Tag Archives: Target Market

3 Golden Rules of Pricing for Value

For any business setting the price of your products is one of the hardest decisions that you have to make (along with picking a brand name, choosing the logo colour, deciding on your range…!) There are a few different approaches that you can take, but the most important thing you need to do is build value. This post will discuss the role of value in pricing and show you the 3 golden rules for building your price on a value proposition.

What is Value?

Value is a perception. It’s the reason why a well cut, good fitting little black dress for $150 can be as savvy a purchase as buying 3 tanks for $20. The price paid is considerably different, but so is the expectation of quality, enjoyment and longevity. Value is the combination of all our feelings towards the item we are purchasing. To set the price, we need to understand the value of our product to our consumer.

Many years ago I was the category manager for a premium cosmetics and perfume company. When it came to setting the price on skin care products that were perceived to rewind the aging process, we set the price by analysing what the consumer would pay, based on what it was worth to them – the value they saw in the product. The product cost was around $10, yet the consumer valued it enough to be willing to pay well over ten times that amount.

In our post “How to Measure Success” we looked at how to analyse your gross profit and your wholesale margin, which are both valid ways to set your retail price. But some products are worth far more than they cost to produce, be it because of desired design, quality workmanship or inherent benefits, and this is where developing your price model around value is most beneficial.

3pricing for value profit margin Golden Rules of Pricing for Value

1.       Understand Value-Based Pricing

When you set price using a value based model your objective is to determine the level of satisfaction a customer derives from your product and what price they are prepared to pay for it. How valuable is the solution your product brings to their life? How long do they perceive it will last? How important are the attributes to them?

Defining value includes analysing tangible and intangible attributes – that is what we can and cannot touch. The price of a Mercedes-Benz is set by what the brand believes the consumer will pay. The value is based on what they can touch – leather seats, alloy wheels, superior styling; but also what they can’t – associations of prestige, confidence and luxury.

There is no formula for value-based pricing, as each product will have its own value. You may find it helpful to do a competitive review to see how others are pricing similar offers and also survey your target market to understand what your offer means to them.

2.       Create a Value Perception

Creating a value perception involves positioning your product or service in the market so that it is desirable. The more consumers want your product the more they will be willing to pay. How to do this depends very much on the type of product or service and who the target customer.

Generally speaking you can create positive value perceptions by paying attention to:

  • The presentation of your brand elements including your logo, brand name and website / store front
  • Building social media networks to have large numbers of engaged and active followers
  • Educating your target on the benefits your product can bring (remembering both the tangible and intangible)
  • Demonstrating brand advocacy through customer reviews and testimonials

 

3.       Maintaining your Value Proposition

When you use value-based pricing, your approach hinges on your target market buying into your offer and seeing the value in it. As it comes time to promote your product, the strategy you choose is critical. Thinking back to Mercedes-Benz, how often do you see an ad for Mercedes-Benz:

“Mercedes Benz A-Class, was $90,000, now $50,000. For three days only!”

A product that is marketed on its value needs to maintain that value and it can easily be tarnished. If you can sell your product for half the price you were charging, your consumer will start to question its true cost, and the value they see in it may decline.

Value adding strategies are the best way to maintain value in your product while creating new reasons to buy. The most well-known value add strategy is the free gift. Offering a free gift with purchase does not devalue the original product in any way, you may be directing some profit into funding the gift instead of using some profit to discount the gift.

Free gifts can also be used to drive multi unit purchases e.g. Spend $52 dollars to get your free gift, setting the spend qualifier above your key products.

With the rise of online stores, another strong value add offer is Free Postage on a required spend. Firstly, we suggest you have a flat postage rate in place e.g $6.95 Flat Fee Postage, that way you have created a value for the postage; then set a minimum spend to receive the postage free e.g. Free Postage on orders over $100. This will encourage multi unit purchases, delivering you more profit per transaction, helping you fund the free postage profitability.

