Common Sense Marketing Plans

By  James Stork
Senior Vice President, Drake Software  

Accounting and tax preparation are relatively recession proof, meaning that this year will differ little from others in recent memory.  Some services will see a decline in client demand, while others will not.  Labor and administrative costs will expand while margins get thinner.  Some clients will leave, and others will take their place. 

Only the details change from year to year -- the cycle itself remains the same.  And while we know that marketing is the process used to manage that cycle, getting a grip on marketing as a function can seem an overwhelming task. 

That's because marketing has become larger than life.  Most libraries carry more books on marketing than they do on medicine, nuclear physics or the entire history of the Roman Empire.  At any bookstore, the number of guides to developing marketing plans is just as staggering -- and each carries a price tag of $30 to $300. 

A quick scan of these guidebooks would make it seem that marketing is only for the experienced.  Pricing, just one component of an overall marketing strategy, requires expert analysis to find the right price point and spread for each product in a given market.  Add to that the requirements for trained professionals in sales, advertising, distribution and research, and the marketing staff will quickly outnumber clients. 

But this style of marketing is of little value to a small firm.  Smal

l firms don’t have the luxury of a large marketing staff, or the resources to hire a lot of outside expertise.  They need a way to take command of the business cycle that dictates their markets and find innovative ways to enhance profitability – in other words, a marketing program that substitutes a simple format and a knowledge of their clients  for the specific expertise called for in most marketing manuals. 

Common Sense Marketing Plans 

Formal marketing programs -- of the sort taught in business schools -- are based on some combination of four "P"s -- Product, Pricing, Promotion and Prospects.  Some marketers add a fifth "P" -- for Place -- to indicate how the product is delivered to the prospect (through the mail, via social media, location, etc.).  They look something like this: 

This formal structure assumes that there is some unique combination of these four elements that are the right "mix" for a given market and economy.  The elements most commonly associated with marketing -- selling, advertising, direct mail, brochures, social media, etc. -- are a part of the element called Promotion. 

This traditional structure for a marketing program helps to simplify the key parts of the program, but it has two major weaknesses.  First, it presents marketing mainly in terms of what the firm needs -- what services will be in demand, what prices will generate profits, or what promotions will bring new clients.  Second, it's intended for use by a marketing professional who understands every nuance of the marketing mix concept. 

There's a simpler approach to marketing.  This approach is based on the common-sense idea that marketing begins and ends with the client.  Marketing is nothing more than determining what the client needs today and matching that need with products and services that can handle the job.  In this approach, all of the elements of the formal marketing program -- including products, prospects, pricing and promotion -- can be summed up in just six words: 

Find a need and fill it. 

If a six-word marketing program seems overly simplified, consider what it involves.  Finding a need involves talking to clients to determine how well their needs are being met today; what needs are being met by other accounting and tax firms; and what needs are not being met at all.  The same discussions are held with prospective clients.  It involves a study of the marketplace, competitors, and how well you and your competitors are meeting client needs. 

Filling the needs, once they have been identified, will require a review of current services and their performance.  Pricing and distribution also play a role in determining whether these services can be delivered to the client at the right time and at a price that represents value. 

Instead of four or five elements that require precise analysis and sophisticated formulas, the common sense marketing approach contains two elements that require thought and discussions with clients.  That doesn't mean that the marketing program can be managed by the seat of the pants, or that it will take less effort than a traditional marketing program. 

This approach provides a shortcut to better marketing by substituting time and energy on the part of the the firm’s staff for an advanced degree in marketing.  The result of the time and energy will be a written marketing plan that guides how the program will be implemented.  

Common Sense Planning 

Effective programs begin with a plan.  A written plan helps to organize the program into small, manageable parts so that it seems less intimidating.  It also provides three essential management tools: 

• A means to visualize the program so that it can be easily understood.
• A set of measurable objectives that help to track progress and success.
• Detailed information about each part of the marketing program that guides day-to-day activities.

Lean, aggressive and profit-oriented firms use plans that are short and to the point.  The plans are intended to be a guide, not a rule book.  Its focus is on how and when the marketing job gets done, not why or by whom. 

The common sense marketing plan is divided into five sections: 

• Description of the market.  The firm is currently filling needs for a set of clients.  Who are those clients?  What needs are being filled?  

This section lists the factors that affect sales, including the background of the local tax or accounting market, its size, chief characteristics, trends and client profiles.                                                                                                          

Clients must be described in detail to determine whether there a common link between them (or, in marketing terms, whether the firm is filling needs for the entire market or a specific niche in the market)? 

• Client benefits.  What are the benefits of the products or services to the client?  

Typically, benefits fall into one of the following categories:  (1) less expensive, (2) better quality, (3) more efficient, (4) more convenient to use, (5) improves the client's productivity, (6) saves time, money or both, (7) solves problems, or (7) improves the client's profitability. 

For each service, list and document with facts all of the benefits to the client.  Then list which benefits are unique -- those that are not being or can not be met by competitors. 

This benefits analysis is critical because a company that can offer no unique benefits will struggle to prosper.  If the analysis turns up no unique benefits, a priority for management will be to create some. 

• Market share.  What percentage of the local tax or accounting market is using those benefits? 

This is time-consuming to calculate, but a

 "guesstimate" usually isn't good enough.  Begin by thumbing through the local business telephone directory for the names of companies that are clients or prospects.  The Thomas Register and other business directories are also good sources of information.  Based on sales to existing clients, estimate the total potential in sales among all clients and prospects.  Market share is the ratio of the firm's annual sales to the total sales potential of the market. 

