In a recent survey I conducted, it was discovered that ⅔ of people starting an online store are doing so with little to no customer acquisition plan.
Common answers given when asked “What is your overall customer acquisition strategy?” included vague responses, such as:
- Social Media
- Friends & Family
- Paid Advertising
While these seem like perfectly reasonable answers, around 60% of the participants in the survey indicated that they had never sold a product online before.
Conversely, the other ⅓ of participants in the survey responded to the same question with more concrete and tangible answers such as.
- Going to Trade Shows
- Building a Pre-Launch List
- Creating a DataBase of Bloggers for Product Reviews
- Reaching Out to Magazines for Reviews
Of the people in this ⅓ group, about half indicated they had already made their first sale, or were actively building up a group of prospective customers to launch their store to.
Looking at some of our other historical customer data, I know that stores with launches that bring in at least 100 new customers in their first month have a tendency to grow more sustainably within the first 3 years, whereas everyone else may acquire between 20-30 new customers a month for the first 2 years, and watch that number slowly decline over time.
All of this got me thinking…
What do we really know about developing a marketing plan that attracts, retains, and even steals customers from the competition?
Furthermore, how many of us are honest with ourselves about what it realistically takes to achieve whatever goal it is we have for our store; be it a steady side income or becoming a game changing market leader?
Without a solid marketing plan, too much is left to chance. When you rely on “hope based marketing” you’re at very high risk of losing money, time, and traction, because nothing is strategic and everything is reactive.
As the old adage states, “A failure to plan is a plan to fail”
Before we dive in, there are three key areas you must be brutally honest with yourself about:
- Budget – How much are you willing to invest to get the word about your product (or store) out there? This includes anything from advertising spend to hiring people to fill necessary roles.
- Talent – What strengths and assets does your team currently have at their disposal? This could mean anything from having a large rolodex of industry contacts, to being extremely saavy with PPC, having a keen eye for design, or a knack for making sales in person.
- Your Limitations – Don’t know a lot of people with access to larger groups? Don’t have a lot of money? Time?
It’s important you know each of these things up front, because it will guide you into being realistic with yourself about your goals and what it will take to reach them.
I’ve seen plenty of first time entrepreneurs say they’ll “do SEO” as their primary means of acquiring customers, completely oblivious to the notion that SEO is a rich man’s game. That’s not to say that it’s impossible, but it’s probably not the best use of time if you don’t already have the talent, budget or time to execute a fully fleshed out SEO campaign.
All that being said, this guide is intended to help you make informed, grounded decisions based on your current position, strengths and limitations.
As you create a marketing plan for yourself, please accept that several areas of this will ask that you do considerable research on your market, your competitors, and your place in it. This takes time, but it is time that will help guide you and keep everyone on same page and moving in the same direction.
This is exactly as it sounds, and should be the last thing that you write.
It will summarize the other sections in the document and provide you, your employees, your advisors, and your (potential) investors an overview of your plan.
Section 1 – Goals & Objectives
This is where you set the stage and paint a broad picture of what your marketing activities will be focused on for the upcoming year.
Goals might include (but are not limited to):
- Penetrating or Creating a Market
- Stealing Customers From an Established Competitor
- Expanding Product Distribution (on or offline)
- Launching a New Product or Product Line
Karen Albritton of marketing firm Capstrat says, “If your business goal is to grow revenue, what marketing objective will accomplish this? Adding more customers? More repeat customers? Higher expenditures?”
As you define your objectives, use real numbers to add gravity to how you plan to achieve the goal.
If the goal is “Grow Revenue by 25% each Quarter ” your objectives might be:
- Add 40 new customers/month
- Increase repeat purchases by 10%
- Increase AOV by 15%
Don’t worry about getting into the “how” just yet, but rather let this Goals & Objectives summary set the stage for the rest of the marketing plan. As you flesh out the next few sections, you’ll build the case for why the market will be receptive, and how to achieve these objectives tactically.
Part 1 – Organization Mission Statement & Value Proposition
This is typically a finely-honed paragraph that considers the following:
- A stable, long-term vision of the company and answers questions like:
- Why are we in business?
- What markets do we serve and why?
- What are the main benefits we offer our customers? ( Low prices? High quality? Hand-crafted? Carefully curated?)
- What does the company want to be known for?
- What does the company want to prove to the industry, customers, partners, etc?
- What’s the general philosophy for doing business?
- What products/services does the company offer?
- Company History
- The companies age, how/why it was started, product evolution, markets served
- Resources & Competencies
- What are we good at?
- What’s special about us compared to current and future competitors? (no need to name names)
- What gives us a competitive advantage?
