Business Insights

Business Insights

Marketing Theory for Non-Marketers

If you don’t have effective marketing, do you have a business?

How will you ensure growth? Secure leads? Build brand awareness? How will you hold on to your existing customers, or bring new ones through the door? Without a full and joined-up marketing strategy, businesses struggle to make sales – and eventually, to exist altogether.

Marketing strategy is underpinned by marketing theory. Understanding marketing theory helps you, as a business leader, to identify the areas of your marketing that need work. It helps you assess the marketing work your agencies, suppliers and staff are doing, and grasp whether what you’re spending on marketing is worth it. Marketing theory protects your ROI and helps your business survive and thrive.

In this guide we’ll be covering:

  • The customer-first approach
  • The importance of branding
  • Planning your approach
  • Executing your plan

All these components fit together, working with each other to foster marketing success. To understand how it all works, we recommend reading the whole page.

This concept of marketing as a machine underpins our Marketing 360. The 360 is a framework to understand how each element of marketing theory fits into marketing strategy, and a powerful tool for evaluating marketing success.Marketing 360



The customer first approach

Putting your customers first is the basis of effective marketing. It’s where you’ll generate the data that informs your strategy as a whole, and how you ensure the repeat sales that deliver long-term profitability.

Customer service also improves your chances of securing new customers. Good customer service means more customers are likely to recommend you, and that’s powerful - because customers trust each other a lot more than they trust companies. 84% trust online reviews as much as a personal recommendation; 70% will leave a review if they’re asked to; and 90% read between one and ten reviews before forming an opinion about a business.

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Take your time, and get your customer service right. Ask your customers to leave a review - 70% of them will. Acknowledge your bad reviews, but don’t confront angry customers head-on. Invite them into a private dialogue with someone senior enough to make them feel valued, resolve their issue, and then ask them to amend or follow up their review. B2B businesses need to lean into collecting customer feedback and continuous improvement, as their transactions are fewer in number but longer in term, often involving a developed relationship with clients.

Customers can generate a staggering amount of data. Their personal contact details are of course useful for direct marketing, but what you have on record about their buyer's journey, purchase habits and pain points informs you why they’ve done business with you - and what you did to bring them on board. This information should be used to build the essential customer profiles which are the foundation of an effective marketing strategy. Every business should invest in customer profiling as early as possible. You need to know who you’re selling to, and how to reach them before planning any type of marketing campaign.

This is the essence of market segmentation; to identify customers who buy the same things, for the same reason, in the same way, and possibly at the same time. This establishes customers who are most likely to buy, and again, enables campaigns to be targeted at particular segments. In this way, businesses can cut their cost per acquisition by ensuring their marketing materials align closely with their customers’ motivations for purchase.



The importance of branding

Your business has a brand. You might not think it has one, but it does. Customers inevitably build a strong association between your company’s offering and everything else about it: packaging, product and service, advertising, logos, and the impressions made by staff.

There’s also a direct link between branding and profit. Businesses that move to more consistent branding see an average 23% increase in their bottom line. The same report highlights another, more disturbing statistic: only 25% of businesses have formal, enforced branding guidelines.

Manage your brand properly, and a glimpse of your company’s logo will call to mind what you stand for, how you do business, and all the successes you’ve had. That’s brand awareness.

At the heart of every good brand is a clear, consistent set of values. If your travel agency promises “a friendlier way to travel”, your staff need to be friendly, your design needs to be bright and welcoming, and every customer needs to leave the premises feeling like they’ve made a friend - and happened to book a holiday while they were there.

To build a solid brand, first create a vision statement that describes where the business is and where you want it to go. This will engage your employees and help them understand how you want them to treat your customers. You’ll also need a mission statement; a document addressed to customers, telling them exactly what you do and why.Branding

Conduct your business with consistency across every channel and with every customer. Visual identity is part of the puzzle - logos, vehicle liveries, web design and dress codes should be designed so that your branding works across everything from mobile phone screens to the sides of vans – in short, everywhere it has to go.