Following the 3 golden rules of pricing for value has the potential to deliver you more profit than pricing to make a margin requirement. What is your product? Can you price for value? As part of our mini marketing plan, we analyse your competitors pricing models and give you recommendations on how you should price within the market. For more information visit our product page.

Until next time, V is for Value and I hope you found it valuable!

Mary-Anne

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How to Use Twitter for Business

Twitter launched in 2006 as a social media platform, where users can “tweet” what’s on their mind in 140 characters or less. As it has gained popularity business has got on board and embraced Twitter as another social media marketing tool. This post will explain how to use Twitter for business marketing and explain some jargon to help you sort your tweets from your tweeps and your hashtags from your RT’s.

‘What is a Hashtag?’ and other Twitterisms explained.

Before we launch into how to use Twitter for your business marketing, it is important to get you up to speed on the unique lingo of Twitter. Like we examined in our Business Jargon 101 Post, Twitter has brought with it a while host of new terminology that we see as the first roadblock for new businesses wanting to embrace this channel as a marketing platform.

What better way to learn then via an infographic, this one via the GravityJonesProject

Some extra thoughts from us

Hashtags:

  • are topics that people use with a # in front;
  • this makes them trackable;
  • using Hashtags puts you in the conversation;
  • it helps people find you and know you are an authority or an interested party for that topic; and
  • can use tools like TagDef to browse for hash tags or use ‘Discover’ on Twitter.Com to follow Hashtags.

RT:

  • RT is to Retweet;
  • there is a button under each tweet that says ‘Retweet’;
  • it’s the equivalent to forwarding an email; and
  • it puts that tweet into your twitter feed, and is your way of saying you agree with or like it.

@:

  • use the ‘@’ to involve someone – it’s like tagging on Facebook;
  • put it at the start and only you and friends in common see the message in their feed; and
  • put it in the middle and it goes publicly on your feed

How to Use Twitter for Business Marketing

Successfully using Twitter for Business Marketing has three major components

1. Set Up Your Account

Set up your profile so that your business name is your username, (you may need to try different options to find a variant still available). Then decide if your display name is best suited to your own name (good for professional services) or again your brand name. Fill in the bio section considering if it is best about you as a person or your brand (tie back to what your website homepage focuses on). Then decide to link to Facebook – if you do, every tweet will automatically be replicated on your Facebook page. We see the downside to this is that if you RT, @ or use Hashtags, they don’t really make sense on your Facebook page.

2. Start Following People

If you are on Twitter.Com go to the ‘Discover’ menu and type in keywords that are relevant to your business. You may want to find similar businesses, complementary businesses, people that educate on business development or people with an interest in your offer type. Following people gives you access to content that you can then RT for your followers benefit and in many cases the people you follow, will follow you back, helping your grow your twitter community.

3. Start Tweeting

From research we have conducted (more on that below) we know that from a business point of view the most powerful tweets are those with content to click through to. 140 Characters used to talk about the weather, your day or what’s for dinner is not the best business use of Twitter. The number 1 thing you should be tweeting is your blog posts, new and old. Use your characters to summarise what the post is about, perhaps give a hashtag to the topic and add a shortened link. The next best things to tweet are images, then links to products or services on your website, always using your 140 characters to maximise the appeal to your target to take action and click! Alongside creating your own content, use Twitter to share the content you find that you feel will appeal to your target market.

I have recently been involved with a major market research project under the banner of MumsNow, where Wise Up Marketing Solutions together with Motivating Mum undertook a survey of over 1,000 Australian Mums (If you have read my blog posts Qualitative and Quantitative Data in Market Research, Turning Surveys Into Solutions, Market Research for Small Business, there are no prizes for guessing how much I enjoyed this venture).

As part of looking at Mums relationship with Twitter, we now know that about 48% of Mums are using Twitter for personal enjoyment, with close to 40% been engaged, active users, tweeting and retweeting regularly. We uncovered that 30% use Twitter to stay in touch with Brands they like and close to 20% enjoy Twitter for celebrity stalking. When it comes to Mums in Business, 25% use it to get tips and advice for business development. Keep this in mind as you plan your content if Mums are in your target market.

