Strategic Marketing and Tactical Marketing Know The Differences And Profit
Most people mistakenly assume that when you talk about marketing, you're automatically talking about "Tactical" marketing - placing ads, generating leads, sending out mailers, attending trades shows, creating brochures, implementing a follow-up system, and so forth. They fail to realize that the "Strategic" side of the coin - what you say, how you say it, and who you say it to - is almost always MORE important than the marketing medium of WHERE you say it. So, What's The Difference Between Strategic And Tactical Marketing? The distinction between the two is huge. "Tactical Marketing" is the execution of your marketing plan, such as generating leads, placing media, creating marketing tools, and implementing a follow-up system. In other words, it's the medium in which your message is delivered. "Strategic Marketing" has to do with what you say, how you say it, and who you say it to. In other words, it's the content of your marketing message. Strategic Marketing starts with understanding your customers and the things that are important to them, understanding "WHY John Smith buys". "If You Want To Know WHY John Smith Buys What John Smith Buys, You've Got To See The World THROUGH John Smith's Eyes." Just putting a marketing message in an appropriate medium for John Smith to hear or read is not good enough. The strategy must derive from an understanding of what's important to John Smith. Otherwise, this tactical part of the marketing process will be much less effective, resulting in ads that under-perform. Many companies try to figure out how to sell more before they find out how to provide a solution to their consumers' needs. The procedure for accomplishing this is exactly the same every single time, for every kind of business. It's The Advertiser's Job To Pay Attention To Human Nature.
Buyers Always Want To Make The Best Decision Possible. Strategically, marketing programs and advertising should get the attention of target market prospects and facilitate their decision-making. This lowers their risk for taking the next step in the buying process. By understanding what's important to your target market, you can then put together a strategy that gets more qualified prospects to call, reduces your sales cycle, and increases your conversion ratios. AFTER the strategy is in place, the tactical execution simply consists of testing and implementing your strategic plan. Good luck with your marketing efforts. ¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤¤
Get a FREE Comprehensive Tactical Marketing Checklist, simply email your request to TacticalChecklist and ensure that you are considering all of the different types of tactical marketing resources you should consider. About The Author:
Marc Gamble, the author, teaches business owners, entrepreneurs,
and professionals how to acheive bigger, bottom line results
from their advertising & marketing efforts without spending more
time, effort, or money. Learn marketing strategies and tactics
to separate yourself from your competition and become the
obvious choice to do business with. To learn more about how to
improve your own Marketing Efforts and Achieve Better Results,
visit: http://www.MYMOnDemand.com/vpc1_mgnm
Email: mgamble@mymondemand.com
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Why cutting your prices is like cutting your own throat.
It's the oldest sales tactic in the world?
And one of the worst?
Price cutting.
Before you make your next price cut in the face of sales resistance, the question you have to ask yourself is not, "Does it work?," but rather, "Can you live with the bargain?"
Here's a pop quiz: you ? in your role as salesperson ? go for the close. You ask the prospect to make a commitment and they don't. What's your first response?
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And you ask it almost before you ask them WHY they won't buy.
And it's not only when they tell you they won't buy. Many people in sales mentally calculate the discount into their profit calculations, and start discounting even before they try to close the deal. In almost every sales job that I've worked in, people faced with an end-of-quarter crunch to "make the numbers" start playing the discount game. In many industries, it's become common practice to give away all the profits, and many customers are trained to expect it.
Trouble is, people are not usually 'not buying' because your price is too high.
If you've taken the trouble to establish the real of your product or service, you ? and your prospect ? already know that the value far exceeds the price you are asking. (If not, you better go back and rethink the math.)
So if they are saying "no," or simply not saying "yes," it either means they are experienced buyers waiting for you to spontaneously cut your price, or it means they just do not see a sufficiently compelling value?yet.
Cutting your prices will almost never lead to new sales if they didn't plan on buying in the first place, and the effect on your profits can be devastating. Follow these numbers:
Let's say you sell a product for $100. Your cost is $70. That means it carries a thirty percent margin-your profit is $30. Now, to make a sale, you are "forced" to cut your price by twenty percent. Your new selling price is $80. All things being equal, your profit is now $10-instead of $30. That means a 20% price reduction cost you 66% of your profits.
TWO-THIRDS OF YOUR PROFITS for a 20% price reduction!
Cut your price much more and your profit quickly goes to zero. Or lower.
And that's not even the worst of it.
Once you lower prices, they tend to stay low. That $100 widget you just sold for $80? Well, sorry to say, but it's now an $80 widget.
Even more damaging, your like-minded competitors will almost definitely lower their prices, and you, my friend, are in a price war. To win in this scenario, you need deep pockets to sustain a losing position for the duration.
So for these three reasons-depressed profit margins, permanently lowered prices, and the devastation of a price war-it's a bad idea to lower your prices to buy business-regardless of the economic climate.
What can you do instead?
The two main strategies are clarifying and quantifying the value, and packaging products or services to maintain higher prices.
Here's an interesting example. One of my clients-a software company-had a hot prospect who didn't want to buy the typical contract for software maintenance. They felt that 18% per year was just too expensive, and wanted to pay ad hoc instead.
My client knew this was a bad idea. Customers without maintenance contracts typically become your worst. Why? Because they know it's going to cost them each time they pick up the phone for support, so they try not to. Thus, they don't get the right level of service, they don't know how to use the product and they don't get the results they paid for in the first place.
And even though it's their fault for skimping, they point the finger at you and badmouth your company.
On my advice, my client offered the prospect a four year non-cancelable maintenance contract, and gave them the first year for free. And although it was a 25 percent reduction in total purchase price, it never lowered the per year pricing, and it actually guaranteed more than the prospect's original commitment.
Plus, my client locked in that customer for four full years, during which time they rightly expect to sell them additional products and services.
Price cutting is the "lazy man's" response when it's hard to make sales. Unfortunately, it may not boost total revenues, and results in drastically lowered profits on the sales that do get made. Often the outcome includes permanently reduced prices and margins, and even a price war, which has disastrous consequences for all players, except very deep-pocketed ones.
Sell the value instead. Spend the time to discover what your prospect is trying to accomplish, and make sure your product or service helps them do that. Then establish the quantifiable financial impact, and sell them that. Or package, bundle or go for the long-term, multi-year commitment.
There are other approaches that not only maintain price levels, but even support higher ones. To get an overview of those approaches, visit http://www.lemberg.com/tipsandtools.html and download "5 tactics to avoid price cutting."
--PL
© Paul Lemberg. All rights reserved
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