Whether you plan to launch a public benefit organization, become the next great tech mogul, or sell upcycled garments on Etsy, marketing will play a key role in your success. Before exploring how, let’s take a step back and look at marketing more broadly.
What is marketing?
Marketing is everything wrapped up in the process of delivering a company’s products or services to those who need them most (or, at least those who really, really want them). Customers need—or really, really want—these products and services because they’re useful in one of four ways:
- Form: A ready-made snack is a useful form of food for a hungry person who doesn’t want to cook.
- Place: A bowl of hot noodles delivered right to your doorstep is a convenient service people are willing to pay for.
- Time: Late-night convenience stores are useful to those hankering for a midnight snack.
- Possession: An affordable loan is useful for those who want a car now but don’t have all the money upfront.
To develop useful things customers want, advertising professionals follow a marketing process. They begin by understanding customer needs before developing relevant offerings, identifying buyers, promoting their offerings, and distributing them to customers in a way that generates profits. This is how you put your business on the path to sustainable growth.
Although there’s no set of universally agreed-upon steps, the 5 steps below (informed by Rice University’s excellent Marketing textbook) provide a broad overview.
5 steps to the marketing process
Step 1. Understand the market and your customers
Without customers, there is no “market,” so an effective marketing strategy starts with a detailed understanding of the customers that make up a target population. To advertise effectively, you must understand basic demographic info (age, gender, location), income levels, buying preferences, and how much they’re willing to spend on what you’re likely to sell. This will help you estimate potential sales and revenue.
Gaining this data will help you settle on a strategy. If you’re keeping prices low to sell more, you’ll need to emphasize value and affordability. You’ll also get better results if you reach out to a broad range of customers. On the other hand, if you want to price high, emphasize prestige and exclusivity and narrow in on a more selective target audience.
If you want to achieve a bit of both, create tiered offerings catering to different markets, adjusting your price points depending on whether customers want affordability or prestige.
Step 2. Prioritize a customer-driven marketing strategy
Marketing strategies help convert short-term potential customers into long-term paying customers. Typically, this is done in one of two ways: prioritizing products or prioritizing customers. The first strategy builds a product you hope will sell, while the second understands what will sell and builds a product around it.
Which one do you think works best? Here’s a hint: The customer-driven strategy has led to unparalleled growth for everyone from Starbucks to Apple, Patagonia to Amazon.
An effective customer-driven marketing strategy starts with learning the needs, behaviors, and pain points of your target audience. From there, you’ll develop offerings that fulfill those needs before creating marketing messages that connect those needs to the benefits of your offerings. Finally, you’ll work to maintain customer relationships by understanding and adapting to the changing needs of your target market.
Ultimately, your goal is to earn long-term customer loyalty by offering something that’s valuable, relevant, and different or better than the competition.
Step 3. Deliver outstanding customer value
Customer value is about giving customers a good deal—aka strong benefits for a fair price. If you divide the benefits by the price, is it worth the cost? Whether conscious or not, that’s the subtle calculus going on in a customer’s mind when deciding if they want to buy something.
Generally, customer value includes a mix of four factors:
- Functional value: Does the product meet the customer’s needs and solve their problems?
- Monetary value: Is the price affordable and worth paying for what they get?
- Social value: Does owning this product help the customer impress others or fit in?
- Psychological value: Does the product make the customer feel good about their purchase?
If you want to improve customer value, you’ll need to increase some or all of these four factors. To achieve this, you could improve the features or quality (functional), lower the price (monetary), emphasize interpersonal connection (social), or enhance personal satisfaction (psychological) in your marketing.
While you don’t have to max out all four factors, the more overall value you provide, the easier it will be to attract and retain happy, loyal customers.
Step 4. Build loyal and profitable customer relationships
Growing a business requires you to focus on profitable, long-term customer relationships—ones focused on knowing your customers deeply, providing ongoing value, and building trust. This not only leads to customer loyalty but also (highly effective) word-of-mouth promotion and healthy growth.
Generally, this involves three steps:
- Find new customers: Tap into your market research to reach them effectively. This tends to be the most difficult and expensive step.
- Keep those customers satisfied: Use remarketing and retargeting techniques to periodically remind customers of the benefits of your offerings and how your brand has improved their lives. In other words, make repeat purchases easy.
- Grow your customer relationship: Focus on positive and satisfying relationships with existing customers, as they’ll be more likely to buy something else and recommend your offering to others (as a bonus, this reduces the cost of finding new customers).
Step 5: Capture value and profits
The value built during the process of finding, keeping, and growing your customer base helps companies earn a healthy profit. That’s why effective customer relationship management (CRM) is so important. It strengthens customer loyalty.
As customer loyalty strengthens in the short term, so does the likelihood of them becoming repeat buyers in the long term. Not only that, but potential customers are more likely to convert to paying customers and follow suit.
This boosts company profits, as well as the overall value of the company in the marketplace.
Grow your marketing knowledge
Whether you love marketing or engage in it only because you have to, it helps to understand how the whole thing works. Although there’s far more nuance to the art and science of advertising, the above five steps will help you think more strategically about the products and services you develop and sell.
Keen to tighten up your marketing skills in a unique way by developing your strategic thinking? Check out our guide to logical fallacies.