We have talked about how to identify your target market as well as how to design a solid marketing plan. Now we will look at identifying your marketing strategies.
The first step is to identify the marketing strategies you wish to use (television ads, direct mail campaigns, email blasts, etc.) and formulate a variety of tactics for each candidate at any point in the sales cycle.
For example, you might consider using billboards, newspaper ads and online searches to reach cold prospects but use email to contact your warm prospects.
Find out which form of media your target audience turns to for information, and go from there.
How to budget for marketing
Marketing is critical to the success of a business. There is no reason your budget shouldn’t reflect its proposed value. Devote a percent of projected gross sales to your annual marketing budget.
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According to the U.S. Small Business Administration, companies with a net profit margin of 10 percent to 12 percent and businesses that net less than $5 million in sales a year should allocate about 7 percent to 8 percent of their gross revenue on marketing.
However, some experts believe that new startups should dedicate between 2 percent and 3 percent of revenue to marketing efforts — and as much as 20 percent in a competitive industry.
Any attempt at marketing should be predicated based on one thing and one thing only: bringing in new customers.
Your plan should identify the tools and tactics you will use to realize your sales goals. It is a conscious effort to establish a plan of action and generate leads that result in profit.
Neglecting to do so, for whatever reason, will only hurt your company in the long run. It is not a process that should intimidate anyone, but rather it should instill a sense of excitement.
Two essential marketing categories
There are essentially two categories in which marketing can be broken down: foundational marketing materials to create brand awareness and strategic direct response marketing campaigns to attract leads.
Foundational marketing strategies include, but are not limited to:
- Business cards
- Seller credibility packets
- Buyer credibility packets
- A core website
- An easy-to-remember phone number
- A memorable business name
- An attractive logo
These are the tools that will complement your respective marketing strategies, and these tools should be used — not exclusively — when meeting with sellers, buyers, lenders or anyone else you think could help grow your business.
The foundational marketing strategies will help you establish an identity within the community and credibility among your peers. Once everything is in place, you can move on to your direct response marketing campaigns.
Direct response strategies
Only once you have established your brand should you move on to direct response marketing strategies or those methods that target motivated buyers.
As such, they are specifically designed to elicit a direct response from the people you have already deemed your audience. In other words, they compel the right people to take action.
Here are a few of the direct response strategies I recommend:
- Direct mail
- Bandit signs
- Online lead capture pages
I recommend initiating anywhere from three to five strategic direct response strategies every month. That way, your business isn’t dependent on the success or failure of one particular campaign.
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There isn’t a business out there that favors the timid. The minute you identify a marketing campaign that works, scale and automate it as fast as you can. Once you have a system in place — execute it with precision and consistency.
I have placed an emphasis on marketing strategies throughout my entire investing career. They are, without question, the foundation of any business — and should, therefore, be treated as such.
Done correctly, a solid marketing campaign can propel any business to the next level. The alternative, however, can have an equally damaging impact.
To neglect marketing altogether is to practice ignorance — a mistake no business owner should ever make.
Than Merrill is the founder and CEO of FortuneBuilders Inc. and CT Homes. Connect with Than on LinkedIn or follow him on Twitter @ThanMerrill.