We have now released a series of reports on everything from Social Media Habits of Mums to the rise of the Mumpreneur, you will also find a Free 1 Page Report about Mums, now.

Managing your Twitter … along with every other Social Media Platform

In our last post How to Effectively Use Social Media for Business Marketing , we looked at the difference between a range of social media platforms. When you start playing in two and three arenas the time and ease to maintain each community individually can be overwhelming.

Thankfully, there are tools designed to help. I like to use HootSuite , which has a free and a paid access option. To date I have found the free to be sufficient for my needs. You can use it to monitor Facebook, Twitter, Google+, LinkedIn and more.

What I really like to use it for is managing Twitter. In the image to the left, I have added streams from Twitter to view my news feed, @ mentions and DMs, as well as monitoring any Hashtags I want to be a part of. Having this all in one handy location makes navigating Twitter far more efficient.

We hope that you feel empowered with your new Twitter vocabulary and these simple strategies. Find us on Twitter @wiseup_hoots and we look forward to being a fellow tweep and enjoying your tweets!

Until next week, T is for How to Use Twitter for Blogging and also Trying to Blog regularly!

Mary-Anne


How to Effectively Use Social Media for Business Marketing

Social Media has become a buzz word over the last 5 years, with the cries of social media marketing and social media for business following quick. So how does what first seemed like a platform for teenagers to be well…. teenagers, become an effective part of your Marketing strategy?

This post will clarify the key social media vehicles and outline some tips to effectively create a social media strategy for business marketing.

What is Social Media?

Our good friend Wikipedia uses the definition:

  “Social media includes web-based and mobile technologies used to turn communication into interactive dialogue between organizations, communities, and individuals.”

And we agree, that the heart of social media is interactive communication; as a business marketing tool, social media gives us the opportunity to have a two-way dialogue with our target consumer, to build trust, positive perceptions and loyalty.

As social media has spread and turned from a trend into a norm, the types of social media platforms has increased, which leads to more opportunity and to some degree, more confusion!

Which Social Media Tool for My Business?

I came across this picture a month or so ago, posted by iknowho on Facebook. I thought it was a quirky little reference tool, to help newcomers work out exactly what is what in the land of social media.

 

What I love most about this image is that it gives an idea of what some of the common social media platforms are best used for.

 

Our take on the key social media platforms are as follows:

 

Twitter – is about real-time updates, sharing what’s happening right now. It is popular for content sharing and pictures and links are very strong.

 

Facebook ­­ – similar to Twitter Facebook is about real-time updates, but it doesn’t limit you to a word count, making it a far stronger tool to use for promotional messages. Also with the ability for people to like or comment on a post and a stream of interaction to follow, Facebook is far easier to build relationships through. A “like” is a quick affirmation a target customer can give a business, communicating a positive feeling.

 

FourSquare – is ideal for location-based businesses, allowing customers to give the testimonial of “being there” and also reviewing and rating. A powerful (yet dangerous) way for target customers to gain awareness and create brand perceptions of businesses.

 

Instagram – an application on certain mobile operating systems allowing the user to take photos through a choice of filters. These can be shared with the public for further commenting. The photos are often re-shared on Facebook and Twitter. Instagram has now been purchased by Facebook, so we can expect to see and hear more about it.

 

YouTube –  a platform where users can share video. Powerful for businesses to use for product demonstration, customer education and to attempt to create viral content that is shared for free by interested users.

 

LinkedIn – A networking site that is far more corporate and pitched to a more mature demographic, a place to show credentials, has strong professional communities and forums that give the opportunity to build reputation.

 

Pinterest – this new kid on the block, has sky rocketed in subscription. It is about “pinning” or marking visuals that are of interest to you. For business it can be a way to showcase what you do and also a way to communicate your design, style and inspiration.

