Keynote speech given by Ron Blue to the Danville, IL Economic Development Breakfast, 1991
I’m very excited about being here this morning to speak to a group who I place high on a pedestal. I have deep admiration and respect for small business owners and associates who embody and entrepreneurial spirit.
According to Ellen Hurley, our own director of Danville Area Small Business Center, in a recent article points out that small businesses employ 53 percent of the private work force, contribute 42 percent of all sales in the country, and contribute 33 percent of the entire gross national product. In addition, small businesses have been responsible for more than half of the new products and service innovations developed since World War II. I think effective marketing planning can only improve upon these statistics.
Ten years ago, you probably wouldn’t have had an ophthalmology administrator or any type of medical practice administrator speaking to you about marketing.
But in the highly competitive world of medicine, marketing is not only necessary for long-term success, but for survival itself. And it’s really no different with any other business.
I’ll ask you to recall the fable about the goose that laid the golden eggs. In the story, the farmer, after discovering that his goose could lay golden eggs, killed the goose hoping to gather all the eggs at once. In doing this the farmer assumed that no more golden eggs would ever be produces. The greedy farmer literally cooked his own goose.
The moral of this fable rings a familiar bell. Each of us in this room either owns a goose or is charged in some way to take care of one. This goose I’m speaking of is, of course, our business. And the golden eggs are, you guessed it, our profits. So it stands to reason—if we can nurture this goose, keep it healthy, allow it to grow strong, we will reap the rewards of success. On the other hand, if we neglect or abuse our goose, it will get sick and lay fewer eggs, or no eggs at all, or perhaps the goose will die.
Well, I like to think of marketing, in general, and marketing planning specifically as a nutrition and wellness program for our goose—to keep it well and fit.
Developing and implementing a solid marketing plan will assure that our goose is healthier than those other barnyard geese.
Before we can design or implement an effective marketing plan… we first must understand what marketing is. A preacher I know also believes in the power of marketing and advertising. And so he put up a sign in front of his church which read, “If you are tired of sinning… please come in!!!” Apparently, however, and enterprising member of the congregation saw this as a marketing opportunity himself, and scribbled on the bottom of the sign, “If you’re not…. please call 443-2244.”
I define marketing as the dynamic process of building your business through gaining new customers, while at the same time retaining and maintaining the customers you already have. We have to be careful to differentiate the term “marketing” from the term “advertising.” Advertising is merely a function of marketing.
Advertising is a very small part of the total marketing picture, although it certainly is not the least expensive.
So, getting back to our definition of marketing, it is easy to see there is much more to marketing than advertising.
I like to think of marketing as a two-fold process, the first being internal marketing and the second being external marketing. Let’s look for a moment at what comprises internal marketing.
Internal marketing is anything that you can do within your own business to gain new customers and to keep current customers. And I want to emphasize keeping current customers. It’s much less expensive to keep a current customer than to attract a new one. (Examples of Internal Marketing)
Other forms of Internal Marketing:
- Thank you notes
- Birthday cards
- Newspaper clippings
- Staying on time
- Informational brochures
- Press releases
- Key chain story
The most powerful result of effective internal marketing is the most overlooked, particularly in service companies, is the power of positive word-of-mouth referral. Simply put, stimulating positive word-of-mouth boils down to creating satisfied customers, create satisfied customers by providing extraordinary service. Before we can satisfy our customer we first must know what they expect.
In order to be satisfied, customers only want four things:
- They want friendly, caring service.
- They want flexibility in your policies and procedures
- They want you to be able to solve their problem quickly.
- They want you to be able to recover quickly when you make a mistake, and to admit it when you goofed.
If your business can cover these four bases with your customer, you will definitely have people out there talking positively about you and spurring word-of-mouth.
