As marketers in the professional services industry, it is important to understand the key factors that enable us to acquire and keep customers profitably. We’ve been interested in understanding what these factors are, and rather than taking an academic view, we’ve been working with numerous companies to learn what makes a difference.
We have identified four factors that make a difference and represent best practices for marketers. Based on input from hundreds of companies, representing a multitude of diverse industries, four components rose to the top as being critical success factors:
1. Having an approved marketing plan
2. Having an approved marketing budget
3. Having identified and secured resources
4. Defining and establishing metrics that demonstrate marketing’s impact on the business
The companies that consistently address these four factors are more likely to achieve their revenue and profitability business goals.
Let’s take a closer look at each of these four components. While reviewing each, think about how your company is performing.
An approved marketing plan in time to matter
A marketing plan serves as a blueprint that guides a firm’s course of action. A good marketing plan should include at least a clear set of quantifiable objectives and a set of strategies, tactics, and milestones that support the objectives. Organizations without marketing plans suffer from long sales cycles, weak pipelines, and customer churn. Today, many companies have come to realize that, without a plan, they may be engaged in various activities, but not necessarily moving forward.
Winners realize not only that an approved plan matters, but the timing of the plan is just as important. An approved plan halfway through the year impedes a winner’s ability to make a sufficient impact on the year. In reviewing many plans, one item that distinguishes the winners is the inclusion of a compelling positioning platform. A well-developed positioning platform clarifies why people should buy from you and how you are better and different from the competitors they could just as easily select. Developing a positioning platform requires you to understand your target, their problems and their needs, and then to position your offer purposefully to meet these needs. This is what is known as being customer or market centric.
Having a plan is a good first step, but without adequate resources, people and funding, achieving a plan is as realistic as wishing on a star.
The most successful marketers have an approved budget. They do not have to go back to the well time and time again to request funds; they did their homework when they developed their plan, and the rationale for the plan supported their investment requests. Having a stable budget that is really committed to marketing (and owned by marketing) enables marketing to operate on a long-term basis, rather than just day to day. By working with a budget, looking at the big picture and into the future becomes easier as it is known there is a financial resource available and specifically allocated to marketing efforts.
Companies have come to realize that the saying “show me the money” has meaning even for marketers. So remember, winners have a budget.
In addition to a budget and plan, what other types of resources are needed?
In the past, Marketing has been hindered years by lean staffs. In many companies, the marketing efforts are lead by non-marketers, people predominantly with sales, communication, and domain experience. In addition to that, marketing headcounts and hiring plans remain unstable year to year. Lack of marketing expertise and the inability to leverage external experts can keep some companies from being able to achieve their goals.
Marketers are being required more and more often to connect the dots between the marketing efforts and business outcomes. Yet even today, many organizations do not measure the impact marketing has on their business goals. Why is this? Are companies lost when it comes to metrics or just unaware of the value in measurement?
Many companies have no idea where to begin with metrics or which ones should be used. In fact, of the few respondents who were using metrics, it was found that metrics were being applied incorrectly. The most common metric used to measure marketing’s effectiveness was number of new deals, which is historically a metric used for sales. Without metrics, a marketer is operating blindly. Success depends on being able to establish the right metrics for linking marketing investments to business goals.
Three Metric Gauges
Discussing metrics could be a full article, in and of itself. But to get started, marketing should drive three gauges:
1. Market share
2. Lifetime value
3. Brand equity
These gauges should be identified in the marketing plan and directly linked to the appropriate marketing objectives, strategies, and tactics. That is, those objectives, strategies, and tactics intended to increase your portion of the market should be clearly stated along with the exact portion in each market segment. Strategies and tactics that might move the market share needle include:
• Share of voice
• Share of preference
• Share of distribution
• Rate of customer acquisition
Winners have strategies for each of these.
The same holds true for objectives, strategies, and tactics that address improving the lifetime value of your customer base, with efforts around share of wallet, recency and frequency of purchase, referrals and so on.
Winners also recognize that their job includes increasing the value of their company’s brand, and they incorporate objectives, strategies, and tactics designed for this purpose. They have a clear understanding of their brand’s current value and the impact this value has on being able to secure a price premium for their services and faster market acceptance for their new offers.
The “Take Away” from the Research
Winners, both the marketers and the executives within the company, realize they have a responsibility to the strategic success of their companies. And they realize that the cornerstones of strategic success include having a blueprint, budget, resources, and clearly defined metric targets. If you want to join the winner’s circle, that is grow your customer base and the share of wallet from your customers, you will need to take the time to invest in developing a plan, securing a budget, establishing the right metrics, and securing appropriate resources. These may seem obvious, but the results of the semiannual surveys over the past five years tell us that many companies have yet to master these basics. By just considering these components and how they can be applied to your firm, you are taking one step closer to the winner’s circle.