- What are our advantages in terms of people, products, finances, technical, partnership/supply chain, etc
Not all of these things need to make it in to the mission statement of course, but having an awareness of each of these elements can help you to choose what is most important to the organization.
For example, there’s an old, high end men’s shoe store in my town. If they were to launch an online store, I would write their mission statement to say:
“Since 1915, Lexington Shoes has outfitted gentlemen with luxury, hand-crafted footwear. Our founder Charles Lexington believed the only way to deliver a premium experience was to make eye contact, listen deeply and make recommendations based on the person, not the products on the shelf.
100 years and 3 generations later, we stand by this value and feel its increasing importance in our ever connected, too busy to slow down and see each other world.”
The mission statement differs from the value proposition, in that the value proposition is a concise promise of value. Peep Laja of ConversionXL says:
- explains how your product solves customers’ problems or improves their situation (relevancy),
- delivers specific benefits (quantified value),
- tells the ideal customer why they should buy from you and not from the competition (unique differentiation).
Section 2 – Target Customers
In this section of the marketing plan, detail everything you can about your target customer or customer groups.
This includes any relevant customer demographics:
- Geographic location
- Purchasing Power
- Family Status
- Or any other quantifiable data
This article on Entrepreneur is a phenomenal primer on customer demographics. If your customers are U.S based, it recommends using the Census Bureau and Bureau of Labor’s website to gather the information. I’ve also found City-Data.com to be an excellent source of quantifiable demographic information.
The target customers section should also include relevant psychographic profile information:
- Television Shows
All of this will influence a wide range of areas in your business, including brand positioning, advertising creative, ad placement, local markets you want to penetrate and more.
Being able to more clearly identify your target market will help you to “speak the language” of your prospective customers, and get a higher return on your investment for your creative assets.
Using this, describe your target market approach. Are you using a mass-market strategy or speaking to a niche?
When evaluating your target market try to answer the following questions:
- What are the needs/benefits sought by the market overall?
- Who uses the product?
- Why do they use the product?
- When do the use the product?
- How is the product used?
You should also use this section to discuss how customers perceive your product in relation to competitor’s products or the other solutions they use to solve the same problem. What are their attitudes toward your company, and to the general product category you serve? (i.e “I wish more furniture sites offered X,Y, Z feature)
Describe their purchasing process as well:
- What does the decision-making process involve?
- What sources of information do they seek?
- What’s the timeline for their purchase?
- Who actually makes the purchase?
- Who or what influences the purchase?
And finally, provide market size estimates for those included in your target market.
- What is the largest possible market if everyone bought?
- What percentage actually bought from you in the past?
- Given the current timeframe for the plan, how much growth do you think is possible in the next year and longer?
If estimating the market size seems daunting, Rastislav Turek – CEO of Pexe.so gives an exellent response on Quora that breaks it down in very simple to understand terms.
Section 3 – Situational Analysis
This section of your marketing plan is to provide a snapshot of where everything stands at the time the plan is presented.
This section in particular can take a significant amount of time as it scrutinizes multiple levels of your business, your market, where you stand, and how your competitors are doing.
If you’re running an established business, this is where you take inventory of what’s currently working and what isn’t. For new businesses, this is the research you that’ll help you understand the market you’re getting into. (See Also: Preparing A Market Study)
This includes an analysis of the following areas:
1. Current Products
What are the main features of the products, and major benefits received by those using the product, current branding strategies, etc – If you’re selling the same product other retailers, the “product” would be in how you’re positioning the product category and the benefits of buying from you instead of everyone else.
Describe pricing used at all distribution levels, including the pricing to final users, wholesale buyers, the incentives offered, discounts, etc
Talk about the various ways the product is made accessible to final users, including the channels used, major benefits received by distributors, how the products are shipped, process for handling orders.
Describe the promotional strategies and tactics in terms of advertising, sales promotions, personal selling, public relations and how the product is currently positioned in the market.
Take inventory of which promotions exceeded expectations in the previous year, and which did not perform to expectations. Include hard numbers when possible.
Discuss the various services offered to final users and distributors before, during & after the sale.
Include performance and/or usage metrics of each service, and impact it’s had on the bottom line. (i.e: Customers who use our personal styling service tend to spend 4x more than customers who do not. Wholesalers who use the quick order function in the ordering portal process 2x more orders than wholesalers that do not.)
2. Distributor Networks
Evaluate how your company’s product is currently (or will be) distributed.
This includes your own website, any third-party marketplaces you might sell on, physical retailers, pop-up shops, affiliates, referrals from existing customers etc.