Beyond this, look at the language your people use and the way they treat customers. There’s a fine line between authentic, resonant branding that appeals to your customers, and a rehearsed corporate spiel that doesn’t sound genuine and ends up alienating them. Everyone says their product is “good quality”; everyone says their business is “innovative”; these words are devalued to the point where they’re meaningless.

Meaningful terms come from what your business chooses to do. When we say that The Marketing Centre is “straightforward”, we mean that we explain jargon and champion plain speaking in all our business interactions. When we say we “share our knowledge”, we mean that we produce guides like this one and explain the processes our part-time Marketing Directors use.

Keep your message clear, simple, unique, and consistent - and above all, rooted in what you do.



Planning your approach

Return on Investment (ROI)

ROI is the specific goal to which marketing activities have to be directed. If a marketing activity is not making money for your business, then it’s not worth doing.

It’s vital for all businesses to understand this - particularly small-to-medium enterprises who often don’t have the budget to waste on marketing mistakes. Businesses need transparency about where their spend is going, and a detailed, up-to-the-minute breakdown of the results they’re getting.

Customer lifetime value - how much someone spends while they’re doing business with you - is the starting point for understanding ROI. In short, it’s what you get for your marketing efforts.

Screen Shot 2018-07-04 at 15.42.33Then, work your way back along the customer journey. How many leads did you have to generate to get one sale? How many contacts did you have to make to generate those leads? How did you make these contacts? Now, you’ve arrived at the things that cost you money - and you have an idea of what each blog post you commission or trade show you attend is doing to move customers along your journey. ROI is not a question of how many leaflets you printed or how many impressions your website gets, but of which activities lead to sales.

Monitoring ROI throughout a given marketing campaign is vital. It lets you make adjustments in spend and strategy along the way, capitalising on unexpected successes and winding down elements that don’t work out.

Budgeting

Most organisations start with the percentage of funds, or a fixed amount, that they want to dedicate to marketing, and then decide how to spend it. This is wrong. To find the ideal marketing budget, you need to work backwards from the returns. What do you want to achieve, and how much is this going to cost?

The process often ends up being cyclical: defining your marketing plan; stretching your budget to accommodate it; dialling the plan back to fit within the available funding. Eventually, you’ll reach a sweet spot at which the amount you’re prepared to spend will probably secure what you want to achieve. This is the moment to stop planning your marketing and start doing it.

Marketing budgets are also the result of dialogue between your executive team as a whole - not something given to a marketing department by the other directors, or demanded by the marketing department.

A budget doesn’t need to include granular details - this many leaflets and that much on pay per click advertising - and it shouldn’t be full of jargon. It needs to express simple, measurable goals: how much each goal is supposed to cost; the metrics by which the goal will be measured, and defined responsibilities for everyone involved.

A budget should also offer a rolling view of performance. Review your budget at least quarterly, or more frequently for large budgets and major campaigns. The length of a particular budget will be set by customer turnover. If your average customer life expectancy is less than a year, annual budgeting is the best approach, while long-term contracts are likely to favour a five or ten year plan.

Planning

Your marketing plan acts as the navigation system for your business. It assesses market conditions in the here and now, and sets your strategic goals for the future, while staying flexible in case circumstances change or opportunities arise.

When you’re making a plan, start with the baseline - an assessment of your current competitive positioning, resources, and marketplace potential. Then set your objectives, defining where you want to be, and a strategy for getting there, before going down into the nitty gritty: which tactics to take, actions to carry out, and measurements for each goal.

Try the Marketing 360 health check

This is easier to understand in practice. If your baseline suggests your business is not making enough sales to the 40-65 professional demographic, your objective might be to “increase lead generation in that demographic by 20%”. The overall strategy might be “inbound marketing”, while specific tactics might be a mixture of “how-to” content marketing, a more user-friendly website, and a new email marketing campaign that specifically focuses on what your existing 40-65-year-old customers are buying. A specific action would be “improve the value of all your content and add clear calls-to-action”, and a measure of success would be the click-through rate of those calls-to-action.

