How to Write the Business Plan Marketing and Sales Section
Here is a guide to help you determine the marketing and sales considerations that should be included in your essential business plan.
“If you believe your product or service can fulfill a true need, it’s your moral obligation to sell it.” – Zig Ziglar.
In the last installment of our business plan creation series, we talked about the approach to detailing your products and services.
In the sixth “Creating your professional business plan” installment. We’ll expand on this and help you develop your business plan marketing and sales section. Your readers will appreciate how you will advertise your offerings to your target core customer base to generate credible leads for your sales pipeline.
Benefits of having a business plan marketing and sales section
Developing a comprehensive business plan that covers all the necessary details is crucial to start a successful business. This plan will help you examine all aspects of your business and serve as a guide to achieving success.
One critical business plan section is the Marketing and Sales Strategies section, which lays out your approach to reaching and selling to your intended audience. Even if you offer top-notch products or services, your efforts will be in vain without customers or clients. Therefore, it’s vital to have a solid plan in place for attracting and retaining customers.
Your marketing plan is the key to finding your buyers effectively and affordably and is crucial for potential investors and lenders.
To be thorough in your process, you must answer a few key aspects.
What to include in the business plan marketing and sales section
To effectively market and sell your product, it is fundamental to understand your target audience and competition. This involves creating product messaging, determining pricing, and implementing various marketing strategies to increase sales.
This section should contain the following elements and should not exceed four pages:
- Target Customer
- Pricing Strategy
- Marketing Plan
- Sales/Distribution Plan
The 4 P’s of marketing play a crucial role in achieving success, and measuring the effectiveness of your marketing mix is vital.
What Are the 4 Ps of Marketing?
When effectively marketing a product or service, it’s essential to consider the four Ps: product, price, place, and promotion. These are often referred to as the marketing mix, and they encompass a range of aspects that can affect the success of a product or service.
These factors include consumer wants and needs, how a product or service is perceived, how it compares to the competition, and the company’s interactions with customers.
While the four Ps were first introduced in the 1950s, additional Ps have since been identified, including people, processes, and physical evidence.
As you ponder on your marketing efforts, consider these four questions:
- Product: Does your product fulfill the needs of your customers?
- Price: What is the worth of your product?
- Place: Where are your customers searching for your product?
- Promotion: How can you distinguish your product from competitors?
Answering these questions using the marketing mix, also known as the four Ps of marketing, will aid you in devising a plan to connect with your customers.
Your ideal customer
Before developing brilliant business plan marketing and sales plans, you must identify to whom you sell your services.
Target marketing divides consumers into more specific groups based on shared characteristics, needs, or behaviors to focus on the most likely purchasers of your product or service.
- Who is your ideal customer?
- Who will buy your products or services?
- Who will use your products or services?
A helpful way to define your target market is to construct customer personas — fictional customer biographies representing members of your target demographics. Personas are useful because they create “people” that you can speak to when designing your marketing and sales messaging.
Customer personas describe your ideal customers; you may have more than one customer persona, especially if you have a diverse product or service offering. Focus on telling real people, including their names, professions, incomes, interests, preferences, previous purchase histories, and more.
The more you flesh out a persona, the better you can target your strategies, and the more effectively you can reach them, please them, and keep them.
An example of this is a children’s toy that is designed for boys aged 9 to 11. The target audience for this toy would be the parents of these boys. The target market is the consumers most likely influenced by an advertising campaign. In this example, it is essential to note that the target market differs from the buyer persona.
How to split your audiences into market segments
There are various methods to conduct market segmentation.
You can split each category into smaller segments for a more detailed market understanding.
- Behavioral refers to how consumers interact with products or brands, including engagement, social media usage, and consumer journey.
- Demographic criteria may include gender, age, income, education, social class, religion, and nationality.
- Geographic information includes data on individuals’ residences, workplaces, and leisure activities. It can be categorized by country, state, city, county, etc.
- Psychographic information includes personality traits, lifestyles, attitudes, likes, and dislikes.
Positioning your business to stand out from the competition
Marketing strategy is centered around making your business stand out and offering unique benefits to customers.
