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This is the eighth episode in our series about selling without being fake. In this episode, we talk about how to create a market posture and strategic marketing budget for your business.
Podcast Transcript:
Joshua MacLeod:
We started Growability because of the statistic that 8 out of 10 small businesses fail. Well, the two that don’t fail, always understand their market. They’re not just thinking about, “What do I want to do?” They’re thinking, “Are there enough customers out here to have another AC unit place in town? Are there enough customers out here to have another ice cream shop in town?”
Podcast Announcer
Welcome to the Growability Podcast, teaching business and to nonprofit leaders, a more excellent way to run a business. Visit growability.com for your leadership, coaching consultation and business collaboration needs. This is the eighth episode in our series about selling without being fake. In this episode, we talk about how to create a market posture and strategic marketing budget for your business. Here are your hosts, Joshua MacLeod & Bernie Anderson.
Joshua MacLeod:
There’s four different ways that you can present yourself to the market, for four different ways that you can see yourself in order to present yourself to the market. The first is the leader. The leader is like where the biggest billions and billions of customer served. So the second posture is the challenger. We are not the McDonald’s, we’re the king of burgers, we’re Burger King. So you’ve got the leader in the hamburger space and then you’ve got the challenger in the hamburger space. Now the third posture is the, why pay more? We were talking about Oreo cookies and then right next to them, they’re like chocolate sugar wafers with a cream center. Very similar cookie, cheaper price, why pay more? So a lot of brands come to the market as the, why pay more? The fourth posture is the niche.
Joshua MacLeod:
We only do just this one thing and we do it better than anyone else. You’ve got to figure out from a posturing standpoint, how are we going to communicate who we are to the market? Are we going to dominate? Are we going to challenge the organization that’s dominating? Are we going to be the price leader or are we going to be the unique specialty organization? So if you clarify how you’re going to posture yourself, then you have a really good foundation for the message of bringing who you are into the market. If you don’t clarify how you’re going to posture yourself then a lot of times your marketing message will be cluttered.
Bernie Anderson:
If you are a heating and air conditioning company coming into a smaller market and if you came in with a large startup budget where you could put in like all kinds of advertising, you blasted all the radio stations, the internet, billboards, like everywhere, you could come in and posture yourself as a leader if you had the startup resources to actually do that.
Joshua MacLeod:
That’s exactly right.
Bernie Anderson:
Yeah.
Joshua MacLeod:
So if I go into the market and I’m like, I’m living in Smithville, Georgia, and I want to start a heating and air company and I do the research and there are 16 heating and air companies in Smithville, Georgia and one of them has 80% of the market share. And there are 15 little guys that are competing for the 20% that’s left. And I want to jump into that market as one of the little guys, that’s not a really good idea. It may be a good idea if I say, “You know what? The number one group is way overcharged and I have $50 million and I’m going to take over from their group and I’m going to take 40% of their client base to me and I’m going to be the challenger in Smithville.” Well now, okay, I’ve got an idea, but it’s not a good idea if you’re a little guy that’s competing with a bunch of other little guys.
Joshua MacLeod:
It might be a good idea if you’re a bigger guy that you can compete with the one big person at the top. So the first step of marketing is really to research and understand the market. Are we the new sheriff in town? Are we the leader? Are we the challenger? Are we that person that says, “We’re going to knock you off your pedestal.” Are we the, “Why pay more? We’re going to come in and be the price leader that takes over,” or “We’re the niche market. This is what we’re going to do.” Now I can start thinking about a website. It’s the difference between… Well, we started Growability because of the statistic that 8 out of 10 small businesses fail. Well, the two that don’t fail, always understand their market.
Joshua MacLeod:
They’re not just thinking about, “What do I want to do?” They’re thinking, “Are there enough customers out here to have another AC unit place in town? Are there enough customers out here to have another ice cream shop in town?” If you ignore the market, I’m not saying that you can’t have a great little business. I’m just saying you won’t ever have a great big business. Because there’s a big difference there the people who expand their territory and grow to their full capacity do so by understanding the market and then doing what is necessary to gain market share.
Bernie Anderson:
And the best way do that, Joshua, is the competitor analysis, customer interviews, all of those things, and then deciding how you’re going to posture yourself coming into the marketplace. So that’s where marketing starts.
Joshua MacLeod:
Most people assume that the first step in bringing your product or service to the market is getting a website.
Bernie Anderson:
Yes.
Joshua MacLeod:
Getting a website is actually step four. So step one is going to be research the market and see who is providing a similar good or service in your market. Step two is to define your competitive convenience or consistency advantage. Step three is to define your market posture, how you are going to present yourself to the market. And then step four is to actually utilize the marketing services available to bring who you are to the market. And when we talk about bringing your product or service to the market, we like to use the acronym WEBCASTS, which is a really good of acronym that you might use to develop a marketing budget. So I’ll walk through all of the different-
Bernie Anderson:
Just to be clear, these are the tools, these are marketing tools at this point. Right?
Joshua MacLeod:
That’s right. Okay.
Joshua MacLeod:
So the W in the webcast stands for websites and SEO. E is events. The B is for branding and photography. The C is CRM technologies. The A is advertising and media. The S is social and publicity, social media and publicity. And T is team culture. And then the second S is sponsorships and charity. Let’s say I have a $20,000 marketing budget. I want to break that marketing budget down into WEBCASTS, W-E-B-C-A-S-T-S. Website and SEO events, brands, and photography, CRM technology, advertising and media, social media and publicity team culture, sponsorships, and charity. Marketers assume that the product that they’re offering is the silver bullet to every marketing need that every customer ever needed ever.
