Posts Tagged strategy
Small Business Pricing Strategy: Adjusting Your Price Points
Posted by Patrick Woods in General Marketing on
photo by D3 San Francisco
As a small business owner, how often do you assess and adjust the price points of your product or service? Do you wait until someone complains about the competition’s lower prices? Or have you just maintained the same prices you set when you first started your small business?
If you’re a Starbuck’s drinker, you may have noticed a recent change in price of most of their menu items. Jay H. Heyman provides some interesting analysis of the adjustment, pointing out that basic coffee shop offerings, like a cup of drip coffee, will likely drop in price (and it has at my local shop), while premium items, like the various versions of the Frappuccino, will see a price increase.
Why? Because consumers expect premium products from Starbuck’s and will (hopefully) be willing to pay the extra few cents. Instant growth of profit margin.
So in light of your small business’ product and service offering, does your pricing strategy fit your customers’ holistic perception of your brand? Are you undercharging because you’re afraid of alienating your customers or clients? Are there other strategic adjustments you can make to increase your profit margin without alienating customers?
Take some time to think strategically about your pricing strategy and your efforts will literally pay off.
Small Business Branding: Perceptual Mapping and Your Product’s Position
Posted by Patrick Woods in General Marketing on
Do you know how your target audience views your small business’ product or service? Do you know where you stand in relation to your competition? Affirmative answers to these questions are integral to our small business marketing plan.
One method for helping you examine your small business’ position in your market is to complete a perceptual map that compares the target audience’s perception of the various competitors in your space.
Why is a perceptual map helpful?
- Enables comparison between your position and that of your competitors
- Provides an overview of the competitive landscape in your market
- Reveals overcrowded spaces as well as potential opportunities
- Provide direction for developing the positioning of a new product or service launch
How to create a perceptual map for your small business marketing plan
- List all the competitors in your market along with their position statement
- i.e. Lowest prices in town; best bang for your buck; only the finest luxury
- List our own position statement
- Determine the two axes of comparison
- Most often, positioning statements consider 2 factors: quality and price
- Comparing the position statements of your competitors will reveal the two most important factors
- Plot yourself and your competitors along the two axes
- Confirm your results
- Ask friends and family to have a look at the chart
- Create a survey for customers and clients to complete
- Remember, the perceptual map is somewhat subjective, so your self-perception may differ from that of your customers
- Apply the findings
- How does your brand relate to the wider competitive landscape?
- Is your small business taking advantage of open spaces on the map?
- If your brand falls in line with the pack, are you finding ways to differentiate yourself?
An example of how to do a perceptual map
Example of a Perceptual Map
Let’s say you’ve done some research and uncovered a need for a higher-quality dry cleaner in your town. You’ve talked to many people who are unsatisfied with the existing options, but you aren’t sure why. To help you understand the competitive landscape, you decide to complete a perceptual map.
First, you list all the dry cleaners in town along with what you know and have heard of them. You may even call them and ask, as a potential customer, why you should choose them over the competition.
You find out the two main factors are quality and price, so you plot them along those two axes.
In light of the example, you see that most cleaners in town are perceived as low-cost budget options that compete primarily on price alone. There is only one shop with a position of high quality. It appears that there is room to create a position of high value, of great bang-for-the-buck.
So you decide to found Value Dryclean as the affordable alternative to those overpriced guys, but with higher attention to detail than the budget crowd.
In this way, perceptual mapping helps the small business owner formulate the foundation for a solid small business marketing plan.
Are your marketing objectives SMART?
Posted by Patrick Woods in General Marketing on
Photo by fotographix.ca
As I mentioned in a previous post, understanding the difference between goals and objectives can help clarify your marketing planning processes.
Remember that objectives are specific and concrete, as opposed to goals, which are somewhat abstract and difficult to quantify.
When you’re setting your small business’ marketing objectives, there are five categories that will help your planning stay focused. They’re called SMART, and the system was first put forth by Peter Drucker in his classic volume The Practice of Management.
When creating your marketing plan, your objectives should be:
- Specific – Is the objective clearly defined? Will key players grasp it easily?
- Measurable – Can you track progress? Do you know when you’ve reached it?
- Attainable – Is this a realistic objective? Is it within the project’s scope?
- Relevant – Does it contribute to attaining the goal?
- Time-bound – Have you set a deadline?
Note that there are alternatives for a few of these letters, but I think those listed above offer the most well-rounded and relevant approach.
Examples of SMART Objectives
- To increase our average ticket by 10% by January 1, 2010.
- To grow our email database to 350,000 by the end of the second quarter 2010.
- To achieve 70% client awareness within our target market over the 12 months.
- To average 6 homes sold per month by the end of 2009.
While the Attainable and Relevant points will vary depending on various factors, these examples should give you a decent idea of what a SMART objective looks like.
SMARTER Objectives
Some have added another two points to the SMART planning system:
- Evaluate
- Revaluate
Any successful marketing plan will have budget and timeline allocations for evaluating the plan’s success. Build these mechanisms in from the beginning to ensure your small business’ marketing plan meets its goals every time.
What’s the Difference Between Goals, Objectives, Strategy, and Tactics?
Posted by Patrick Woods in General Marketing on
The distinction between these marketing foundations comes up often in discussions with small business owners. Many people like to start with a tactic, like “we’ll do some email marketing,” and call it a strategy with no connection to the overall marketing goals.
So what are the differences between goals, objectives, strategies, and tactics?
- Goals: high-level planning targets that your marketing plan will achieve. Usually somewhat abstract and unmeasurable.