It will take time to produce a real quality plan - weeks for smaller businesses, especially without a dedicated Marketing Director; months for the largest. However, the plan doesn’t have to be totally comprehensive and will never be totally perfect. Markets are never static, and for a plan to have real value, it must be a living document that’s checked and adjusted week by week.

Customer retention

Existing customers are among the most profitable.

The probability of selling more to an existing customer is somewhere between 60-70%, compared to between 5-20% odds of converting a good prospect to a new customer. Existing customers are around three times cheaper to market to, on a per sale basis. They’ve already bought into your offering and your marketing message, and you have data about what they buy, when they buy it, how often, and why they wanted to.

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This isn’t to say that they’re a walk in the park. They move from appreciating a personal service to expecting it - especially if they have a grievance, which they’re more likely to take to senior level. After all, they’re a repeat customer - they expect you to value them more.

Customer retention is a matter of regular communication. To stay at the top of customers’ minds, you need to be reminding them that they’ve done business with you. Email is particularly useful here, especially valuable content like a relevant newsletter or helpful blog. Check-in phone calls to current customers can also be useful for building relationships.

Tailoring those communications is the next step. Offer individually relevant messaging and deals tailored to existing customers and their previous purchases, ask follow-up questions about the transaction, and encourage reviews and responses.

Besides customer lifetime value, you can measure customer satisfaction by looking at Net Promoter Score - the willingness of customers to recommend your product or service to others.

The best way to do this is to send out a one-question survey on a set frequency. Ask "How likely is it that you would recommend our company to a friend or colleague?”, and offer a 1-10 scale for customers to answer. A 6 or less is a detractor - a customer who’s neutral at best towards you. A 7 or 8 is a passive - a customer who’ll recommend you if asked to - while a 9 or 10 is a promoter, who’ll actually advocate for you off their own back.

To find your NPS, work out the percentage of your customers who are detractors, and subtract that from the percentage of promoters - or feed the results into this NPS calculator. Anything positive is a good start and you can benchmark your score against top performing brands and industry averages, here.

Lead generation

Leads are not the only end goal of marketing, but a significant, and often deeply misunderstood one.

Leadership, sales and marketing often have wildly different definitions of what a lead actually is. To salespeople, it’s a red-hot contact, on the edge of purchasing. To marketers, it’s someone cooler, who’s consented to be contacted but needs to be warmed up more thoroughly and their motivations and intentions are relatively unknown at this stage. Understanding lead generation means reconciling these two ideas and finding a customer journey which works most of the time - marketing brings the contact in and warms them up for sales.

Screen Shot 2018-07-04 at 15.46.30There are three elements to a good lead generation strategy:

  • Processes and tactics. This includes simple activities like regular content marketing, social media, newsletters and surveys, with a scoring process to evaluate the quality of each lead and a handover process from marketing to sales or back again.
  • Production. The creation of content or hosting a trade show, for example.
  • Monitoring. Instant responses are rare, so give your tactics time to work. Implement, test, measure, then adjust.

However, for these elements to work at all, you need data. You need to know who knows you. What are your potential leads looking at on your website? What’s making them choose to get in touch with you? Where do your existing contacts work - and in what job role? This data about industry and role can lead into the market segmentation process, telling you exactly what your customers have in common, and identifying the major common factors that it’s worth creating materials to address.

Sales alignment

Sales and marketing don’t always see eye to eye - particularly if they’re both large departments with their own idea about what they contribute to the business. If they’re not working together, the business as a whole loses out. Leads aren’t followed up properly, customers are alienated by a hard sell they’re not ready for, and your teams spend more time arguing with each other than doing their job.

Lead generation is a frequent point of contention between sales and marketing. A lead may be qualified by marketing, who feel it’s now worth a salesperson getting involved and contacting the prospect directly, but not accepted by sales, who are expecting the prospect to be waiting for them with chequebook in hand.

Aligning your sales and marketing functions means “getting your people to see things the same way.” A third party can step in to establish shared definitions, values and processes - so that marketing understand when sales think it’s worth their time to become involved, and sales understand their role in the marketing process, which extends beyond “getting the money out of the customer.”