Market positioning and brand positioning refer to the desired location of your brand or product within a specific target market. It involves your strategies to promote your brand or product to consumers to achieve that position.
Determining your pricing strategy in your business plan marketing and sales section
You’ve defined your target market. Now, you must decide what you will charge for your products or services. There are several factors you should consider when setting your price points.
First, you must consider the costs associated with the materials, labor, rent, and other fixed expenses for producing your product or supporting your service offerings. It would help if you charged enough to cover these direct costs while allowing a reasonable profit to support future business growth.
Re-visit the market research you did in earlier business plan sections to determine your price point versus your competition charges and identify what price point fluctuations the market can sustain.
Assess the points that differentiate your product from your competition. Do these features bring customers extra value that makes them willing to pay more? Or are you looking to develop longer-term contract opportunities that allow you to offer customers a bespoke pricing proposition?
Finally, depending on what your customers are looking for, will you use flat or tiered price points that allow for a broader range of customers?
Marketing your product or service
Luckily, and conveniently for you, there are many ways to support endorsing your products and services today, and it’s often not financially feasible to use all of them, especially not at the beginning of your growth journey when you are starting your business. It’s necessary to analyze your market research and choose a handful of methods that will most effectively bring awareness to your offerings.
Depending on where your customer personas spend their time, if you’re marketing to a broad spectrum of tech-savvy millennials, you’ll want to focus on mobility, ease of access, digital media, and social marketing.
Across the generations and different business sectors, customers might be best served using traditional marketing methods like direct mail and radio or television advertising. Industry events, networking, and workshops are popular methods for some companies to identify potential customer collaborations based on their preferred purchasing and supplier engagement habits.
Identify the method that works for you and fits your budget. Set a meaningful timeframe to assess the marketing method before you move on to an alternative offering – give yourself time to see the results.
Customer distribution and engagement channels
You must also describe the channels where you’ll engage with prospective customers. To a degree, the answers you gave in the last section will guide your answers to this question, but there are still decisions to make.
For example, suppose you decided that social marketing would be the primary driver of your customer engagement efforts. In that case, you’ll reach your customers through social media channels, i.e., Facebook, Instagram, and LinkedIn. However, other advertising methods are available across multiple channels, so you must analyze which ones will be most effective for your target market.
Companies are available to support this aspect of building your brand presence. If you’re feeling overwhelmed or short on time, you may want to explore specialist marketing and digital partners to help with brand and product promotion.
They will also be able to support how you’ll continue to engage with your customers following a successful sale transaction, helping you develop a long-lasting customer engagement lifecycle strategy.
Sale plan and activities in your business plan marketing and sales section
The last part of your sales plan determines how you’ll close the deal for prospects that enter your sales funnel based on your marketing efforts.
- Will you use an in-house sales team that also attempts to make outgoing cold calls?
- How will you manage lead generation and new customer engagement?
- Will you employ a soft or hard sell?
- Will you generate leads from conferences, events, referrals, or via the website?
These decisions are important because your sales plan determines how well you’ll convert prospects into customers and can help with customer retention and financial cash-flow management.
Most companies will share their experience that it’s far more cost-effective to retain and nurture a current customer versus the costs of engaging new customers.
Budget for your marketing and sales activities
Once you have documented the activities in your marketing plan, it is essential to calculate the expected costs. For instance, if referrals are part of your strategy, you should determine the amount you are willing to pay a referral partner for each new customer they bring to your business. Depending on your preference, the amount could be $1, $20, $50, or more.
Let’s assume that you expect a referral partner to refer 100 clients to your business; each client spends $10, giving you a total of $1,000. You have agreed to pay the partner $1 for each referral, so your marketing strategy will cost you $100. In this example, your acquisition cost is $1, which is essential to note when drafting your budget and financial plan.
You may have similar costs for advertising or PPC, which you can include within your marketing and sales budget.
Do you require assistance in crafting your business plan marketing and sales section?
We know that creating your comprehensive investor-ready business plan can take time and is, for many people, an excellent opportunity to reflect on their business goals and ensure they have identified their business niche. Do you want an expert “second opinion” to review your business plan or financial forecasts at any point? Let’s talk!
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