You see, it is very difficult for any business to be 100 percent better than their competitor in any one given area. For instance, in eye care:
A pair of eyeglasses is pretty much a pair of eyeglasses. Frames are readily available at many different locations. Lenses and lens material is really pretty limited. So, at the core, our product is pretty much the same product you get at our competitor’s. It’s the perceived value of those glasses that is important. It’s the intangibles that make the difference. We can’t be 100 percent better at providing a pair of eyeglasses. But if we can be just 1 percent better at 100 different aspects, then the net result is the same.
A rule of thumb: If a customer has a good experience, he will tell three other people. If he has a bad experience, he will tell ten other people. (Service Edge Stats…)
So internal marketing really deals with intangibles. If we can enhance the perceived value in our customers’ minds by going the extra mile to provide extraordinary service, we are creating word-of-mouth marketing.
The most critical component to creating word-of-mouth is having well-trained, enthusiastic staff functioning in an environment that makes it easy for them to buy-in to what they do. Let’s face it, the people in the front line are your business. If a customer is treated rudely, it’s your business that gets the rap, not the individual.
Keep the front line happy and you’ll keep your customers happy.
Most business owners overlook training as being a form of marketing. But we believe it is.
If your front line people are not having fun, if they don’t feel good about what they do, if they don’t feel they are adequately trained, if they don’t feel they are being reqarded fairly, getting positive feedback and recognition for the good things they do, they how can you expect them to be enthusiastic about providing extraordinary service to your customer? Your front line people are your ambassadors. They engage in marketing every day.
Extraordinary service stands out. It makes an impression. It spurs word-of-mouth.
I can think of no niche more powerful than being known for extraordinary service.
The second aspect of marketing is external marketing. External marketing is what most people believe to be marketing. It’s the advertising. It’s direct mail. It’s TV advertising, it’s newspaper ads, it’s open houses, it’s seminars, it’s radio.
Don’t get me wrong, there’s definitely a place for external marketing in any organization or small business. I’m simply saying that your internal mechanism has to be fine-tuned in order for external marketing to really be effective.
I’m also suggesting that, as I mentioned earlier, it is less expensive to keep a current customer than to attract a new one. Yet the tendency is to place emphasis on attracting new customers. (Case in Point: Keychain-Car)
If you do have your ducks in a row within, then a well orchestrated external campaign can produce major positive results. And planning an external marketing campaign is a talk in itself.
But I do want to mention a few factors you must take into consideration before launching an advertising campaign.
- Advertising in itself promotes word-of-mouth.
Advertising entices people to ask about you, so if enough people have had negative experiences with your company, advertising could backfire. (Back log example)
- Advertising must be backed up by a well educated and trained staff.
How many times have you responded to a special offer presented in an ad and have the person you’re talking to say, “I’m not sure” or “I don’t know anything about this.”
It’s a real turn-off.
- Timing must be right, or you will end up spending money to turn people off.
(Counterproductive. Marketing to senior citizens in the middle of winter.)
- Episodic, skimpy advertising strategies don’t work.
It’s better to do one or two well orchestrated, well targeted six week campaigns than to advertise sporadically throughout the year.
- The more target specific the better.
- The competitor can copy can everything you do. First kid on the block wins.
- Measure results. Make sure there is some kind of response element so you can tell if you’re getting results.
Of all the forms of external marketing, the one I recommend as being the most powerful is face-to-face communication. A face-to-face meeting in the form of seminars, talks, presentations, can have greater impact than an avalanche of advertisements, press releases, memos, and brochures. Face-to-face communication is much more likely to gain commitment, support, and understanding. Obviously, face-to-face isn’t for everyone but it works well for those who choose to engage it.
According to Regis McKenna, marketing guru for the computer industry, in his book The Regis Touch, advertising can reinforce positions in the market, but it can’t create positions in the market, companies must first build strong relationships. They must build relationships with suppliers, with distributors, with retailers, and with the financial community. They must take advantage of what I call the industry’s infra-structure.
That is, the key people in companies that make the industry tick. Ten percent of any given infra-structure influences the remaining 90 percent. So the key is to build relationships with the ten percent that influences the other 90.
Marketing should be a building process, not a promotional process. Advertising cannot by itself create your image, it can only enhance it. All the things that you do in your marketplace, this is your image.