Sometimes all it takes is a short meeting and a policy document. Sometimes it takes more - sending marketing staff out on sales calls, or inviting sales to suggest and help build content for marketing.

In many cases, integrating the planning helps to integrate the results. If sales people have been involved in planning a marketing campaign, have been primed with copies of the relevant content and messaging, and know exactly what factors say “this lead is ready for sales”, they’ll know what to expect - and the whole machine will function more smoothly.



Executing your plan

With the plan in place - and the key issues around customer retention, lead generation and sales alignment understood - the next stage is executing the plan. There are two major theoretical points to grasp here: communication channels (and how to pick the best one), and data (specifically, what you actually need to measure).Screen Shot 2018-07-04 at 15.49.42

Communication channels

Channels are the media by which you get your marketing message to potential customers. Direct mail, telesales, print media, email, social and web content are all channels. Some are further divided - social media, for instance, needs a different approach for each platform. What works on Facebook won’t always work on Twitter or LinkedIn or Instagram.

The main thing to understand about marketing channels is that there’s no such thing as “a phone customer” or “a social media customer”. The same people discover you in different ways at different times. Most customers engage with your brand at least three times before they decide to purchase anything - and that might mean seeing an advertisement on the side of a bus, finding your web content when they search for a how-to video, and shopping around online.

Therefore, instead of focusing on one channel at a time, create a consistent message that works across multiple types of media. You might tailor elements of the message to suit a particular market segment - your LinkedIn contacts are likely to be more professional than your Twitter followers - but you’ve planned your campaign in such a way that what people see on YouTube says broadly the same thing about your product as what they see on your website.

Don’t get lost in the bells and whistles of individual channels, or which one’s currently fashionable or cheap: focus on your customer profiles and market segments. If the people who buy what you’re selling use Facebook, that’s where you need to be selling; if your leaflets are outperforming your email four times over, it doesn’t matter if the email’s half the price.

Data

Data enables you to make the decision about which channels and segments to target.

Data can be the single most important thing to consider when it comes to marketing, because if you don’t read it right, everything else you build is likely to go wrong - or be wasted. Data is also the single most misunderstood and underused aspect of marketing. Too many business leaders get lost in vanity metrics, talking up how many impressions their Tweets make or how many shares they get on Facebook. None of this constitutes meaningful ROI. Others depend on data blindly, without understanding what data does not show.

Getting to grips with the data in your business starts with an audit that identifies what you already know and don’t know, about every client, customer and contact. If the information you hold is over a year old, there’s a good chance it’s out of date. Regular data auditing of this type is also essential to remain GDPR-compliant.The go to guide to GDPR from The Marketing Centre

It’s then necessary to split this information. You’ll have internal data - about customers you already have - and external data, about customers you’re targeting, which is often more of a best guess, informed by what you already know.

This division allows you to segment your marketing between customers and prospects, who need to be addressed in different ways. The messaging to existing customers needs to be more tailored and specifically address their prior activity - the messaging to prospects is more speculative. People like to buy rather than be sold to - so find out what they want instead of telling them what you want them to hear.

Beyond this, you have a wealth of additional data about individual customer journeys. Who buys what, and how often; how long a sale takes in each segment; what your most profitable service or product is. Cross-referencing all this helps you find buying trends that can shape future marketing campaigns - and it’s a lot more reliable than what you might like to do.



Summary

Without effective marketing, businesses can’t grow. Without marketing theory, marketing can’t be effective.

Marketing theory tells you that customer service is the cornerstone of marketing, generating data and maximising the value of every buyer. It tells you that consistent branding is necessary to make impressions on customers past, present and future. It helps you construct a marketing plan that emphasises measurable return on investment, and use your existing data to pick the right channels for your campaigns.

Each element affects the others. They should therefore be approached holistically, strategically, and not as standalone gestures that’ll promote your business all by themselves.

Finally, successful marketing is a cyclical process of planning, execution and review. Business owners must know enough about marketing to make effective plans, and be confident enough to allow time for their marketing tactics to be successful.Try the Marketing 360 health check

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