Are You Using a Zero-Based Marketing Communications Strategy?

Advertising EffectivenessDesigning hard-working marketing programs is not a simple “black and white” situation. There are numerous choices, many different methods and no single optimal combination exists.

It is, in effect, a collection of ideas, approaches and options that change continually to meet changing needs, new marketing opportunities and growing competitive challenges.

There are, however, strategies to help make marketing efforts more cost-effective. These include coordinating your marketing with your direct selling, developing a zero-base budget and establishing clear, measurable objectives for every dollar spent.

THE MARKETING BUDGETING PROBLEM

“I know that half my advertising dollars are wasted, but I don’t know which half”

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Sound familiar?

For decades, companies have tried to make their marketing dollars work harder. They have used concepts such as target marketing, niche marketing and positioning to help build sales by generating leads, reaching decision-makers and even asking for the order. But a problem remains: marketing and sales have never been completely coordinated.

The result is that money is allocated to advertising because everyone knows advertising is necessary. And sales people are told go out and sell because most B2B products and services are sold that way.

This approach has worked in the past, but the changing business climate will continue to force companies to re-evaluate the entire process. To borrow a buzz-phrase, tomorrow’s marketing will have to work − not harder − but smarter.

AN OPPORTUNITY

Consider your marketing spend in terms of its contribution to profits…instead of just cost of sales

Are You Pricing For Volume or Profit?Instead of basing the marketing communications budget on projected sales, the sales requirements can be used to establish a zero-based project approach.

In this way, the actual point when the sale is closed determines what materials and how much should be spent to make the direct selling effort as cost-effective as possible.

A DIFFERENT BUDGETING APPROACH

The first step is to establish a benchmark for both the cost-per-call and cost-per-sale

Cost Effectiveness of Direct Selling Worksheet

Using the chart, determine the total cost for your entire sales force, and then the average cost-per-call and cost-per-sale. (At this stage, do not factor out individual salespeople).

The resulting numbers are a measure of your current marketing efficiency, arid will serve as a gauge of the cost-effectiveness of your total future program.

Next, using the chart below, break out your new accounts and those you have had for at least one re-order. Depending upon market factors, you may also want to break out the accounts by region, season, or some other criterion.

What you are measuring here is the cost-effectiveness of your existing direct-selling effort, looking for the types of accounts which are most profitable and those which are least profitable.

Cost Breakdown by Account TypeAs a general rule, your marketing depends upon the profitability level of each category. Those categories where direct selling is very profitable should have programs designed to support the sales person, helping to either increase the dollar volume per account, or lower the average cost-per-sale.

Those categories where the profitability level is low should have programs designed to replace the sales person as much as possible.  This can be accomplished effectively with programs such as automated marketing to lower the cost of pre-qualification inquiry fulfillment.

Once you have determined the cost-per-sale for each category, you should establish sales objectives. The first is to maximize a sales person’s productivity, and to do that requires establishing the prime job function:

  • Developing new business leads
  • Making presentations
  • Maintaining face-to–face contact at existing accounts
  • Trouble-shooting problem accounts

Do You Have A Customer Engagement Strategy?Obviously, some or all of these functions could be present in all categories, but by assigning the sales person a prime function, you are taking the first step in determining:

  1. The type of program (support vs. replacement) that will result in a lower overall cost-per-sale
  2. The message that each component in the program should carry
  3. The amount to be spent to deliver the message(s)

Given this information, you are now in a position to correlate all your advertising, promotion and direct selling expenses to sales.

Program effectiveness can now be tracked. And you can begin to consider your marketing spend in terms of its contribution to profits…instead of just cost of sales.

Good Selling!

9 Simple Principles To Avoid Badvertising

How to avoid badvertisingBadvertising, or bad advertising, is all too common. Companies know they should be advertising to get their brand or product in front of potential buyers, but too often they miss the mark.

Sometimes it’s an effort to cram too much into one ad (I explore this problem in my post 5 Simple Tips for Creating More Effective Advertising). Other times it’s just creativity run amok.

“This is going to go viral” must be in someone’s head. Perhaps it does, but only by bloggers who watch for examples of badvertising. (Yes, they are out there. Let me know of your site if you’re one of them.)

Follow these simple principles to avoid bad advertising.

1.    Don’t pay to talk to yourself.

Media costs real dollars. Don’t waste them patting yourself on the back. Your prospects aren’t sitting around waiting to hear, act or believe anything your company has to say – especially if you’re busy talking about yourself.

2.    “You can’t bore people into buying your products.” – David Ogilvy

Why pay to blend in? Campaigns based on “quality” and “service” as well as other cliche ideas are guaranteed not stand out from the babble of the marketplace. Challenge yourself by translating USP’s in a new and interesting way.

