In the previous blogs I had written on how marketing can avoid a revenue swings in startups and how marketing can drive revenue growth in mature companies. Continuing on the same line, I want to talk about some of the successful practices in mid-sized firms.
Success in Mid-sized firms
Startups and small consulting companies will eventually grow into mid-sized firms if they overcome the revenue swings and achieve a stable growth. Once companies become larger, the marketing management must also change. The marketing chief must now take on a strategic role and have a well defined marketing plan to take the company to greater heights. Having studied several mid-sized companies, I have identified three steps that are common and necessary for success of a firm:
- Have an planned budget for a marketing plan
- Identify and secure resources for implementing the marketing plan
- Define the metrics by which the success of marketing efforts are measured
I have seen that successful companies have incorporated these three steps into their marketing plan. To get a better understanding, lets take a closer look at each of these steps.
Have an planned budget for a marketing plan
This is the first step. Recall that in a startup, most of the marketing efforts was towards lead generation, lead qualification and closure. But as the company grows, the sales pipeline will become longer and wider - i.e., marketers will be able to identify more prospects and many of these prospects will have a longer time frame to buy from you.
Managing a large number of prospects will involve greater level of planning: Divide the market into finer segments, and then manage these prospects with on a long term basis till the sale is closed. Managing a long sales cycle will need a clear plan to move the customer closer towards closure in stages and identifying the key conditions to promote the prospect within the sales funnel or to drop the prospect from the sales funnel.
Prospects must be measured with a certain milestones - if the prospective customer achieves the milestone - then that account moves forward in the sales funnel, else it may get dropped or remains there or is moved backward in the sales funnel.
Selling to a long term prospect also involves proper positioning of the product/services to the customer. Small/Mid-sized firms often opt for multiple-positioning strategies based on customer profile and needs. The marketing plan must incorporate the positioning strategy which clarifies why customers should buy from you and how your offering is better and different from the competitors.
Developing this market positioning requires a good understanding of your target customer, their problems and needs, and then purposefully position your offer specifically to meet those needs. In short be Customer - centric.
This detailed marketing plan will need an approved budget. Longer sales cycle implies more marketing expenses: Travel, socializing, meetings with customer. These activities must be budgeted in the marketing plan. It is important to remember that longer sales funnel or longer sales cycle is impossible to sustain without a detailed marketing plan and the associated marketing budget. Having an approved budget will remove adhoc expenses and enables marketing to operate on a long term basis. Approved budget is essential for managing a long sales cycles. Remember: "Winners have a budgeted plan".
Secure Resources needed for marketing
In addition to a budget and plan, what other types of resources are needed? - People to support marketing & sales. In addition, one will need marketing tools - software & systems.
Marketing in small firms are usually handled by a lean staff - mostly of 2-3 people and in most cases non-marketers (or those without formal education in marketing or previous experience in marketing). Marketing staff are often supported by engineering, manufacturing, operations, logistics & other groups within the organization. This implies that the marketing head cannot be sure of the number of people he can count on. Added to this problem is attrition. Therefore head counts may be unstable - thus put the marketing plan at risk.
To overcome this problem, the marketing plan must cover the human resource issue. Attrition must be managed with better knowledge transfer and hiring plans. To manage the risk of attrition, the marketing head must share his marketing plan with his marketing team - including supporting members from other groups. This will create a situation that employees won’t quit during critical times - if they know the criticality of the issue.
Software & systems are critical in today’s e-Economy. When the organization was small Microsoft Office served the organization well. But as the company grew, new software tools are needed: CRM software, Sales management software, business contact managers, Web analytics tools, knowledge portals, pricing calculators, revision control software etc. These tools improve productivity and act as ‘force multiplier’. Software will help marketing department manage the wide and long sales funnels, help improve customer relationships and bring down the cost of lead generation, lead qualification and customer acquisition. Though the overall marketing expense increases, the marketing ROI increases.
Successful mid-sized organizations rely on IT systems too. Companies need to use Telecom conference, video conference, Podcasts, meetings transcription system, E-mail news letters, Intranets, secured Internet portals - for customers to interact with the firm, online training programs for sales representatives, etc. The use of such systems has to be carefully planned. Marketing systems may have to be deployed in a planned manner - based on the company’s unique needs, marketing budget and marketing plan.
Define Metrics to measure success
Marketing head in a mid-Sized firm need to have a marketing plan, an approved budget to implement the marketing plan, and resources to implement the marketing plan. All this is possible only if the marketing head can convince the top management that all these investments are really needed to achieve the business goals.
A good way to convince the management is to have a predefined metrics which will measure the success of the marketing plan. These metrics can then be used for making suitable corrections in the marketing strategy and plan - which can have substantial impact on the future marketing expenses (budgeted or not).
In other words, the success of marketing efforts must be monitored constantly and the marketing plans be changed accordingly. This can be done by having a clear and well defined metrics to measure the success of marketing efforts.
Common metrics to measure are:
- Number of new leads generated & number of qualified leads
- Number of RFQ/RFP received
- Market Share
- Number of quotations sent to customers
- Number deals closed in that quater
- Revenue realized & Bookings
- Number of new customers acquired
- Percentage of customer retention
- Customer satisfaction levels
Metrics chosen must be based on the marketing plan and must be directly linked to the marketing objectives, strategies and tactics. These metrics must be easily measurable, reported to the management leadership. These metrics help the marketing department make adequate changes in strategy, tactics and resources used - if needed to achieve the marketing goals. These metrics also help the top management make budgetary decisions on the future marketing plans. For example if a marketing promotion is not yielding the desired increase in revenue, then the management can shut it down.
Closing Thoughts
Marketing head and top management in a mid sized companies must realize that marketing is critical to their success and they have a responsibility to develop a workable marketing plan, allocate a marketing budget, dedicate the required resources and make the necessary investments. Marketing investments must be measured for its effectiveness and future investments must be planned based on the need and its ROI - and that can be done only by measuring the effectiveness of its marketing efforts.
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