Why do I need Marketing?
For the past hundred or so years marketing has been an inalienable part of many companies. Marketing is one of the main reasons why so many huge companies do well and so many others can’t climb the leader of business success. Every successful business markets!
Marketing is an essential function of the organization that wants to be different and have a selling point that audience will “buy” in order to attract the to them product or service. With the tremendous amount of products being offered they have to make sure that customers know about what’s new, what’s on the regular stock and when hot new arrivals are coming out.
We can vision marketing as a huge umbrella with many and many different items going under its dome. Marketing has traditional and new “non-traditional” practices, by the way nontraditional will very fast become traditional. Let’s name several items on the list:
- Direct Mailer
- TV and Radio Ads
- Print Ads (bus, subway, street and any other including magazines, newspapers, etc)
- Viral Marketing
- Web Marketing
- Search Engine Marketing and Search Engine Optimization (SEM/SEO)
- Pay-per-Click Ads
- Affiliate Marketing
- Banners, flash and pop-ups
- And many others…
As you can see marketing is no single practice at all, it has multiple layers which have to be addressed first before implementing any of the final decisions. There are things like: marketing strategy and tactic, audience targeting and segmentation, marketing plan, research and analysis, goal and objective refining and many more things to make sure that the campaign or whole marketing strategy works out good to benefit the company.
Marketing for Customer Retention
Every business needs a marketing strategy. It is a fact that businesses with a well-developed marketing strategy and initiation succeed and compete on the market much better than those without it. However, business has to identify two main questions in order to initiate the strategy:
- How much business comes out from your existing customer base and how much business comes out from new leads and new customers?
- How many marketing resources are spent on marketing and generating new clients and how many resources are allocated to generating repeated business from your existing clients?
The answers for those two questions are essential in developing a good marketing plan, as they should answer many why’s and give you a good analytical overview on things that you need to develop. While it is very important to retain your existing clientele and make sure that they stay with you it is also critical to grow your business by acquiring new “fresh” customers. The reason why it is important to acquire new accounts is because while maintaining your current base there is no growth, basically you’ll be generating your profit from the “maintenance” of the client’s account.
It is important to understand that there should be a specific amount of marketing resources spent on developing and continuing the relationship with your current client base, however the allocation should be approximately:
- 70% of the marketing spend should be focused on acquiring new customer
- 30% of the marketing spend should be focused on keeping current clientele
As you can see the majority of your spending should be going against targeting new clients, it is rational because you have to realize that if you currently have a customer it means that you’ve hit him before with your marketing efforts, therefore there is no need to attract the customer who is already on your account. You should be doing totally opposite; you have to be creating messages that would keep him from going to your competition.
You have to allocate most of your marketing resources against identifying and targeting new customers. The 70% marketing spend has to be equally divided between many marketing initiative, such as: online marketing, SEO, web optimization, direct marketing, advertising, relationship building, tradeshows and other marketing activities.