For your own website, it’s also worth breaking down which traffic sources brought the most sales in the past (i.e Adwords, Facebook Ads, Organic Search etc.)
List out each of the channels in the supply chain and provide an overview of their performance.
Be sure to include the needs/benefits sought by distributors. This might include referral fees on marketplace sites like Amazon or Etsy, or the need for localized co-promotion with a physical retailer.
Also include your product’s role within the distributor’s business.
- How important is it to their strategy?
- How do they position it in relation to the competition?
- How do they make their purchases & who influences their purchase decision?
When evaluating distributors, be sure to list the type of distributor, their size, geographic region, and the markets they serve.
3. Competition Analysis
This is where you’ll examine your primary competitors serving the same target market.
You’ll want to analyze direct competitors:
- Target markets served
- Product attributes
- Distribution & Distribution Network
- Services Offered
You’ll also want to discuss their strengths and weaknesses including
- Financial standing
- Target market perception
- R & D capabilities
Finding this will take some digging. Audienti has a great article that can help.
It may also be a good idea to provide a S.W.O.T analysis on your competitors to provide an overview of their Strengths, Weaknesses, Opportunities, and Threats.
4. Current Financial Condition
Using charts, tables, and graphs along with a brief paragraph explaining what you’re looking at will prove invaluable for making the information easy to digest.
Current Sales Analysis
Overall industry sales and market share:
- Total market sales
- Total for your company’s products
- Total for competition
By segments/ product categories:
- Total for segments/product categories
- Total for company’s products
- Total for competition
By distribution channel
- Total for each channel
- Total for company’s product by channel
- Total for competition by channel
By geographic region:
- Total for each region
- Total for company’s product(s) by region
- Total for competition by region
Competitive information might be difficult to obtain on your own. Depending on where your business is at, It may be worth working with an agency to conduct the competitive intelligence for you.
In addition to the sales analysis, you’ll want to look at how your expenses impacted those sales, and identify the areas where you should scale back or double down.
- Direct – those that can be tied back to the product. (i.e ad spend, spend on creative assets, etc)
- Indirect – expenses that are tied to talent and technology fees.
The point of this is for you to evaluate if certain channels, markets, geographic regions, etc are worth it moving forward.
For highly detailed plans, this may need to be broken down by individual products or product categories.
5. External Forces
These are the areas you have no control over that have a (positive or negative). This could include product trends, natural disasters, seasonality, etc.
Other areas to consider are:
- Social & cultural
- Demographic shifts
- Economic considerations (i.e housing market crash, rise in oil prices)
- Legal, regulatory, ethical
If you’re an established business, consider these from the previous year and discuss if/how this impacted certain rises or drops within specific markets/channels.
If however, you do not have your own historical data to consider, measure the known impact these external forces have had on established competitors and those in your market.
Being prepared for external factors could lead to major opportunities. Think – having enough snow shovels on the shelves during a blizzard, or having enough medical supplies during a natural disaster, or having a protocol in place for upcoming regulatory changes within an industry.
Being prepared for external forces is where a company can catch it’s competitors sleeping.
6. Summary Of The Situational Analysis
Because there is so much to take in with the situational analysis, it’s good to provide a summary of everything you’ve just talked about.
Discuss the opportunities that may arise as a result of any of these factors, what you’d like to spend more on, and where you should spend less.
Section 4 – Pricing & Positioning Strategy
In this section of your marketing plan, detail the positioning you desire within your industry and how your pricing will support it.
Using the information you’ve collected in your situational analysis, pricing will likely need to be adjusted by distribution channel, competitor positioning, geographic region, and so on.
Pricing on channels you own should not also be overly competitive with distribution partners who sell the same product. If you’re selling for 20% less than a highly visible partner for example, you could risk upsetting the partner and losing their distribution.
When discussing positioning, you may also want to briefly discuss how you’ll want to position your product with your existing distribution partners. Don’t worry about going into too much detail on the positioning here, as it will covered in detail in the next sections.
Do you develop exclusive product lines with specific distributors? Will you include special bonuses for customers who buy through that partner? Are certain items only available when a customer orders direct?
Tie all of these adjustments and changes into real numbers and how it impacts the bottom line.
Do this showing the impact of:
- By volume and growth percentage
- By customer segments
- By volume and growth percentage
- By channel
Also show the margins associated with working with each channel and how profitable potential price/positioning changes will be.
Because this relates specifically to your existing channels the goal is to show how these changes will attribute to the objectives outlined in Section 1
Section 5 – Distribution Plan
This is where you detail how & where customers will be buying from you.
Are the buying directly through you? Are they buying from other retailers and distributors? Are you doing pop-up shops or selling in person?