Why is it important to have a marketing plan? As Casey Stengel of New York Yankee fame so eloquently put it, “If you don’t know where you’re going… you might end up somewhere else.” A marketing plan establishes a course to follow. By staying focused on your plan, you are less likely to react to what the other guy is doing. It allows you to devote your time and energy on positive activities that achieve your goals. It allows you recognize when you go astray so you can correct your course.
The planning process: There is a lot to be said for the mental process of putting together a formal plan and committing it to writing. Many of us who run small companies tend to do our problem solving on the fly. Writing out a strategy requires tremendous discipline, and sloppy logic is much more obvious when you see it in black and white.
In fact, one could almost argue that once you’ve written the draft of your marketing plan, you’ve already gained 90 percent of the benefit the process has to offer. To use a familiar cliché, we don’t plan to fail, we fail to plan.
Now that we have discussed why planning is important, let’s take a look at how we can put those ideas to work and formulate a marketing plan.
The key element to a marketing plan is addressing the issue of market positioning. Developing a strong positioning strategy is the key to marketing success. If you say “instant photography” to someone, they’ll probably think of Polaroid. If you say “innovative computers”, chances are they’ll think of Apple. If you say “high quality copying machines,” they might think of Xerox. Each of these companies has succeeded in positioning itself in the marketplace. Each has established a unique presence for itself and its products. That type of presence is a powerful force in marketing.
Indeed, at the heart of every good marketing plan is a good positioning strategy. Modern marketing is, to a large extent, a battle for positioning. All of marketing, merchandising, advertising, pricing, packaging, public relations—grows out of positioning. If a company’s products are positioned poorly, the rest of the company’s marketing strategy will be useless.
Let’s assume now you understand the market environment. You’ve surveyed your own house and know something about your competition. You must now decide on a strategy to get your products and service positioned within that environment. Coming up with an elaborate, massive planning document is not all that important. In fact, I feel it’s best to keep it simple with the focus on action. The reason for keeping the plan simple and action oriented is that elaborate marketing plans have a tendency to sit on shelves, gathering dust. People don’t follow them day to day. Weeks and months spent writing down ideas is a waste of time.
Rather, it is the ideas that are important. They key people in the company must converge on a common positioning strategy, then, put it into effect.
Let me repeat…
The most important thing is to identify a position, and second, to decide what actions are needed to achieve the position. It is not just a matter of coming up with a new slogan. The company might change its market direction, its target customers, its distribution strategy. It might even change the products themselves.
I strongly recommend that you and the appropriate members of your leadership team or executive committee conduct a planning retreat, with the primary goal being to discuss many of the aspects of internal/external marketing that I alluded to earlier. This interaction should be systematic, rather, more like brainstorming or free association.
The goal is to maximize creativity. Everyone tosses out ideas, then, others modify the ideas and add to them. Next, the group analyzes the input and formulates a consensus priority list, identifying key positioning strategies. So, out of this murky mess of information, a clear vision of the future has emerged. Not it is simply a matter of deciding what actions are needed to achieve the position. In other words, an action plan must be developed. In developing this action plan, several points must be considered.
- Divide the plan into external and internal components.
- State the goals in terms of the results you want to achieve, and not the activities you perform. For example, being nice to customers is a nebulous activity… reducing the number of customer complaints by 30 percent is a result.
- At first, strive for small successes. Concentrate on hitting singles, not home runs.
- Don’t try to do too many things at once… Stay focused on the most important goal.
- Assign realistic time frames and deadlines.
- Hold people accountable.
- Measure and track results. Bowling isn’t meaningful or fun if you don’t know how many pins you’ve knocked down.
Form is less important than the ideas. There are many formats—I have given you one idea—choose one that works best for you.
Will Rogers once said, “Even if you’re on the right track, you’ll get run over if you just sit there.”
What you do with the ideas is the KEY!
It’s not what you know but what you do with what you know.
I wish you luck in keeping your goose healthy.