 

Google+ – a fusion of a few social media vehicles, Google+ is Google’s foot print in social media. The benefit of Google+ over say Facebook, is that it is indexed by Google favourably in search (think of it as in-built SEO). Business is still getting used to it, but it’s one to watch.

 

Social Media Marketing Strategy for Your Business

Another current love of mine are infographics. These graphically sum up a lot of information and I am finding they are being shared more on Facebook, Twitter and (hugely) on Pinterest. I am finding Lee Green on Twitter and Pinterest a great person to follow to get my infographic fix hand delivered.

I found this infographic very compelling to confirm why social media marketing is a strategy imperative for your business.

Engaging in the right social media platforms takes little financial investment, but does take significant investment in planning, implementation, monitoring and adjustment. Not every social media platform is appropriate to your business and needs to be entered into, but whichever social media platform you do choose to pursue should be covered consistently.

Here are a collection of articles we have found useful that can help you maximise the social media platform you decide is right for your business.

Facebook

Get More Interaction on Your Facebook Page

What Encourages Facebook Engagement?

Twitter

How to Use Twitter to Get Clients and Make Money

Your One Stop Guide to Using Twitter

Google+

How you can use Google+ to Impact Search

How Small Business can use Google

LinkedIn

How to Generate Leads using LinkedIn

Top 10 LinkedIn tips for Small Business

Pinterest

Pinterest: The Ultimate Tool for Curating Content

15 Tips for using Pinterest as a way to Build your Little Biz

 

We can be found on Facebook, Twitter, Google+, LinkedIn and Pinterest. What platforms are you using for your business? Which are you planning to add?

Until next week, S is for Social Media Marketing and also for staying on top of blogging!

Mary-Anne

www.wiseupmarketing.com.au

 


How to Reach Your Target Market

How to target a market is one of the most common questions we get from clients. We all know that our product or service (in most cases) is not for everyone, but how do we clearly define who the target market is? Once we know who they are, how do we go about getting ourselves in front of them?

This post will help you identify your target market, understand targeted reach and give you 5 tips on how to reach your target market.

Identify Your Target Market

Many new products and services are born from an idea, a passion or sometimes just by accident. Usually it is to answer a consumer need. Maybe you have had a personal experience where something was lacking from the market, or you have a talent that can be easily turned into a business or maybe you see a service and think “I can do it better!”

Naming that consumer need is our biggest clue in being able to identify our target market. If we are answering a consumer need, we can then look at the characteristics of those who fit into that group of consumers.

But what if it is unclear what this consumer need is? Or if you aren’t sure which consumers would be interested? We can look to identify our target market by utilising market research (see our post on Market Research). We can survey groups to quantify who our offer appeals to and then look at the characteristics of those groups, or we can review research that has been done before (for example www.abs.gov.au) to analyse who our target could be based on the data that has been collected.

We can also identify our target market by looking to our competition. Who do they target? How do they target them? You may even want to begin to think about why they target them? Understanding your competition can give you ideas by observing who they are targeting and also by analysing who they are not, which may represent an opportunity for your business.

Once we have identified our target market we can begin to classify them based on (see our post on Analysing Market Research):

  • Demographics
    • Are they male or female?
    • What age bracket do they tend to fit in?
    • What is their income?
    • What level of education do they have?
  • Psychographics
    • Personality factors
    • Lifestyle Factors
    • Interests
  • Behaviours
    • Brand loyalty
    • Value of Quality
    • How they shop
  • Geography
    • Location in relation to our service or producttarget reach

Our aim is to have a picture of a typical consumer or consumer groups. Clearly understanding your target market is the first step in planning how to reach them.

Magazine publishers are probably one of the best practice industries for identifying and communicating target markets. See in this example how NME clearly define who reads their magazine.

Understanding Targeted Reach

Understanding targeted reach is being able to identify how many people in your target market are going to see the marketing or promotional opportunity you are offering. Many clients send us emails offering them advertising space in a magazine, online directory, goodie bags and more; they all want to know the same thing “Should I do this?”

