David H. “Andy” Bangs, Jr.
, is a longtime entrepreneur, founder of Upstart Publishing Company, bestselling author, and former banker. Calling himself “Writer, Sailor, Appreciator” (not necessarily in that order), Bangs’s genial insights on building businesses have made him one of the most sought-after experts on business planning. From his home base on the coast of New England, he has penned such perennial business classics as The Market Planning Guide
and The Start-Up Guide
and has coauthored numerous others.
This book, the sixth edition of The Market Planning Guide, is my latest attempt to help you wrestle with the central problem facing your business: How can you attract enough customers willing and ready to buy your products and services at a price that yields you a profit? To make this more difficult, you have to answer that question in a highly competitive and rapidly changing world.
My favorite definition of marketing is the creation, satisfaction and retention of customers. Any business (more generally, any organization) will thrive only as long as it can come up with a steady stream of new customers. Even if you start with a steady base of loyal customers, roughly 30 percent of that base will erode each year due to fluctuations in the economy, people moving out of your trading area, the encroachment of new and indirect competitors, modification in tastes and habits, and a host of other changes. This is inevitable. Change happens.
Marketing is a challenge for all businesses, not just small ones. Look at two recent examples of marketing mismanagement. Kmart, caught between the low-cost provider Wal-Mart and the better positioning of Target, couldnt decide where to focus its efforts. The blue-light specials, which worked brilliantly in the 70s and 80s, lost out to Wal-Marts "lower prices all the times" strategy and Targets more exciting and slightly more upscale offerings. Stock-out problems didnt help Kmart either; half-empty shelves have little appeal in a retail environment. Kmart did do a lot of things rightthe linkage with Martha Stewart provided some ray of hope. But the major strategic blunder of lost customer focus did Kmart in. If you dont know who your customers are, how can you possibly know what they want that you can provide?
The other major blunder is Enron. My guess is that towards the end they had no idea what business they were in. Originally they traded energy, buying energy here and selling it over there. But what kind of business were they at the end of 2001? A trader of financial instruments called futures? A gambling casino, plunging heavily on derivatives? (Remember Orange Countys bankruptcy a few years back? Long Term Capitals bailout? Derivatives are dangerous even for the most sophisticated traders!) What was Enron buying and sellingenergy, water, or who knows what else? One of the major keys to marketing success is to know what business you are in and be able to communicate that knowledge to employers, customers, prospects, investors, and other stakeholders clearly and succinctly. And that means knowing what you sell, to what market, and in what fashion.
If you are in a small business you have less margin for error than the Enrons and Kmarts. You dont have the capital to keep going if you make a serious error in your marketing. If you are in a larger business where your career depends on meeting marketing goals that you may or may not have had a hand in setting, the business will most likely keep chugging along without you. Whether you run a small business unit or something larger, it is in your interest to do what you can to correctly market your products. In any business, some internal marketing will be necessary. You have to sell an idea to your staff, boss, and colleagues. You cant escape the marketing imperative.
This book is structured around 30 questions. As you proceed, new ideas crop up, new doors open, and old doors shut. Youll find that you will revise, revisit, amplify, reject, and otherwise improve your plan over time. This is an organic process, not a neat linear job where you can check off Question 1, Question 2, and so on. Think of concocting a stewyou need a few ingredients, some tools, and time to let the flavors blend. You also want to make subtle changes (add paprika, garlic, grated some cheese). Presentation is important: What does the final result look like? Your marketing plan evolves in the same way. You need a few ingredients. You dont add everything you can find. Selectivity is important. You need information. You need time to mull things over. You need to be flexible enough to make the small changes that separate a good marketing plan from a bland, dull, useless plan. And of course in making both stews and marketing plans, experience will ensure better, more consistent results.
My friend, Pete Worrell, sent me a quotation from Roger Babson, the financier and philanthropist who called the 1929 stock market crash:
Experience has taught me that there is one chief reason why some people succeed and others fail. The difference is not one of knowing, but of doing. The successful man is not so superior in ability as in action. So far as success can be reduced to a formula, it consists of this: doing what you know you should do.
In The Market Planning Guide I try to help you know what you should do. I wish you success!