It doesn’t matter what your company does, every company needs to learn how to market itself well. Marketing is the life blood of any company because it can be translated directly into sales. Marketers should be aware, however, that creating a catchy bit of advertising is not enough. The most effective marketing campaigns are focused on specific factors that the public probably isn’t even aware of. Although each company will have different target markets the same five principles should guide their approach. The principles can be thought of in steps.
Step 1 – Generate leads. Every lead is a potential sale. Calculate the amount of leads by adding up every new person who has contacted you or who you have contacted during the year. Always be on the look-out for potential leads.
Step 2 – Improve the lead conversion rate. The conversion rate is the percentage of the company’s leads that actually result in a purchase. For example if a company makes 100 sales calls and it results in 40 completed sales then the conversion rate is forty percent.
Step 3 – Increase the average dollar amount per sale. A company’s target dollar amount per sale varies widely depending on the industry it is in. For example Boeing, which manufactures and sales airplanes, will have an average dollar amount per sale in the hundreds of thousands, if not millions, whereas a shoe store’s average dollar amount will be anywhere from fifty to a hundred dollars.
Step 4 – Increase the average number of transactions. This is the amount of transactions that an average customer will make. This can be an estimate. Like the average dollar amount per sale, the average number of transactions varies widely from industry to industry. This is different from the conversion rate in that it focuses on the number of repeat customers. This step is especially important because the majority of a company’s sales come from past customers.
Step 5 – Widen the profit margin. Another term for it is the profit percentage. Simply put the profit margin is the percentage of the sale price that is pure profit. For example if something is sold for ten dollars but cost six dollars to manufacture and market then the profit is four dollars and so the profit margin is four percent.
These steps may not seem to be directed at a marketing department but if marketing is going to effectively boost a company’s performance then it has to have a firm understanding of what every company needs to thrive.
Remember that when focusing on each step a successful marketer will consider how the decided plan of action will affect the other steps. For example, step two is a focus on converting leads into sales. The easiest way, which may also be the laziest way, would be to promise low prices but that would hurt the company’s efforts to increase the average dollar amount per sale, which is step three. A marketing department does not have control over a lot of the business decisions, of course, but the way that it portrays those business decisions, once they are made, can be a company’s most valuable asset.