When you know your target market, it is much easier for you to assess these opportunities, because what you are now looking for is the reach; that is the percentage or number of your target market that will see your message.

For example, when you are told an online newsletter goes out to a subscriber base of 50,000, you are immediately impressed. That is a large number of people to view your offer. But, without being able to estimate how many readers are in your target market, the number has no relevancy.

You need to ask questions based on what you know about your target market: “What percentage are women?”, “What percentage live in Adelaide?”, “What percentage have a dog?”. The questions you ask are dependent on your business and the consumer you need to reach.

Use the answers to reassess the original number and then assess your targeted reach and cost per view (see our post on Calculating your Cost per View). Do you now deem this a suitable insertion to reach your target market?

5 Tips to Reach your Target Market

1.       Connect with those that already reach your target market

When you have a profile of your target market, you can then start to research the types of media they interact with, look for

  • Magazines
  • Newspapers
  • Blogs
  • Online communities
  • Facebook pages
  • Newsletters
  • Radio Stations

Approach these media outlets and find out what advertising opportunities are available. If they have already captured the attention of your target market, you can then reach out with your marketing message.

2.       Connect with complementary, but not competitive businesses

We can’t very well ask our competitors to promote our business, but we can look for complementary businesses.

If you make artwork for children’s rooms, consider contacting other businesses that target your market, for example children’s clothing, children’s furnishings, or children’s toys. Approach these businesses and suggest exchanging advertising on each other’s websites or in each other’s newsletter, helping you both to reach more of the target market.

3.       Improve your SEO

Another way to reach your target market is to ensure you are there when they go looking for your product or service online. Understanding the keywords that your target market use when searching (see article on keywords) will help you create your website, to ensure you match your content to how they describe your product or service.

4.       Talk in the language your target market understands

Looking at the profile of your target market, make sure you talk in a language that they understand. Only use jargon or complex words if it is appropriate to your target market.

Appreciate what motivates them to purchase; is it price? Is it quality? Is it service? Then ensure you write your marketing message to match.

5.       Utilise PR

In our first tip we talked about looking for advertising opportunities within the media that your target market is connected with. Another key way to reach your target market within that media is by undertaking public relations (PR) strategies.

PR is a very broad area of marketing and for the purposes of this article; we are only going to discuss a narrow segment.

You can engage media to talk about your product or service by writing (or having written on your behalf) Media Releases (Check out Handle Your Own PR). If successfully pitched, these Media Releases can lead to articles in the newspaper, in magazines and more. these are at no cost to you and often hold more power with your target market, as they are not seen as marketing messages and gain the credibility of the source they are published in.

Also subscribe to media callout services such as www.sourcebottle.com.au to keep on top of any PR opportunities that you could use to promote your product or service.

Making a consistent effort to reach your target market will ensure over time you grow your business and also maximise your marketing spend. Do you know who your target consumer is? How do you communicate this to others?

Until next week, R is for Reaching your Target Market and also for finally resuming the A-Z of Marketing.

Mary-Anne


Qualitative and Quantitative Data in Market Research

Market research doesn’t have to be a pesky phone call during dinner; many of your customers would love to tell you what they think (if you’re willing to listen).

This post will outline how to ask the right questions to ensure your market research effort helps you with the planning and development of your business. The consideration of questionnaire design and its mix of qualitative and quantitative data collection will easily give you the insights you need to grow your business.

How to Conduct Market Research

Conducting market research can be as simple as posting a series of designs on your Facebook page and asking people to vote for which they like the most, to more in depth methods such as emailing your recent customers with 5 questions about their experience with you. It can also be  quite complex, by designing a multiple page survey through a survey interface and sending it out across multiple networks to measure attitudes and perceptions about the category you operate in.

Our first post on the Wise Up Marketing Blog was 5 Steps to host your own Census! (Or Market Research for Small Business), after being unnaturally excited by completing the 2011 Census. Here we explored 5 steps from defining your problem to designing your questionnaire. We followed up a week later with the post Turning Surveys into Solutions which gave an overview of how to analyse your responses and turn the data into answers for your marketing questions.

