The NUB Of Your Marketing Strategy
Many people buy in to the notion that you need a marketing strategy or a business strategy. It almost seems the 'politically correct' thing to have. Strategies seem to be everywhere: financial strategy, investment strategy, selling strategy, poker strategy, black jack strategy, strategy games, and the list goes on and on.
Strategy originally was a military term to describe how a whole war would be conducted with all the logistical support that was needed. Strategy was carefully thought out and then was the master plan for how the battles were conducted. Strategy was often almost cast in stone and was only changed after very deep thought if new conditions forced this. However if you observe people in action particularly using marketing or business strategies, the rules seem much more flexible now. They sometimes seem to be following that precept from Yogi Berra, "When you come to a fork in the road, take it."
Developing A Good Strategy
A good strategy gives a clear direction for activities and efforts. All resources, energy, enthusiasm and even passion are then channelled and focused on moving in that direction. Without such a strategy, the lack of focus dramatically reduces the effectiveness of efforts and may even guarantee failure.
How do you get a good strategy? There's a library of books to guide you and an army of gurus. Much very wise advice has been set down on this. The works of Michael Porter are particularly good in this field. Clearly you want to get the management group together and devote some serious time to hammering the strategy out. It should be one that all agree on and support. Some techniques for such group thinking have been suggested. SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) for example seems to have very wide acceptance.
Unfortunately the outcome from such a groupthink can often be a wordy document that does not clearly indicate what should be done and more particularly what should not be done. Cutting such a wordy document down to the essential minimum is tough. As Mark Twain said, "I'm sorry this letter is so long, but I did not have time to write a shorter one." The best strategy document for practical use is the shortest possible one that ensures the right actions are taken.
The Absolute Minimum
So what should that wordy strategic document be cut down to? Or if you're starting with a clean sheet of paper, how can you best outline your company's strategy on just one page? The best word to describe it is 'Nub'. Nub means 'the most essential or most vital part of some idea or experience'. So that's what you need to get down, no more and no less. What should be 'the most essential or most vital part' of the marketing strategy?
Practical experience, watching a host of companies over the years apply what they thought of as marketing strategy, suggests the following. What must be included is what might be called the NUB. NUB is the most essential or most vital part of strategy. More importantly when considered as an acronym, it provides the short list of what must be included in the strategy. NUB stands for:
N - Niche of potential customers
U - USP, Unique Selling Proposition. This describes what you offer to those potential customers, that is unmatched by the competition, and
B - Bottom-line. The forecasted 12-month cash flow to confirm that this is a satisfactory and viable scenario.
Every one of these three letters is tough to focus on. The lack of one or other of these has been the downfall of many companies. With all three strong and well-defined, success is highly probable. Each of them does of course interact with the other two. So you're involved with a cycling process of continual refining each until the total NUB is consistent.
N - Niche
A Niche is a group of potential customers (they could be individuals or they could be companies) who share some common characteristics. In this global age of the Internet, it no longer needs to be a regional grouping although some are. So why do we need to define a Niche? Why not sell to anyone who is ready to buy? There are a number of reasons but here are just 6:
- A niche of 'similar' customers allows the product/service package to be developed exactly to meet their needs and provide the benefits they are seeking.
- Publicity can be optimized for this particular niche and a 'rifle' approach can be adopted rather than a 'shotgun' approach in using the publicity budget.
- The company can become known as the speciality supplier to the niche and provide better and more targeted service.
- To the extent that the niche forms a community, either on a regional or industry basis, the company can better become involved in this community.
- By selling more similar product/service packages the company can optimize its purchasing of raw materials and supplies to provide the best cost basis.
- By producing and selling more similar product/service packages, the production and selling teams can both go down their learning curves faster and optimize their efficiency and productivity.
Taken together, these six reasons ensure the best possible profits and the most assured sales growth.
The Niche should not be too large and should not be too small. If too small, it will not support the sales growth required for success. If too large, then it is more difficult to secure some of the economies of scale suggested in the above list. It is also difficult to develop the position of specialized supplier to the niche. Ideally the niche should allow potential for adequate sales growth even with optimistic projections for a time horizon of 3 to 5 years.
U - USP
The Unique Selling Proposition has been much discussed throughout the years since Rosser Reeves coined the phrase in his book, "Reality in Advertising", in 1961. His definition was as follows:
- The proposition to the customer should be: "buy this product, and you will get this specific benefit."
- The proposition itself must be unique.
- The proposition must be strong enough to pull new customers to the product.
However here we will define it a little more precisely. The USP must be what a typical member of our Niche would acknowledge as applying to our product/service package. It makes our product/service package stand out measurably from the other competitive products available to this Niche. So this is very much as seen in the eyes of the beholder, our potential customer. It must be sufficiently outstanding that when a potential customer sees this USP mentioned on our website, he or she finds it very believable. As Reeves said, it should be so believable that it creates a desire to contact the company and initiate a purchasing process.
This is a very tough criterion. Just wishing it to be so, doesn't create a USP. It may require investments or extra resources or efforts to make the USP a reality for our product/service package among members of our Niche.
B - Bottom-Line
The third letter, B, is for the Bottom-Line. Or it could be for any of a number of other letters starting with B. They all relate to Cash, a critical resource. B could also be Budget, or it could be projected Balance Sheet, or it could be Bucks in North America. For a start-up enterprise eager to get moving and not waste too much time on planning, I would suggest it could even be Back-of-the-Envelope Cash Flow projection. The important thing is to project out for 12 months using believable sales estimates and conservative cash availability. Unless, using our current view on the Niche and the USP, we can project a survivable Bottom-Line, then the business is doomed to failure. The sales estimates in this survivable Bottom-Line, then become our minimum targets.
So many start-up enterprises fail because they don't look at the B. Faith, passion, and enthusiasm for your USP may not be enough. The likelihood is that the first time round the Bottom-Line is not survivable. It is not then sufficient merely to juggle with the numbers to make it look right. It may require a redefinition of the Niche or the USP. Perhaps a different way of making the product or selling it must be found. At the end a credible and deliverable B must be determined.
So You Have Your NUB
Once the NUB is determined, then your team can follow the actions that will make the B a reality. The U defines better what your potential customers will find attractive and the N determines where you go to look for them. This clearly defined direction will make every one of your actions more effective. You can create a website that will be more effective in converting visitors into potential customers. You can take actions that will make members of your Niche more likely to see the website. Your continuing contact with potential customers will confirm that your company is the very best possible supplier for them. At the right moment, when you ask for the order, you will make the sale.
Developing strategy is often a long-winded process. Larry Bossidy in his book, "Execution, the discipline of getting things done", laments that in many large companies, such strategic pondering seems to take for ever and does not produce results. However some strategic thinking is very appropriate, before leaping into action.
SMM will be happy to assist you in developing the NUB of your marketing strategy to avoid the impossible dream. Our help can be configured to meet exactly the needs you have. Our strengths, experience, creativity and practical common sense can complement those of your company. So write us a Message today on what you're looking for without obligation.
Added to site 27 July 2004
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