- Objectives: the measurable results that combine to achieve a goal. These are concrete and trackable and have a timeline associate with it.
- Strategy: the broad plan to fulfill and objective. Like goals, these are more abstract than tactics.
- Tactics: actionable tasks to support the strategy. Concrete things you can “do.”
Click for larger view
What does this process look like for your small business marketing plans? Here’s an example:
- Goal: to become the market leader in water hose sales by the end of the year
- Objectives
- Increase brand awareness among target audience members by 20% by the end of the fourth quarter
- Increase sales by 5% each quarter until the end of the year
- Strategies
- Use print advertising to increase brand awareness
- Use seasonal pricing promotions to boost sales
- Tactics
- Advertise in distributor’s Sunday inserts (e.g. Home Depot) each week through the fourth quarter
- Place half-page ads in Gardening and Home Improvement magazines every other month
- 2-for-1 pricing promotion during summer (June–August)
- 10% off special during autumn (September–October)
So you can see the progression from abstract and somewhat long-term down to the executable tasks what happens where and when.
Once you have a clear vision in mind for the direction of your small business, you can plan through the necessary steps to bring about the realization of your vision.
Does Your Small Business Have a Content Marketing Strategy?
Posted by Patrick Woods in General Marketing on
Photo by Muffet
In a previous post we discussed the importance of content marketing for positioning yourself as a thought leader in your industry.
As with any marketing method, you must implement a sound strategy to maintain and measure growth for your small business. Joe Pulizzi at Junta42 has outlined a strategy for content marketing called B.E.S.T. This insightful post breaks down each facet of this strategy, including:
- Behavioral
- Essential
- Strategic
- Targeted
Planning along these lines will help you strategically build a content marketing plan for your small business and ensure you stay focused on efforts that will impact your target audience.
Small Business Website Planning: Site or Strategy?
Posted by Patrick Woods in Interactive on
Photo by James Cridland
Increasing numbers of shoppers begin the research stage of the buying process by searching the web for info on the product a service that will meet their needs. In and effort to stay current, many small business owners I’ve worked with will post an unattractive, poorly planned website so they’ll have a URL to put on their business card. The end result, though, often poorly represents the small business’ brand and actually does more harm than god.
Now, the title of this post assumes your small business does, in fact, have a website. If you don’t have a website for your small business, this is a great place to start thinking about one. If your site is already live, use these points to diagnose what you already have.
What is the purpose of your small business’ website?
- How does it fit into your overall marketing strategy?
- Is it for lead generation?
- Is it used for direct selling?
- Is it used to raise brand awareness?
- Is it used for interacting with customers?
What do you want the website visitor to do?
- Download your white paper or request a demo (lead generation)?
- Buy a product (direct selling)?
- Join your mailing list, visit your social media property, or watch a video (brand awareness)?
- Comment in your forum or on your blog post (interacting with customers)?
Who will visit your website?
- What do you know about your target audience?
- Are they experienced web surfers (e.g. teens; young adults)?
- Or are they new to the web (e.g. senior citizens)?
- Are they new to the site or are they repeat visitors?
What are your technical requirements?
- Will you need a shopping cart?
- Database interactivity (i.e. forums, blogs, mailing lists)?
- Will you need video or Flash support?
- Is your content in a single languages, or multiple languages?
This website planning checklist for your small business is by no means exhaustive, but it’s a good starting point to help you begin thinking strategically about your website.
Small Business Marketing Mix: Price
Posted by Patrick Woods in General Marketing on
When small business owners think about marketing, their ideas are often limited to promotion and advertising only. But marketing involves other activities, such as distribution, your product or service, and price. What kinds of things make up the pricing facet of the marketing mix for a small business?
- Volume discounts and wholesale pricing
- Suggested retail price
- Early payment and cash discounts
- Seasonal and holiday pricing promotion
- Bundling
Some small businesses have only one pricing strategy: set your price lower than everyone else. But is this always the best approach?
Before making any pricing strategy decisions, conduct a competitive analysis of other large and small businesses in your space. Who’s the low-cost leader? Who is the expensive-but-worth-it company? How does your brand fit within the competitive matrix?
Once you understand the playing field, you can adjust your tactics accordingly. A price war is never good for for any industry, so you’ll want to consider ways of adding value the product or service offering of your small business. What are the standard services for each price point, and how can you add low-cost but high-value items to each package?
Another way to strengthen the pricing strategy of your small business marketing plan is to become the exclusive vendor of a specialty product or service. If you’re the only business in your market offering underwater plumbing services, you’ll never have worry about competing on price.
Examining Your Small Business Marketing Mix: The 4 Ps of Marketing
Posted by Patrick Woods in General Marketing on
Pop quiz time! This quiz has a single question, but your response will reveal much about your ability to market your product or service. The one question is this: how do you define marketing?
The intention behind this question is an underlying misunderstanding of what marketing actually is. I can’t count how many small business owners have told me about “doing some marketing,” but when asked about their strategy, they tell me something like “well, we printed some new brochures.” Another company I worked with once got excited about “revving up their marketing efforts.” The efforts? A newspaper ad. I kid you not.
Is that all there is to marketing? A new ad? While advertising can be an important part of your marketing plan, it’s only one part of the larger plan. When planning your small business marketing efforts, it’s helpful to think in terms of the overall marketing mix, also known as the 4 Ps:
- Product – brand name, packaging, features
- Price – discounts, bundling, wholesale vs. retail
- Place – distribution, inventory control, warehousing
- Promotion – advertising, selling approaches, PR
When you begin to think strategically in light of these 4 areas, you’ll start to grasp a more holistic understanding of your small business’s product or service.