Bernie Anderson:
Do you know what you need? You need the Google AdWords. The Google AdWords is going to revolutionize your business.
Joshua MacLeod:
Well, I sell tractors. Google AdWords, it’s going to revolutionize your business. Okay, The publicity person, you get this article in the magazine or you talk on Oprah and it’ll revolutionize your tractor business. Now, I only distribute to one county. So I’m not going to spend all my money trying to get on Oprah for selling tractors.
Joshua MacLeod:
So it really is before you spend any money on marketing, I think you should figure out how much you’re going to spend on marketing in general. To do that you’ve got to figure out what different customer types do you have using your customer persona sheet that we were talking about before and how much revenue does each of those customers bring to your market. If I don’t have my customer persona figured out, and I don’t know how much money is a reasonable spend for me to bring my product to the market and let my message actually be understood by my customer, then I can’t really create a marketing budget and I’m just throwing money out in hopes that it’ll work.
Joshua MacLeod:
It’s like the marketing lottery. You might win the lottery and get a really good thing that hits that’s the ideal spot for your business at the right time. But I don’t like the lottery. I’d rather have a strategic plan and I’d rather look at marketing on the whole and figure out exactly how much I’m willing to spend as a company, what’s appropriate for me to spend as a company, and then divvy that budget up and spend it effectively.
Bernie Anderson:
In the Growability, for those who are familiar with the Growability model of doing business, we have 12 fundamentals. Number 12 is WEBCASTS Marketing, marketing tools will help you with that. There are actually 11 other things that come first. People feel like their biggest problem is marketing and there could very well be don’t get me wrong. There could be marketing problems that need to be solved or resolved. But what I find is that you don’t really have your customer personas, you haven’t figured out who your customer is, or you don’t actually know what your vision is and what the value that you want to actually bring to the marketplace, you don’t know what that is. We all feel like marketing should be the solution to our problems. We live in a culture where we’re told all the time, “Market better, market better, market better.” Social media is become so much a part of our lives and it’s all marketing. So we assume that’s the answer. And the reality is it’s just a small piece to something that’s much bigger and more complex.
Joshua MacLeod:
Although on the other hand, Bernie, at the same time marketing is the only piece that connects with our customer. Even though it’s a small piece of our business strategy overall, it is that piece that actually is the first introduction to who we are as a product. So organizations that want to double or triple the size of their organization, you can’t do that without good marketing. And you can’t do that unless you spend marketing on the right things for your customer and the right things that impact your particular market.
Bernie Anderson:
Well, and what I love about what we do with this, Joshua, is if there’s someone listening right now, that is like, “How do I know where I am? I don’t think my marketing, there’s something not working”. And oftentimes people don’t really know exactly what that is. And that’s where you become susceptible to the Google AdWords sales guy who says, “Oh Google AdWords, it’ll solve your problem”. And I think having some outside help and assessment to figure out, “Oh, this is where I’m missing the mark,” or, “This is where we need to do some extra work.”
Bernie Anderson:
Having a marketing assessment that we can actually provide for you is a really great idea for that.
Joshua MacLeod:
Hands down.
Bernie Anderson:
Well, I did want to mention and while we’re kind of talking about this, one of the things that we do at Growability and how we teach business owners and leaders, nonprofit leaders, more excellent ways to run your business, we do this by bringing together a community of people to go through an entire year of learning together. And I just wonder if you could take a second to talk about Growability collaboratives and help our listeners understand what that is.
Joshua MacLeod:
Yeah. There’s three problems that every entrepreneur will face. One is, I don’t know what I don’t know. Two is, I know that I don’t know that I don’t know. And three is, I don’t want anybody else to know that I don’t know. So what we’ve found is that the best way to train entrepreneurs how to run their business more effectively is with other entrepreneurs. So if you get people together who are facing the same problems that you’re facing, and you guys work together on really growing your business and your organization, there’s no better way than group training. The second thing is we can bring the cost of consultation down by like a 10th, because we have a group of people working together. So instead of having to pay a consultant to come and work with you on your business, you get the exact same tools that the consultant use, but you get it in a group.
Joshua MacLeod:
So the collaborative is a one-year program where you’re working together in a group for four hours every month, and then you can interact with the other group members in between. So Bernie, we’ve had different versions of this class. I like to do four hours all at once. It’s half day, get it over with, and then interact between the do your homework. Bernie likes to do often two-hour classes. It’s two hours every two weeks and work through the program. So we have these in-person and we have them on, I guess, Bernie we’re starting one year in the next month. That is a Zoom version where you can just Zoom in. So email bernie@growability.com and ask about the ridiculous discount for podcast listeners for joining the online collaborative.
Bernie Anderson:
We’ll see you soon. Have a great week.
Podcast Announcer:
Thank you for listening to the Growability Podcast. The mission of Growability is to equip leaders to flourish in their life and work by developing vision, rhythm, and community. To discover if there is a more excellent way for you to run your business, visit growability.com and speak with a certified Growability coach. Bernie and Joshua are also available for speaking engagements, workshops and conferences. Subscribing to this podcast helps Growability equipped leaders throughout the world, and we appreciate your support.