8 Strategic Marketing Fundamentals to Drive your 2023 Business Plan

How Confident are you in your 2023 Marketing Plan?

It’s been my experience that?CEO’s are frustrated because they don’t see marketing as a key driver of their business.

CEO’s view the marketing department as a slot machine;?lots of activity, bells and whistles, flashing lights, excitement, but $93 comes back after $100 goes out;?no measureable results or real demand creation.

As you finalize your 2023 Marketing Plan;?here are recurring and common mistakes?I’ve seen by companies large and small.

A marketing plan is a spending plan;?bad plans lead to ineffective marketing – here’s a framework to get to a better place.

·?????Your marketing plan should prioritize your spending?and steward your company’s limited resources.?Marketing is the second biggest variable expense?– no wonder CFOs advocate for fewer marketing dollars.

·?????Every marketing plan is a tradeoff of resources?between optimizing value from existing customers and capturing new customers.?A poorly written plan will over-invest in “lead gen.”

·?????Poorly written marketing plans?annualize activity over purposeful marketing?(long on “what,” short on “why”).

·?????Define your sales strategy, leverage core strengths, communicate your story, create demand, cause action, and drive growth.

·?????Connect your business vision and growth strategy; optimize customer value to create new pipelines of prospects.

·?????Begin with?a clear understanding of “what drives your business.”?(Cornerstone of annual brand reviews at Kellogg).

·?????CEO’s need strategic marketing plans.?When someone inexperienced is tasked;?the outcome is activity vs. purposeful marketing.

·??????A successful marketing plan begins with a blank sheet of paper.?Don’t just update last year’s plan. Design from scratch a marketing plan to significantly change the sales trajectory.?What’s your +20% marketing plan look like?

Purposeful marketing connects your company’s Reason for Being, with your customer’s Reason for Need, and your Reason for Profit into a Reason for Belief.?

Fundamental #1:?Marketing Needs Quantifiable Business Goals

·??????Identify the “big rocks” your marketing needs to address?(e.g. sales, margin, share, visit frequency, etc.)

·??????Fuzzy goals = fuzzy marketing

·??????Goals need to be in tight alignment with the business model (how $ is made).

·??????Goals need to be specific, measureable, and numerical.

·??????Spell out your marketing priorities, in order – what will and won’t be funded.

·??????Create mile markers?detailing what’s going to be done, when, by whom. (Guy Kawasaki in?Art of the Start)

A pharma company we partnered with had a break-even of four years for new products; yet consumers moved out of the purchase cycle after 18 months.?More marketing dollars towards prospecting only drove profit reduction vs. improving sales channel effectiveness and retention.

Fundamental #2:?Marketing Needs to Create Demand

·??????Two basic marketing strategies: 1) Sell more to existing customers (farm), or get new customers (hunt); and 2) Don’t undervalue existing customers and their value potential.

·??????Sales support isn’t marketing?– Marketing helps the sales force by creating demand.?Don’t make your sales force carry the entire burden, your cost per sale will be higher.

·??????Understand what you are promising?– Boil it down to less than five words (one idea).?Crest prevents cavities, BMW creates driving excitement, Disney delivers magical memories.?

·??????Your promise (Reason for Being) needs to align to how your customers use you (Reason for Need).

Steak ‘n Shake doesn’t sell hamburgers, they sell steak burgers (made fresh, not frozen).?When they launched a recent new product – it was a “prime steak burger.”?Open up their menu and you see steak burgers and milk shakes.?They know what business they are in, why customers visit them, and where to focus.

Fundamental #3:?Align Marketing to What Drives Your Business

·??????Where do you create the most value for your customers (and why they value it)?

·??????What drives consideration?

·??????What drives conversion?

·??????Category trends impacting your business (positively and negatively)?

·??????Where is category growth taking place (and why)?

·??????Are you a challenger brand (taking business from market leaders)?

·??????Are you an establishment brand (vulnerable to challengers)?

·??????Understand your “Hedgehog” (Good to Great?by Jim Collins): the intersection of what you are best at, where your passion is, and what drives your business.

When the merchandise isn’t appealing, more marketing is spent incenting (bribing) current and prospective customers that wouldn’t visit without the deal.?When the Gap, JC Penny or Sears advertises “everything in the store is 50% off” it’s evidence their product and pricing strategy isn’t effective.

Fundamental #4:??Marketing Needs to Optimize Your Most Valuable Customers

·??????Customers aren’t equal; don’t treat yours the same.

·??????Many customers aren’t profitable; only a few (20%) drive all the profit.

·??????Your best, most profitable customers, use you differently from the rest of your customers.?

·??????How do your “next best” customers differ from your “best” customers; how do you engage them differently to optimize value?

·??????What vector points create the most value with your most valuable customers?

·??????Don’t chase non-category users; you don’t have enough money.

·??????Get your best customers to use you more often and you will more than double your profits.

Burger King advertised low fat fries and McDonald’s promoted salads; both products have nothing to do with connecting their Reason for Being with their customer’s Reason for Need.

Fundamental #5:?Marketing Needs to Follow: “Best First Dollar Spent”

·??????“Best First Dollar Spent” comes through a process of concentric circles.?You already have a customer in store – if the first dollar spent is within your four walls, what drives incremental sales? Likewise, will a dollar spent driving current customers who live within five minutes of your store be a higher ROI dollar than driving new customers (never tried, no awareness) who live more than five miles away?