On reflecting on those two posts, I can’t emphasise enough how important it is to define your problem before you start. Market research is like detective work, you have a hunch but you need to collect all the clues before you know if you are right; you might even end up finding a whole new case to work on.

What is Qualitative Data?

Qualitative data are the answers we collect from our market research that are open ended. They are the responses we get in the respondent’s own words, not constricted by scales or structure. Qualitative data gives us the “why”, not the statistics and numbers.

We use qualitative research to gain insights into people’s attitudes, perceptions, behaviours and motivations. We collect qualitative data by asking open ended questions

E.g. ”What do you think?” “Tell me about a time….” “Explain why…”

We often need to use explorative techniques to draw out more information from respondents, as such qualitative data is best collected in face to face interviews, focus groups and (the dreaded) phone interviews.

Although it is not common to see open ended text boxes on surveys we all complete;

E.gUse this space to tell us any other thoughts”, “Is there anything else you would like to add”, “Describe why you like the first design”

It is not possible for us to “flesh out” those answers or clarify comments that seem more valuable. Most small business will not have the time or resources to run face to face market research and we don’t recommend attempting your own phone interviews. We recommend however still including open ended questions in your survey, with strong prompts;

e.g. describe; in your words; what do you think about; if you could have any feature

What is Quantitative Data?

When we told you qualitative data was not the statistics and numbers we held back telling you that is precisely what quantitative data is. Quantitative data tells us “how many” people think, feel or act in a particular way.

We collect quantitative data as part of our market research by asking closed questions that limit the way in which people can respond. These may be yes or no (dichotomous), multiple choice, rankings or rating scales.

These answers give you the “hard facts” and statistics and also allow you to compare different groups of people directly against each other:

e.g. 30% of Men liked our new design vs 20% of women

With quantitative data it is important to ensure you get a large volume of responses, as we use these responses to make generalisations. You don’t want to change your strategy because 80% of respondents didn’t like your product range, if only 5 people responded.

Feel free to download this infographic that’s a quick reference on Qualitative and Quantitative data. Qualitative and Quantitative data in Market Research

Market research is a marketing activity that can be undertaken for free, costing you just your time, but the benefits of getting to know your target market ensures your products and services are meeting their wants and needs; and that can lead to a more profitable and efficient business.

Until next week, Q is for Qualitative and Quantitative data and also Questions; do you have any you’d like answered? Drop me an email at Maryanne@wiseupmarketing.com.au

Mary-Anne

P.s. This will be the last post for the year; we will come back to the A-Z of Marketing with the letter R on January 12. Have a happy and healthy break, see you in 2012.

www.wiseupmarketing.com.au


Setting Goals and Objectives the SMART way

We have reflected many times through the ‘A-Z of Marketing’ on the fact that small business owners are time poor. When you are doing everything yourself, or with only a few people to help you use your time to get the job done, leaving not much time to plan.

Finding 10 minutes for setting goals and objectives can give a clear direction of where you are going and help keep the big picture clarified. This post will also discuss S.M.A.R.T goal setting, and give you a step by step approach to its implementation.

What are Goals and Objectives?

Goals and objectives are the desired outcomes or achievements for your business. They are formalised statements of everything you want (and need) your business to grow toward.

Goals provide a broad overall aim; they tend to be the long term, big picture. It is best to limit your goals to around 5 each year. You are unlikely to have the time or the resources to stretch further and the more you are trying to achieve, the less focus each goal receives.

Objectives are a specific aim or target that, when met, help achieve a goal. Several objectives may combine to achieve a goal.

Often a marketing objective is created to help achieve a financial goal e.g. A businesses goal is to ‘increase sales by 20% by end of 2012’, so a marketing objective is set to help achieve that goal; ‘grow mailing list to 10,000 subscribers by end 2012’ etc.