If you’re working on a large scale, it’s worth organizing your distribution touch-points into various regions.
Section 6 – Promotions Plan
This section is where you’ll give an overview of your overall promotion plan, providing a summary on existing and new channels you’d like to add to the mix and how it could impact your growth.
This is where you discuss your positioning within each marketing channel (old & new) and specific & detailed plans for each distributor.
It is important to calculate the both the monetary and time costs that will be associated with each channel, and how it will impact growth.
For Example: You currently work with a smaller marketplace site, and for $1,000/day, you’re able to receive front page & sitewide promotion to the products you sell with them. Estimated traffic during the time frame is X. If existing conversion rates are Y and there is a Z% increase in traffic, it could result in ___ new revenue.
Make sure you include all possible channels you want to explore including but not limited to:
- Direct Mail
- Physical Retail
- Other Social Media
Please Note: At scale, each of these channels has a real cost to be done properly. For as much as you can build backlinks and perform keyword research on your own and maybe get early traction, at some point, you will need to hire somebody who knows what it takes to break into more competitive serps.
I highly recommend reading Nick Eubank’s article on Realistic SEO as it will show you just how difficult SEO can be to break into competitive verticals.
I bring this up, especially for early stage entrepreneurs, depending on your budget, skillset & time, the channels that seem “free & easy” are typically even more challenging to break through the noise.
For each area that falls under “Online Marketing” you may want to create separate documents for each, as these plans can be quite detailed on their own.
Section 7 – Marketing Assets
This is the creative used to promote your content to current and existing customers. This may include:
- Your website
- Ad creative
- Design Talent
- HD Photography
- Business cards
Identify what you already have, and what’s needed to successfully execute the promotion strategies discussed in the previous section.
Section 8 – Conversion Strategy
Once you get people to yours or one of your distributor’s sites, how do you plan on converting them to paying customers?
On sites you don’t control, this could include, but is certainly not limited to:
- Improving sales copy
- High quality photography
On sites you do own, you’re free to experiment with iterative testing, such as making the search function easier to use, improving the value proposition, and increasing the visibility of features that prospective customers need to feel comfortable buying.
Using what you know about the different customer segments you’ve identified (i.e High Ticket Spenders, Frequent Buyers, etc) propose a handful of ways you might be able to get them spending more & more frequently in this section
Conversion optimization is an ongoing process that is too encompassing to boil down to a handful of tactics. However, if you’re providing an overview here, it’s a good starting point for a separate fully fleshed out document for later.
Section 9 – Joint Ventures & Partnerships
This is where you identify the agreements you’ve made with other organizations to help reach new customers or better monetize your existing customers.
When you see McDonald’s co-promote Coca-Cola, or when you buy a remote and it includes Energizer batteries, this is JV and Partnerships at work.
Think about what other purchases your customers are making before, during, or after they buy from you. Make a list of the companies that provide those solutions and reach out to secure them.
Section 10 – Strategy For Increasing Orders
Here, you detail you’ll make more revenue per customer:
This could include using:
- Free shipping thresholds or
- Free shipping membership program (flat rate membership)
- Product bundling
- Subscription services
- Increase prices
In this section, be sure to reiterate any relevant qualitative research or data you’ve found that would support a need for the program. Also provide estimates of how much each program might cost to implement and projected impact it may have on growth.
Section 11 – Referral Strategy
How to you incentivize existing customers to refer new customers?
A strong referral marketing program could do wonders for your business, however it requires careful planning and needs to ensure the rewards for joining are valuable for your existing customer and whoever they’re referring.
Which customer segments will be the most receptive to taking action with a referral marketing program, and at what point you should reach out to them. Frequent buyers, for example, may be a good starting point.
Section 12 – Financial Projections
Here is a final summary of all of the expenses incurred from each of the previous sections as well as their projected growth rates and timelines.
While these will never be 100% accurate, they will provide solid guideposts for your overall marketing strategy and goals to achieve.
As you progress through the year, work off of this document and create parallel documents to track the success/failure of certain campaigns. With any luck, you will exceed your own expectations and have even more budget to play around with the next year.
There is a lot of work that goes into a full marketing plan. For entrepreneurs who are just starting out with the dream of being “the next big thing” it’s important to see what kind of planning goes into successful entry in the market.
It’s also very easy to see how a budget can get stretched incredibly thin. If you’re just starting out, it’s recommended you only work with a small handful of channels until you’re profitable enough to expand.
If you’re well established and using multiple channels, take the opportunity early in the marketing plan to discover which channels & segments are wasting your time.
Regardless of who you are, don’t try and run a business without a detailed marketing plan.