Whether you are barely starting a business or already operating a large one, it’s important that you have a simple marketing plan to grow your business. The first step to create a marketing plan is to do market research. Based on your research results (that include tangible market data and customer feedback), you then can craft a marketing plan.
In the last episode of Emprendedores on Discovery en Español, I sat down with Solange and Norah Briseños (mother and daughter, respectively), the owners of Venezuelan restaurant Mil Jugos, . Mil Jugos is a thriving business with a 4.5 out 5.0 Yelp rating and over 1,012 reviews. Despite Mil Jugos’ success, my market research suggested there were two HUGE missed opportunities at the restaurant: (i) creating healthier menu items for its younger clientele, and (ii) offering online ordering service, as this is a rapidly growing trend among restaurant consumers in the U.S. Based on these findings, we refined their marketing strategy so Mil Jugos is better positioned to double in size.
Do you want to get the same benefit as Mil Jugos? You can by learning how to do market research and creating a marketing plan. The good news is you don’t have to be on TV. Just keep on reading!
4 Quick Steps to Create a Marketing Plan
Step #1: Understand the Market Numbers
Ask yourself: what’s the size of your market? What’s the average age of your client? These are a few critical questions that will help you develop a marketing strategy. Even if you operate an established business, like Mil Jugos, you need to constantly refresh your market data as often as you visit the dentist.
One common mistake for sizing your market is assuming the total market potential equals the size of the industry. Avoid this mistake by considering who your customer is and where they find you. For instance, a local restaurant should size their market based on the population of the city where it operates.
Mil Jugos operates in Santa Ana, CA. To better understand the size of the market, I visited the Santa Ana Economic Development website, where I downloaded a research report on the population and its trends. In the case of Santa Ana, we discovered that the median age of the population is 29 years old. A very young and fast-growing population also known as Millennials!! We also discovered that Santa Ana is the most densely populated city in Orange County, which can be considered optimal for online ordering.
If you operate a local business, go to your city’s website and/or visit its economic development center. You may be surprised to find helpful figures to size your market. Google is a healthy alternative, but just make sure you are getting as close to the raw market data as possible. Don’t cheat yourself: getting access to the most accurate market numbers is the foundation for any marketing strategy.
Step #2: Talk to Your Customer
Sounds obvious, right? You’d be surprised how often hundreds of my business clients don’t create processes to get feedback from their customers. Sometimes, as business owners, we just assume that if people are buying our products and services, that’s enough customer feedback to keep on selling, right? WRONG!!
You should implement processes to get direct and indirect feedback from your customers.
Direct feedback is exactly what it sounds like: your customer tells you (and possibly the world), directly, what they thought about your product or service. One common example is online reviews on Yelp, Google, or Facebook. Mil Jugos does an amazing job getting customer feedback from Yelp.
Learn here how to create the best Yelp profile to grow your business.
When getting direct feedback from your client, you shouldn’t limit customer feedback to one-dimensional reviews like the one you get when asking to rank from 1 to 5 how they liked your product or service. Sometimes it’s more valuable to interview your clients.
Here’s a bold suggestion: invite 5 of your customers to a cup of coffee.
During these customer interviews, you can ask them about what they liked and didn’t like, but you can also ask your customers what they would have changed. Most importantly, I suggest you to spend a lot of time learning why the customer decided to work with you instead of the competition. And, how did they make that decision?
At Camino Financial, every 3 months Kenny and I visit 5 to 6 members to understand how we can improve our advisory and lending practice. The feedback has been transformational to our business. I have also learned our members REALLY appreciate it when we LISTEN to them!!!
Now let’s talk about indirect feedback. Indirect feedback is received when a customer does not tell you directly about their experience, but you can learn from their behavior. Customer referrals are my favorite indirect feedback metric. Ask yourself: what percentage of your customers come from referrals?
For a customer to refer new business, this basically means that your product or service is so amazing that they want others to join in on the experience. Imagine a world where for every new customer you get 1 or 2 new referrals. You’d grow fast, like let’s say, FACEBOOK!! This is exactly how companies like Facebook and Instagram grew so fast. Whether you are a tech company or a restaurant, make sure you deliver the best customer experience that creates raving fans, who will help double your business.
Another great indirect feedback metric is repeated business: what percentage of your sales come from repeated business? Make sure that once you’ve earned a new customer, he or she comes back again and again and again. This way you build a business that has compounding revenue growth year over year.
Learn here about the benefits of getting to know your customers.
Step #3: Know Your Competition
Don’t ever underestimate your competition. Everyone competes against someone or something. As you do your market research, identify those you compete against. How are you different? What sets you apart? Make sure you that you are very honest with yourself when answering the question about how you are different. If you truly aren’t different, then it’s more likely you are competing against price, which is a slippery downward slope for the profitability of your business.
Compare your gross margins against those of your competitors. If you don’t know your industry gross margin, go here: http://www.bizstats.com/. Make sure that you are earning as much profit as your competitors. If not, then something is wrong and you need to dig into this issue deeper.
Need help digging into the numbers? Speak to a Camino Financial business expert today by registering to our incubator here.
In the case of Mil Jugos, it may be the only Venezuelan restaurant in Santa Ana, but it also competes against other restaurant options, whether its pizza or Chinese food. Even scarier, Mil Jugos competes against dining in at home. The worst type of competitor is a “do it yourself” competitor. It’s usually cheaper or more convenient to dine in at home. This is why it was important that Mil Jugos offered online ordering for those who are looking to eat great Venezuelan food but prefer to do it at home.
Step #4: Create a Marketing Plan
Now that you’ve sized your market and learned from your customer, it’s time to create a marketing plan or a 3-to-5 bullet plan on how to grow your business.
For this, you need to map out your customer’s “decision-making process,” or how they made a decision to purchase a product or service. For instance, most people do research on Yelp before they try a new restaurant. When they go to Yelp, customers typically filter down their options based on the food category, zip code, price, and ratings.
Once you have identified how your customers make purchase decisions for your product, then you can create a 3-to-5 bullet point plan around the HOW to bring them back again, and HOW to attract new customers. In other words, HOW to start growing your business. Ultimately, every marketing plan should help you build customer referrals since this is the cheapest and fastest way to grow your business. Here is an example of my suggested marketing plan for Mil Jugos:
- Build a Yelp profile with reviews above 4.5 stars
- Create healthy menu options for younger, health-conscious customers
- Give customers the option to order online
- Earn your customers’ repeat business
- Make customers your BIGGEST fans
Depending on the size and complexity of your business, it’s possible that you have different marketing strategies for different types of customers. The goal under all circumstances is to keep the plan simple. The more complicated it is, the less likely you will be able to execute it.
Good luck with your marketing plan! And remember: if you ever need a helping hand, contact our business experts at Camino Financial here.