Use Stage-Gate Process to Determine Best Marketing Strategies

Can you use the Stage-Gate process to choose a marketing plan? Well, if you’re new to this blog, then you may not have read the numerous posts where I’ve advocated matching a company’s inventory approach to its business model. Well, the same rule applies to deciding upon your company’s best marketing strategies. In this case, match your marketing strategies to your business model, your industry and your customers’ needs and requirements. This means using the Stage-Gate process to simplify how you decide upon a marketing strategy.

Companies love to emulate the success of others. They love the most recent success stories and continually gravitate to the newest twist on established strategies. However, the simple truth is that copying the success of another company has its pitfalls. It’s the reason why companies choose inventory management strategies that aren’t suited to their business model, the reason why they pursue sales strategies that don’t work in their industry and the reason why they use B2C (business to consumer) customer service practices when they should use B2B (business to business) customer service practices.

When using the Stage-Gate process, be sure to keep one thing in mind. Concentrate on doing what your market and customers need. Think of the best approaches to reaching your customers. Ask yourself questions about where these customers congregate, the information they need and how best to deliver that information. It may be tempting to emulate another company’s success, but it rarely produces the kind of results you're looking for. Here is the first step in the Stage-Gate process 

1. Define Business Model
2. Define Customer Needs
3. Determine Best Approaches to Reaching Customers
4. Analyze and Measure Success 

 

To benefit from some of the strategies described in the above video, please see: 5 Simple Approaches to Maximize Small Marketing Budgets

1. Define Business Model 

Aside from its benefits for choosing the best marketing strategies, defining your business model is an essential part of your company's overall approach to strategic planning. Defining your business model is paramount to simplifying how your company makes decisions. With respect to your marketing, start first by defining your business model relative to its industry, and the market you service. Some of the areas to look at might include the following: 

• Type of business: VAR (value added reseller) Distributor, Sales Agent, Outsourcing Firm, Manufacturer?
• Inventory & Lead Times: Do products have a lead time on delivery or are products made to order?
• Product Lines:Do you provide standard product lines or does your company do custom-made parts requiring NRE (non-recurring engineering charges) charges?

2. Define Customer Needs: 

Understanding your customers’ order patterns is paramount to success. Different markets have different business cycles and therefore different customer order frequencies. Defining your customers’ needs must involve defining how they purchase, why they purchase and how often they purchase. Look at your company’s business cycles and focus on whether your business is cyclical & seasonal or linear & constant. Some of the areas to look at include: 

• Order Frequency: Seasonal & cyclical or linear & constant? Or, does your company operate in both? For instance, some Telecom companies have Satcom sales that are cyclical, but wireless sales that are linear.
• Pricing: Commodity based sales where lowest price tends to win, or value proposition based sales where the product's cost-per-use and longevity are more important? Defining this criteria will help your company put a strategy together on how to approach potential sales with customers.
• Vendor-Customer Relationships: Do customers value relationships with vendors, thereby deciding to stick with what they know rather than risk an uncertain future with a supplier they’ve never dealt with? 

3. Determining Best Approaches to Reaching Customers: 

In this portion of the Stage-Gate process, focus on where your customers congregate. Some market players only get together at large trade shows, conferences or company sponsored getaways. Other markets have customers who are more easily accessible online or through certain publications. Define how best to reach your customers by identifying where your biggest players meet. Some of the questions to answer include: 

• Define Qualified Leads: Take the time to define what leads are important to your company in terms of the decision makers at certain accounts and the influential players. How will you reach these decision makers?
• Define Commonalities: What do all of these decision makers concern themselves with? What drives them and how do they go about making decisions? For instance, dealing with owners of businesses is much more involved than dealing with the head of procurement! 

4. Analyze and Measure Success: 

Now, by no means do I mean to imply that marketing is simple. It isn’t. However, the basic premise is simple and straightforward. To increase marketing ROI (return on investment) means to increase the number of customer leads generated per dollar spent on a marketing strategy. If you spend $10.00 on a given marketing strategy and it produces 20 customer leads, it doesn’t have as good an ROI as one where you spend $10.00 and produce 40 customer leads. Marketing’s goal is to produce as many qualified customer leads as possible. Your sales goals are to close as many of those leads as possible. Again, here are some questions to focus on. 

• Marketing ROI: Determine which marketing strategies produce the most qualified leads per dollar spent.
• Track Marketing Objectives Quarterly: How many leads are generated by month and by quarter and what if anything can be done to improve them?
• Develop Marketing Budget: Determine marketing expenditures as a percentage of sales and isolate the least expensive way to increase qualified leads. (for a sample budget like the one below, click on this post: Sample Marketing Budget Excel Sheet: Graph & Pie-Chart of Expenditures)

When using the Stage-Gate process to determine your company’s best marketing strategies, it really does become a continuous process. In essence, consider the entire approach a constant feedback loop. Success in marketing requires the willingness to stick with a plan to its successful conclusion and then assess the success or failure of the entire approach.

Define your business model, your market and your customers’ needs. Define how best to reach your customers and track the performance of marketing strategies (marketing ROI) relative to the number of qualified leads per dollar spent. Finally, use a marketing budget to measure your expenditures as a percentage of sales. Success means you've ignore outside influences and focused entirely on a strategy that matches your company's and your customer's needs. 

 

Comparing inbound versus outbound marketing strategies.