SMART Goals and Objectives

S.M.A.R.T is the acronym used in goal and objective setting; following is what it stands for and what it means to your planning:

Specific

When setting your goal or objective you need to be clear about what you want to achieve. Each goal or objective should have a single focus; that is, should only be concerned with one achievement.

What are you going to do? Grow, increase, decrease, develop, etc

Measureable

Goals and objectives are the road map for your business. If they are not measureable, it can be hard to determine if they have been achieved. A measurable goal is also easier to manage; we can check our progress and adjust our objectives to ensure we achieve our end goal.

The measurement needs to be quantifiable e.g. change in dollars, percentages, averages, counts etc.

Attainable

We all know how de-motivating unachievable goals can be, when the bar is set too high and there seems to be no possible way of reaching the goal, a majority of us will put it in the too hard basket and move on.

Set your goals and objectives so they can be achieved, but with a stretch, this will cement your commitment to the task.

Realistic

A realistic goal or objective is one that supports your businesses knowledge and skill base. It fits in to how your business works and it doesn’t require investment in time or money that is not available.

Often long term goals (3-5 year plans) are broken down into short term goals (annual plan) so that they become bite size pieces that are realistic. These short term goals are supported by objectives to give them day to day meaning.

E.g.

Long Term Goal

  • Be the #1 provider of business cards in Australia by 2015

Short Term Goal

  • Increase repeat sales by 20% by 30 June 2012

Marketing Objective

  • Increase customer loyalty by 25% by 30 June 2012 using a customer rewards program
  • Increase customer base by 15% by 30 June 2012 using a customer referral program
  • Send a promotional offer to every customer 4 times per year during the 2012 financial year
Timely

Giving your goal a deadline, draws a line in the sand. It gives you a definitive point where you have to stop and say “Did we make it?”

Whether it is weeks, months or years, a timeframe forces you to stay on track, it motivates you and for some of us last minute magicians, it’s the shove needed to get the job done.

Goal setting objective setting SMART

This infographic is great to print out and place somewhere in your work space to assist you in creating SMART goals and objectives.

To help get you into the swing of thinking SMART, here are some business goals rewritten as SMART goals

Goal SMART   Goal
Achieve   increased awareness by December 2011 Increase awareness by 5% by 30 December 2011
Grow sales to   $15k Grow sales to $15k by 30 June 2012
Increase the   market share we hold in key areas so that we are satisfied we are growing by   financial year end Grow market share a minimum of 10% in Sydney,   Melbourne and Brisbane by 30 June 2012
Increase our   profitability from $5k to $40k by December 2011 Increase our profitability by a minimum of $1k per year for the next   5 years; to be measured at each financial year end from 2012 – 2017
Get more   likers on Facebook and followers on twitter and readers on the blog Grow Facebook likers to 500 by 30 December 2011Grow Twitter follows to 300 by 30 December 2011Increase blog subscription by 20% by 30 December   2011

As 2012 approaches quickly, think of what you want to achieve. What goals and objectives will you set? Will they be SMART?

Until next week, O is for Objectives and also getting organised to grow your business in 2012.

Mary-Anne

www.wiseupmarketing.com.au


How to Measure Success

In my very first blog post (5 Steps to Host Your Own Census) I made this huge confession:

“Being a passionate and dedicated Marketer, over the years I have become near obsessed with measuring; measuring results, measuring profitability and of course measuring the target market.”

So as M drew closer in the ‘A-Z of Marketing’ series I was filled with excitement and jotted on copious post-it notes the measurables I wanted to share with you.

Measuring your performance, not just financially, but also your connection with your consumer gives you a reality check. It uncovers the true effectiveness of your strategies and guides you in how to improve your business and stay ahead of the competition.

5 KPI’s (Key Performance Indicators) for your Business

1. ROI (Return On Investment)

In the marketing sense ROI is used to analyse the profit on a campaign you have run, to determine the percent return on investment.The formula is:

Return on Investment Formula

This result would mean we had a 62.5% return on our investment. You will need to get a benchmark of what is acceptable for your own business and work to improve over time. A negative ROI means that you have lost money and in that case you would need to question the appropriateness of your strategy.

