Every good marketing plan begins with goals.
Sometime late last year, your company’s visionaries gathered around and decided where they want to be in 10 years, where they need to be in five years and therefore, where they have to be by the end of this year.
Their list of goals complete, they sat back, relaxed, congratulated themselves and told you to accomplish them.
Now what?
The next step in implementing a sound marketing plan is the strategies. These are the means to the ends defined by your visionaries, the conceptual blueprints for your company’s success.
There are five, and only five, strategies to grow any business:
- Buy market share
- Hunt
- Farm
- New products
- Merge/acquire
1. Buy market share
To sell more of the same products or services to your current target market, you need to “buy” customers from your competitors.
This can be costly. It may require you to lower your price to lure customers away from your competitors. Or you may need to spend more on advertising to induce more people to abandon their current loyalties and try your brand.
2. Hunt
Selling more of your products or services to different markets can also be expensive. Any time you hunt new customers, you need to establish awareness and credibility for your company and your products with them.
If you are currently offering your services in Wisconsin but want to start selling in Chicago, too, you will need to let all those Chicagoans know who you are, what you stand for, and the features and benefits of your product line. You will need to educate them on the myriad reasons all your Wisconsin customers are so smart they have made you the leading brand in the state.
3. Farm
Farming is the easiest and most cost-effective strategy.
Hunting new customers is important to maintaining a healthy sales picture long-term. But, farming your existing customers is more efficient.
The cost of selling to new customers is 12 times more than selling to current customers. Your current customers already know and trust you. You don’t need to create awareness and credibility with them.
Here are five examples:
- Rotation farming
- Suggestive selling
- Selling accessories
- Incentive selling
- Trading up
Rotation farming is selling to the customer who buys at regular intervals. For example, a florist might contact his customers and request their wedding anniversaries and spouses’ birthdays, recording the dates in his database. Shortly before each date, he calls and suggests a floral arrangement appropriate for the occasion.
Suggestive selling is perhaps the easiest sale. I call this the You-Want-Fries-With-That-Order strategy. Your customers already have their wallets open. You’re simply suggesting they spend a little extra to enhance the quality of their purchase.Sell accessories. If you sell a desk, suggest a matching chair or floor lamp.
Incentive selling includes free gifts, premiums and discounts. For instance, buy these new cosmetics and get a free tote bag. Or buy one hamburger and get the second one for half price.
Trade up customers. Last year, your customer bought the standard model. This year, sell him the deluxe model. And sell him an extended service warranty, too.
4. New products
New products are absolutely necessary for the health of your company. They replace your products that are in decline; they provide fresh revenue from new markets; and they position your firm as an innovator in the industry.
But they can be risky. More than 30,000 new products are introduced every year in the U.S. and more than 250,000 globally, according to the Harvard Business Review. A majority fail in the first year and more than 80 percent in the first three.
5. Merge or acquire
Acquiring a competitor helps you gain market share and it allows you to expand your markets (hunt). It’s also an opportunity to sell different products to your existing customers (farm).
So if the visionaries in your company suddenly drop their list of objectives on you and tell you to figure out how to achieve those goals, you now have the tools.
There are only five strategies for increasing revenue. Pick those that make the most sense for your company and pretty soon, they may make you one of the visionaries.
-Robert Grede, author of “Naked Marketing – The Bare Essentials,” is president of The Grede Co., which offers marketing and strategic planning consulting (www.robertgrede.com). He can be reached at rg@thegredecompany.com.
