marketing for entrepreneurs

MarketingMarketingFor Entrepreneurs

Windsor PRhttp://www.windsorpragency.comTwitter: @WindsorPRFacebook: http://www.facebook.com/WindsorPR

What is Marketing?What is Marketing?“Because the purpose of business is to create a customer, the business enterprise has two--and only two--basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business”

- Peter F. Drucker

What is Marketing?What is Marketing?• AMA Definition:

“Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”

• John’s Definition:“Marketing is anything you do which affects the behavior of customers. Ideally marketing is intended to generate behavior which has a positive effect on the business.”

What is Marketing?What is Marketing?• Includes

oMarketing Mixo Location SelectionoCustomer ServiceoBrandingoHow you Answer the Phoneo The Cleanliness of Your Bathroomso Etc…

Pre Startup ActivitiesPre Startup Activities• Identify a Target Market• Identify the Problem• Competitive Research• Points of Potential Differentiation

Target MarketTarget Market• Trying to create a new market is an uphill and

expensive battleo Ideally sell to people already buying similar

products / services• Questions

o Is the target niche identifiable?o Can they afford what you’re selling?o Do they want or need something that your

product / service provides?

Doug Hall ResearchDoug Hall Research• 6 year analysis of 4000 brands came up with 3

success criteria

1. Overt BenefitLow: 13%, Medium: 26%, High: 38%

2. Real Reason to BelieveLow: 18%, Medium: 29%, High: 42%

3. Dramatic DifferenceLow: 15%, Medium 40%, High: 53%

BenefitsBenefits• Features are things or

characteristics• Benefits answer the question,

“So, what’s in it for me?”

Reason To BelieveReason To Believe• Credibility, Proof of Claims, Explanation How• What types of things increase credibility?

o Presso Testimonialso Endorsements

• Proof of claimso Real numberso Researcho Before and After Photos

• How Does it Work?

Dramatic DifferenceDramatic Difference• People resist:

oChangeo Sales – fear a loss of control

• To gain attention, your difference must be significant

Marketing Mix (4Ps)Marketing Mix (4Ps)• Neil Borden – Marketing Mix - 1948• Marketing Resource Distribution to:

“achieve the ideal way for the organization to reach and satisfy their customers in their target market

• Essential to marketing planning

Marketing Mix (4Ps)Marketing Mix (4Ps)• Product• Price• Place• Promotion

Positioning (The 5Positioning (The 5thth P) P)• The process by which marketers create an

identity in the minds of the target marketo Finding “mindspace”o Again Differentiation

• May includeo Brandingo Any of the 4 Pso Channelo Target Market

• Memes, slogans, jingles, logos

Emotion as a Key Emotion as a Key ElementElement

• All decisions are based on emotion and justified with logic

• We buy a lot of stuff to feel good.• We move away from pain and towards

pleasure

3 Ways to Increase 3 Ways to Increase RevenueRevenue

1. Increase your number of customers2. Increase your average transaction

size3. Increase your rate of transactions

per customer

Understand Average Understand Average Customer Lifetime ValueCustomer Lifetime Value

• Average Transaction Amount• Average rate at which a customer buys• Average length of time someone remains a

customer

Example: An average customer buys $10 per transaction, 12X per year, and stays a customer for 3 years.

The Average Customer Lifetime Value = $360

Average Customer Average Customer Lifetime ValueLifetime Value

Example (continued):

Your ACLV is at $360.

Let’s you can add an upsell that increases the average transaction to $12. Now, you run a promotion that get’s a customer in 2 more times per year (14 times). And you spend effort on retention and keep your average customer for 4 years.

New ACLV = $672, a lifetime revenue increase of 86.6%

Average Customer Average Customer Lifetime ValueLifetime Value

• If you have 2,000 customers, with an average yearly spend of $120 (12 purchases a year at $10 average), your revenue is $240,000 per year.

• Again increase the purchases to 14 times per year at $12 average purchase and your yearly revenue goes to: $336,000 (+40%)

• Now, increase your customer base by 10% to 2,200 as well and your yearly revenue is: $369,000 or (+54%)

So, Where Can You So, Where Can You Focus Marketing Focus Marketing

EffortsEfforts1. Customer acquisition

o 4-7 Times more expensive than generating repeat business

2. Customer retentiono Loyalty programso Personal toucheso Good customer service

3. Increasing transaction rateso Future couponso Reminders

4. Increasing average transaction amountso Upsaleso Pricingo Add-ons

Simplified Marketing Simplified Marketing CycleCycle

1. Get AttentionPeple need to know you exist.

2. PositionYou must gain peoples trust.

3. SellObtain the sale.

Simplified Marketing Simplified Marketing StrategyStrategy

1. Find out where your target market congregates.

2. Go there.

3. Provide value.

Best Promotional Best Promotional ToolsTools

Higher up = Most effective + least expensive

1.Website (must have)2.PR3.Social media4.Word of mouth5.One on one sales6.Direct mail7.Paid advertising