2. Wholesale Margin

Use this formula to determine the margin you are giving a retailer. Often the wholesale expectation sits between 45-55% of retail depending on the outlet.

Set the RRP you believe the market will accept for your product and then use this formula to calculate the wholesale margin you are giving to your retailer.

wholesale price formula

GST TIPS: To remove GST divide by 1.1, to add GST multiply x 1.1, to work out the GST component divide by 11

 3. GM (Gross Margin)

Use this formula to determine how much money you will make from each item you sell. As this is Gross Margin, we are only concerned with the costs associated with making the goods or service.

This is the key way we measure if a wholesale price requirement will be profitable for our business. The formula is:

gross margin formula calculation

4. CTR (Click Through Rate)

The CTR tells us how many people are clicking through (clicks) our online advertisement as a percentage of the total times our ad was shown (impressions). We measure CTR on the banner and badge advertising we do on websites and also when we undertake pay per click campaigns E.g. Google AdWords, Facebook Ads. The formula is:

Click Through Rate Formula

The CTR benchmark is different by business and will differ based on whether you operate in a broad or niche category. The DoubleClick Benchmarks Report, published in 2010  lists 0.10% as the CTR benchmark on static online ads.

5. CPV (Cost Per View)

We recommend our clients estimate a CPV when approached with an advertising opportunity. We are all often wondering “Should I advertise in this publication?” and “Is this advertising opportunity worth it? Measuring the CPV helps you to break down the advertising costs and assess them at a leads level. If you could buy a mailing list for $1,000 and it gave you 1,000 names you would say it was a $1 per sales lead. Similarly CPV is calculated with the formula:

Cost Per View

You would then evaluate the CPV against how valuable the lead is. Further you may want to take the distribution and cut it down to what you believe is your target market, e.g. the distribution is 20,000 of which 5,000 are your target, say Elderly Couples on the Pension, you then would work out the CPV against just your target:

2,500
5,000

=$2

 Your CPV has increased greatly, but with few mediums that get in front of that target and the targets affinity with local newspapers, we would say it is a reasonable CPV.

Check your Web Stats to Monitor Web Traffic

If you have a website (is it even worth asking anymore?) you may feel uncertain at times as to whether anyone visits it, if it’s working as hard as it can for you and most importantly, is it converting browsers into customers.

Your web stats are measuring every interaction browsers are having on your website, all you need to do is logon and analyse them.

The two stats we pay the most attention to are both functions of time. When we undertake a Website Effectiveness Audit, firstly we look at the Bounce Rate. This is given as a percent and tells us how many people landed on our page and clicked off (bounced) straight away. A high bounce rate tells you that the majority of traffic to your site are arriving and deciding instantly you’re not the right fit. Work on decreasing your bounce rate by improving your home page appeal or direct traffic to the page most relevant to them e.g. product page, location page etc.

Dwell Time, is the other time based base measurement we encourage you to look at. Once we remove the people that ‘bounced’, we want to know how long the rest of our traffic stayed for. These are usually presented in bands of time e.g. 0-30 seconds, 31 – 2 minutes etc. Again we want our traffic to stay as long as possible, browse many pages and convert. If you have a very low dwell time, work on engagement with your traffic, add more images, a video, a blog, FAQs, any valuable content that will increase the time your potential consumer spends on your site, getting to know you.

We run a Website Effectiveness Audit for just $49.95 which includes a “Traffic Light Report” on how your website is performing, please get in contact if you would like to know more.

When you set out to measure success you need to remember that success looks different to everyone (and to every business). The key is to benchmark against realistic targets for your business.  Focus on how to be more profitable whilst exceeding your customer’s needs and your business will continue to grow.

Until next week M is for Measurement and also for Making it to the halfway Mark in the A-Z of Marketing!

Mary-Anne

www.wiseupmarketing.com.au


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