·??????Commit to “Best First Dollar Spent”?- if you only have one marketing dollar to spend,?where is the greatest ROI??Determine this after you have an understanding of your Business Model, Business Plan, Reason for Being, Reason for Need, Reason for Profit, Brand Promise, and the Role of Marketing.

·??????Best First Dollar Spent will help you prioritize. Avoid the common dilemma of not enough marketing dollars chasing too many initiatives.?Confusing effort with results is the fastest way to a marketing plan that annualizes activity without any purpose.

University business models are optimized when students graduate.?Overspending on lead generation as opposed to creating graduates (high value customers) results in students who leave prior to “break-even.” This miss-allocation of marketing drives lower profits.

Fundamental #6:?Marketing Needs to Focus?

·??????Focus on fewer customers, initiatives, and products:?The big strategic mistake is approaching marketing as an additive proposition – “We can do that too!”?

·??????The new media landscape efficiency comes from precision ($ to few)?vs. the old media landscape where efficiency was tied to scale ($ to many);?New media and marketing technology enables marketers now to scale precision.

·??????Don’t overspend or underspend to the opportunity -?Understand when your business activates - not all months or weeks are equal; don’t overspend during an off-season nor over-spend during a peak period.

A used car lot that focuses on originally restored pre-1960 Corvettes (selling for over $150k) will spend less on marketing than your neighborhood car lot with makes, models, and prices all over the place.?

Fundamental #7:?Marketing Needs to Create a Knowledge Loop

·??????Capture customer insights –?Have conversations with your customers to capture insights.?Create Customer Advisory Panels (in person or on line) to tap into what they want changed, and unchanged.

·??????Turn data into knowledge into action –?Marketing plans that drive profitable business come out of evidence-based conclusions.?Most companies collect data; few companies successfully convert their “information overload” into actionable knowledge.

·??????Listen to your sales force –?Your successful sales folks are listening to your customers daily. Convert their hard-earned wisdom into smarter, sharper, customer-focused plans.

·??????Create Learning Labs?– Use 2023 to “test-drive” initiatives that can be successfully rolled out in 2024.?If future year’s marketing plan is built on proven-sales building strategies and tactics, your plan will be successful.

When Taco Bell advertises a new product concoction out of the same five ingredients, but with a new name, they are speaking directly to their heavy user.?This heavy user is also a category heavy user looking for variety.?Taco Bell uses “new product news” to drive visit frequency among their most valuable customers.?

Fundamental #8:?Marketing Needs to Manage Expectations

·??????No miracles, lots of spade work?– What “works” for one business might be totally ineffective for another business; your marketing should be the outcome of lots and lots of testing. Find what works, then find something that works even harder.?Marketing technology makes it easy and inexpensive to A/B test everything.

·??????What the marketing plan will and won’t fund?–Your marketing plan needs disciplined priorities to eliminate funding for initiatives you can’t afford.?The last page of your marketing plan should be a recap, in order of priority of each strategy (and cost) and those initiatives that won’t be funded. Your executive team needs clarity and alignment with your recommendations.

·??????Sales projections tied to marketing initiatives?– You need to know, and your Exec Team will insist on knowing, the corresponding sales projections (lift) for each marketing initiative.?This is another reason to create “learning labs” so you can measure impact.

QuikTrip -?a convenience chain delivers “get it and go.”?Real Estate, operations, HR, merchandising, and marketing are all aligned to make your trip “quick.”?Visit a QuikTrip and meet employees who have a tremendous sense of urgency.?Product, price, promotion, place align to drive the brand promise.

It’s not too late to improve your 2023 Marketing Action Plan for success.?When this aligns into a larger strategic thesis, vision, and plan, your?marketing will to drive your business.

About David

This article is an early chapter in Dave's upcoming book: "High Performance Strategy: Connecting Vision to Strategy to Plan"

Dave works with senior executives on sales, business development, marketing, and growth strategy. During strategy season, he's leading client work sessions. He’s a?Partner at WizeWebz, a business growth consultancy that helps clients get to their next stage of growth through smarter business, marketing, and technology strategies. https://www.wizewebz.com

Dave is also the?CEO and Co-founder of High Performance Marketing Boot Camps.?These are customized to help senior executives get smarter and more effective with their marketing and business:?https://highperformancemarketingbootcamps.com

In his spare time, Dave teaches advanced brand strategy, marketing, competitive strategies, and entrepreneurship in the MBA programs at the?University of Missouri and The University of Kansas.

“David Patrick is legendary for two things: deep marketing expertise and extraordinary teaching skills.?My experiences as his student and collaborator have educated and inspired me.”?Jack Mackey,?Former Chief Evangelist, VP Customer Engagement, Service Management Group??

“David Patrick is masterful at understanding the strategies that unlock growth. He’s able to apply those learnings to a variety of industries and help executive teams approach marketing in a new way to achieve greater results.”?Laura Scobie, SVP Strategy, Barkley

"David Patrick's knowledge and experience in marketing is deep. I find he has wisdom and case studies for almost every conceivable situation. Always a pleasure to spend time with David and listen to his insights and perspective on business and marketing challenges. If you are considering David and his team to help with your marketing strategy you should do so with confidence."?Grant Gooding, CEO & Founder of Proof Positioning