3.    Don’t target your audience.

To comprehend this you must understand the “missing moose theory.” Come September 1st, the first day of moose hunting season, Tom Bodett doesn’t see any moose in Homer, Alaska. It’s because their being targeted. In other words, don’t target your audience or they’ll run, too.

4.    Don’t talk out of both sides of your media at one.

Establish a brand personality and stick with it.

5.    Don’t promise the moon, unless you’re NASA.

People know hype when they see it, and it turns them off. The best ads are about real situations with real benefits being addressed.

6.    Acknowledge that nobody roots for Goliath.

Nobody cares if you’re number one if your product doesn’t benefit them. So don’t flaunt you market position, even if you are number one.

7.    Eat jumbo shrimp.

There are no rules in advertising. Ads that break out of the norm are winners.

8.    Swing for the fences.

Nobody remembers Babe Ruth as the “Strike-Out King.”

9.    Fail.

Don’t be afraid to miss once-in-a-while.

Great advertising communicates powerfully. Badvertising is shouting for attention.

Avoiding badvertisingUltimately, you want to create advertising that will do one of these three things:

  • Build your brand
  • Generate leads
  • Drive sales

The temptation is to have it do all three.

Work to make your advertising meaningful by telling your story in an engaging and relevant way that will activate a relationship to create a customer (hopefully for life). The provide a simple, clear call to action.

Do you have other ways to avoid badvertising?  One of my favorites is this post from Miriam Hara in her Hoop!a blog: Bad Advertising: It’s Not In The Brief.

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Is the Perfect Product Enough to Make the Sale?

marketing and sales work togetherTougher competition and more demanding customers require a sales and marketing synergy unheard of in the past.  These two entities can no longer work apart.

Both groups must work together using all tactics available to make sure they are working towards the same customer focus goals.

Marketing and sales must understand the customer’s business as though it were its own.  The aligned organization develops long-term relationships that look more like teams than vendor customer relationships.

Marketing helps differentiate your business by understanding your customer’s business better

Sales+Marketing=GrowthMost sales organizations are finding out there is nothing new under the sun in terms of products and promotional campaigns.  Now companies must differentiate based on their ability to understand their customer’s business.

Marketing has the tools to acquire the strategic information essential to understanding customer’s needs; such as providing detailed shopper information and insights through POS and shopper analysis.

A typical example − a new product is designed and presented by marketing to sales in a product brochure, sales person is trained to present the product to the customer highlighting its features.  The problem is, the perfect product isn’t enough.

Address the problems and the business of your customers

Sales-and-Marketing AlignementOrganizations need to address the problems and the business of their customers.  Next, you need to bring value to your customer that goes beyond product offerings, leveraging technology, data and content for the following:

  • Faster communication between departments
  • Instant access to information − using the web and intranet sites or flash drives that contain the entire company’s literature on your company’s products, market statistics, profiles, case studies and other information
  • Help make more effective presentations tailored to your customers
  • Creating videoes to deliver rich content like product training, torture testing, plant tours, testimonials, etc. to educate your cusotmer and teams
  • Providing responsive customer analysis

Provide a framework for marketing and sales to work together based on a common goal

Sales and Marketing TeamworkYou need to develop integrated teams that combine people from sales, marketing, technical support and customer service to develop innovative programs.  This structure promotes communication between all parties and results in promotions becoming better organized with greater results.

You have to offer a framework for marketing and sales to work together based on a common goal.  Not the mission of a functional area or business.

Marketing can develop products that might be very popular, but if they can’t be supported by other divisions of the company, particularly the operational divisions, they won’t succeed.  If you segment sales and marketing, you will lose the opportunity to manage projects effectively.

Use this 4 point checklist to put the customer first through sales & marketing alignment

  1. smarketingOnly sales people should be talking to the customer, they have to be the point person.  If the sales reps understand the customer’s needs, this information can be given back to marketing or the strategy team to develop a particular marketing approach.  Clarity of roles is paramount for success.
  2. Develop a joint sales and marketing plan for each account.  Move from selling lots of material to establishing value with a relationship reference and reputation orientation.  Marketing needs to offer essential relationship marketing information through content marketing, rich customer data and insights that allow for consultative selling.  You also have to get the senior business leaders out of their office to help sales people with high level contacts.
  3. Expand marketing’s role to using facts to build customer focused programs.  While marketing must deeply understand the user, it must also be customer focused by tracking, managing information, and providing targeted programs based on data.  It has to move from a one-size-fit-all mentality to developing programs for individual customers. Achieving balance in your focus between the consumer and customer is critical for success.
  4. Marketing needs to build the bridge to the sales department.  In other words, make sales the first customer of your project.  Top management must support this collaboration between marketing and sales.

Putting the customer first gives sales and marketing a common goal.  One which removes the inherent tension that the two functions.  By always returning to the question of “what’s best for the customer,” everyone wins.

Good Selling!