Developing A Marketing Strategy Pt2 In the first blog post of Developing A Marketing Strategy I addressed the many moving parts of what goes into creating an effective marketing strategy, click here to read part one.
Some entrepreneurs don’t think about developing a marketing strategy for their business because they have a skill set or expertise, and some money to put behind their idea that they can just go for it without knowing if they have a market for their product or service.
I’m sure you have seen countless businesses open up only to close within a year or two, because of not having a marketing strategy in place..
Your marketing strategy is more than just having a great product or service but how you will continue to sustain your business especially if you have a break and mortar location.
Let’s dive into this component a little further, in part one I addressed how will your product or service be perceived in the marketplace, what does your business hope to accomplish with its product.
Here is Lush’s Mission Statement: LUSH’s mission is to make their products by hand with only vegetarian ingredients and little-to-no preservatives. They are staunchly against animal testing, even refusing to buy material from producers that test on animals, and seek to minimize packaging to reduce waste and lower costs for better products.
Lush appeals to those who are committed to purchasing products that align with the lifestyle and convictions of their customers. Lush has used their mission to become a movement.
Lush has 656k followers on their instagram page, this speaks volumes as to how they have positioned their product as well as bringing awareness to a topic that many are passionate about.
How will your clients feel when they use your product, what experience will they have as a result of using your product.
If you are a product based business you have to showcase your product the way you want your customer to envision it.
Creativity is key when developing your product strategy social media is a great way to showcase your products, however research is key.
How do you want your brand to be perceived as high end or low end? There’s nothing wrong if your product is a low end product, when you look at Walmart and Target, they are perceived in the market place as valuable to those who are on a budget.
Customer Lifetime Value What is the amount that your customer will spend with your company over their lifetime.
This is an important component to determine, price is not the only thing that lends to repeat purchases.
How does your customer service policy benefit your customers? Do you give incentives for loyal customers, discounts or a free gift on birthdays?
Focusing on your CLV is important for continued customer growth, your business won’t be sustainable if you’re not understanding how to capture repeat business via upsells, subscriptions, or membership clubs.
Nespresso has a community of loyal followers based on their popular Nespresso machines and they have built this community around loyal customers. Nespresso also has boutique shop locations where you can go and sample as well as purchase your coffee pods.
What does this bring to their customers? A community of coffee lovers, exclusivity of being a member the Nespresso community click here for a video showcasing their Beverly Hills location.
The point I want to bring out is you can get coffee from practically anywhere, however what is the perceived value of your product, how does it make your customer feel?
What is the experience that you want them to have each time they use your product? My question to you is how much will you make from your customer from the time they enter into a purchasing relationship with your business.
It’s up to you to determine how you will structure and strategize your offers to keep them continually coming back.
Cost Of Goods Sold
If you are a product based business and let’s say you make handcrafted candles, will you have to determine your cost of goods sold.
- $5000 If your starting inventory
- +$2000 for purchases of materials or products, and other costs
- -Ending inventory 15000
- =Cost of Good Sold $5,500
What comes with determining your cost of goods sold are your direct and indirect costs.
I used to have a gift basket business, which included handmade candles, perfumes, body products as well as various themed gift baskets.
I would be losing out on money if I just calculated my inventory without adding in my labor, overhead, shipping costs, any membership or subscription fees based on my business.
Many entrepreneurs overlook these things and just focus on the product that they are selling without knowing if their product is going to be profitable.
Because the pandemic has created a lot of issues with suppliers whom some have shut down their facilities which now places the business owner to find another supplier at the same price point and hopefully the same quality of materials.
Some suppliers have raised their prices which places the business owner at a disadvantage which decreases the cost of goods sold.
Some solutions are to find another supplier at the same costs or raise prices to reflect the changing of the times.
My advice is to give your customers a heads up about any upcoming price changes. If they value your products they will continue to stay loyal, offer some type of incentive or gift to communicate how much you appreciate their business.
As an entrepreneur we are all trying to stay afloat in this economy don’t give up, change what is necessary and continue to provide what is valuable to your customer and they will reciprocate by sharing your business with others.