistance.
Underpricing will also negatively impact your cash flow. You could find yourself spinning your wheels like mad, overwhelmed with lots of orders, but losing money overall because you have not fully accounted for the cost of goods sold, be it product production and marketing costs or the time and creative energy it costs you to fulfill a contract assignment.
Unless you’re in the grocery business, where profit margins are traditionally thin, make sure that your pricing strategy builds in a profit margin that will sustain the business and eventually you too.
Think about how your products or services will flow from their source and reach the target customers. Examine how customers currently buy your type of product.
Do they buy primarily online, from catalogues, from a physical location, by referrals from trusted sources, by contract bids or at trade shows? Can you access the preferred distribution channel? How much will it cost you?
Service providers and Freelance consultants must also develop a distribution strategy, so that potential clients and referral sources can be reached. If you work in professional services, you are on the coattails of the firm’s marketing efforts. However, these days even junior associates are expected to bring in clients.
Networking and other relationship building strategies will be helpful here. Put yourself in the places where clients and good referral sources can be found. Work an expert elevator pitch and see who you can meet. Visibility counts, so speaking opportunities and leadership roles in business groups will also be important for self promotion.
I’ll be back with Part II of Marketing Strategies next week,