A strategy is an informed set of decisions about how to get from where your business is now to where it wants to be in the future.
In this series we’re discussing how to produce a marketing strategy that wins. This article covers the first phase of the strategy process, looking in.
The better you understand the current state of your business, including your objectives, target audience and capabilities, the more informed your strategic decisions and plan will be.
This means taking more time at the outset to collect and consider everything needed to make good strategic decisions.
The level of effort required for this phase of developing a marketing strategy will vary based on the complexity of the business, level of risk, and experience creating strategies that win.
01 Set business and marketing goals
The best place to start is determining your business goals. For some business these will come with a considered plan, but for many this will simply be a financial objective. For example, “We want to increase revenue by $X million in three years.”
If your business lacks a detailed plan it’s your responsibility to work out how it will achieve this objective. The three ways you can do this is by creating a new market, gaining market share within an existing market, or both. Most business will need to gain market share, which means your driving marketing goal is to have a greater portion of your addressable market choose your business rather than your competitors.
You next need to think about whether that means increasing the volume of customers, the value of customers or both. The answer will depend on what product or service your selling. Most businesses will lean towards doing both, but how you weight your decision is important.
To decide you can consider your business’ ability to scale. For a business selling subscriptions, the clear decision is volume. The reason is that it doesn’t cost more to service 100,000 customers than 100 customers. The reverse is true for a service-based business, such as a law firms, which bill based on time and materials used. Bringing on a greater volume of clients requires more staff, a bigger office and other costs. It makes more sense to aim to prioritise growing the value of clients, which will result in greater profit.
The next step is creating a rough business model for how what needs to happen to reach your goals. That might be something like increasing market share by x% for y number of customers at an average value of $z. Easy.
02 Decide what must be true to achieve your goals
Now you know what the success looks like and what the high-level plan for what needs to happen to achieve your goal, it’s time to think about how to get there.
There’s no single way to do this. I like to find three to five things that need to be true for the business to realise its goals. Doing this creates a logical step between goals and strategic decisions, which is easy for non-marketing specialists to understand. I also find he helps keep everyone involved in the strategy on specific problems to solve. Before going down that path however, we need more information.
Some questions you might ask are:
- Why do customers choose us now?
- Why do customers choose competitors rather than us?
- What have we done to acquire, retain and grow customer lifetime value?
- What worked well and what didn’t?
- Why did certain marketing activities work well or not?
- So on and so forth...
The intention is to understand why the current state of the business is what it is, for better or worse. Your answers will inform questions about what needs to be true to achieve your marketing goals.
For example, people might choose your competitors because they didn’t know your business exists. You can then say that in order to achieve your goals more people within your target market need to be aware your business exists. We’ll later reframe this as a challenge or opportunity that may result in a strategic decision to increase brand awareness by increasing your share of voice from x% to y%.
Finally, list all of your key findings as a challenge or opportunities to refer back to later.
03 Assess current state capabilities
Before thinking about what you need to deliver a strategy, it’s good to take stock of what you have. If you’re missing a particular capability – let’s say content – and you need that to deliver your strategy, then adding the capability becomes an important dependency.
Brand is a good place to start. And I don’t mean the logo. A well-defined brand framework should include your brand purpose, proposition, and market positioning. Within this is framework is the big idea the propels your business forwards. For example, if the big idea driving fintech company’s brand is trust then that should be the cornerstone of their marketing strategy. On the chance your company hasn’t clearly defined its brand then this needs to go onto the list of challenge and opportunities.
This will vary depending on your business. Things you want to know are budget allocation, how effective are your processes (incl. how well do departments and teams work with one another), what do leaders believe the company should do in the future, do they believe in marketing, what do they see as the biggest challenges to growth, where are the biggest pain points. Also, what has the business done before that did and didn’t work well. Where you uncover potential challenges and opportunities then add them to your list.
Like business, it’s important to take stock of what skills your people have. If your marketing team is just you, or missing essential skills, then delivering your strategy will mean hiring more people or outsourcing. With respect to marketing, I’d jot down the core skills involved and use this as a baseline to assess what skills we have in house. These might include, strategy, brand, content, SEO, social media, advertising, event management, direct marketing, customer relationship management, sales, analytics, digital to name a few.
As above, you need to understand what you have to know what gaps need to be filled to deliver your strategy (or constraints need to be accounted for). The process might be simpler for small business, but for those a little bigger there’s value in assessing your marketing technology stack. I’ve found the most effective method is to document your business goals, then the jobs that need to be done to achieve said goals, followed by the technology needed to do those jobs. This will likely draw out where there are gaps or opportunities to be more efficient or effective.
It’s easy to skip past this stuff and jump to solution mode. The problem is that not giving enough thought to your capabilities can result in poorly informed strategic decisions or worse, an inability to deliver and otherwise good plan.
Audience understanding and insight
Your business will ideally already have a documented understanding about their audience. Where they don’t, I like to include persona building as part of the brand strategy (as if you want to influence people’s perception of your business then it’s good to know who those people are).
In any case, you should be getting as much insight as possible about who they are, what they are about, how they use media, what problem you’re solving for them, and what’s most important when making a decision relating to your category.
As above, add anything noteworthy to your list of challenges and opportunities.
Recapping and next steps
The first phase of the strategy process has been looking in. At the end of this stage you will have:
Defined your business goals
Defined your marketing goals
Listed what needs to be true for that to happen
Assessed current state internal capabilities
- Started a list of challenges and opportunities facing your business
The second phase will shift to looking out at macro trends, market trends, competitors and best practices before identifying strategy themes and decisions.
If you’ve got a strategy but suspicious it might suck then you might like this article on how to know for sure.