Given the high levels of competition among tax and accounting firms, it is possible that this market share will be small -- even as little as one percent.  That may be good news or bad, as the following graph indicates.  It is based on what is known as “Porter’s Curve.” 

Conventional wisdom has always held that bigger is better, and that a higher volume of sales at any reasonable margin will bring greater profits and growth.  But there is a problem with growth:  the larger the organization becomes, the less flexibility it has.  In the mid-sized and larger companies, it is often difficult to respond quickly to changes in the marketplace or client needs.  Administrative costs are also higher, as more employees and operating units demand management attention and more extensive workflows. 

In the mid-Seventies, the idea that large also means slow and clumsy evolved into the concept of "niching" -- taking a smaller piece of the overall market and serving it better and faster than competitors.  The question remained whether capturing a niche could result in higher profits. 

In his landmark book “Competitive Strategies,” marketer (and Dean of the Harvard School of Business Administration) Michael Porter defined the relationship between market share and profitability in a way that makes niching an attractive strategy for the smaller distributor.  "Porter's Curve" looks something like this: 

The curve indicates that profitability is highest among companies that either have dominant market share, using sales volume and greater resources to enhance profit levels, or those that niche.  The niched companies have a significantly smaller market share, but use higher levels of service and faster response to justify higher margins. 

The least attractive strategy is to be "stuck in the middle" -- too large to be fast, and too small to leverage market muscle against larger competitors.  The lesson of the curve is that companies unable to take one of the top three market positions might be better served by downsizing, selecting niche markets and focusing on service. 

• Competition.  Who are the competitors, and how do their services compare with yours?  Your  benefits should be strong and fiercely protected against competitors. 

This section requires another foray into the yellow pages, Facebook, and business directories, though the chore should be less time-consuming than development of the client and prospect lists.  For each competitor, build a list of products, benefits and selling strategies as best you can determine them. 

Be careful not to underestimate, ignore or downplay competitors.  Every company has competition, and a clear understanding of the competitor's strengths will help to identify weaknesses. 

• New Business Strategy.  The best services in the world won't be successful unless they gain the attention of the clients who need them.  This section of the plan is critical, so detail and attention to the small points is important. 

Explain the new business development process step by step, from the qualified lead to the initial service pitch to the contract or engagement letter.  Go into detail about how clients are contacted, how benefits are presented, and how services are delivered. 

How will the services be promoted?  If advertising is used, describe the message of each ad and how its message is consistent with the business development strategy.  Pay particular attention to the placement (is it where clients will see it?), design (does it communicate products and benefits?) and call to action (what should the client do after reading the ad -- call to order, inquire about the services, or remember the company name for future bids?). 

Discuss how pricing keeps the company competitive or provides another benefit, yet enables the firm to be profitable. 

Describe which staff members are responsible for new business development, the development cycle, compensation for the developers, and quotas expected of each in terms of contact, queries and closures. 

The plan should be typed, double-spaced, with wide margins so that the readers can make changes and add comments as the plan is implemented.  In its finished form, the marketing plan can easily be distributed to management and employees, and will be an important part of other plans developed by the firm -- including the strategic and business plans. 

Remember that marketing should be fun, fast and innovative.  Within the marketing plan there is plenty of room for interesting and time-saving ideas.  Here are six in use by high-growth firms that can yield solid results: 

• Use motivation signs.  Motivational signs are usually relegated to the firm’s bulletin board, and consist of the safety-oriented posters distributed by health insurance companies or local charities.  But motivation signs can help to keep employees focused on the objectives, with positive results.  Something as simple as -- "Find A Need.  Fill It!" is a natural for all office areas. 

• Take a day for planning.  Pulling the entire staff away for a day to create the marketing plan is usually a good investment.  Move the event to a local resort or conference facility to get away from telephone calls and other distractions.  The day can be taken on Saturday, with spouses joining in the evening for a company dinner and socializing.  The cost is minimal, considering the benefits of a fully derived plan that the entire staff has a hand in creating. 

• Use a facilitator.  Whether the planning session is off and away or done in an afternoon in a company conference room, an outside facilitator can help get the job done more quickly and efficiently.  A facilitator will typically charge $1000 per day plus expenses, but the benefit is that the facilitator has no territory to protect, no special interests or agendas, and a clear sight of the goals for the meeting.  The facilitator's job is to keep the meeting moving, keep tensions and conflict at a minimum, and make sure the job is finished at meeting's end. 

• Meet with clients.  A client-driven marketing program requires frequent, in-depth conversations with clients.  Meeting on a regular basis makes this easier, and provides an opportunity to do a little marketing on the side.  For example, host a weekly social hour on Friday afternoons.  Clients are invited, light food and beverages are served, and the firm  management takes the time to both meet with each client and to present new services that have been added.  The cost is minimal and the payoff significant. 

• Hire college students for the detail work.  College students working toward a marketing degree are starved for real-life experience.  By allowing a student to help develop the marketing plan, the firm gains a fresh perspective at a cost generally just above minimum wage.  Best bet -- use the students to develop prospect and competitor lists. 

• Use written surveys.  One of the easiest ways to identify client needs, and determine how well those needs are being met, is to send a survey to all clients once each year.  Look for honest feedback, and ask tough questions about whether the products, pricing and other details are making the client's life and business easier. Clients appreciate being asked, and the survey process can help to build stronger client relationships. 

Marketing can be an intimidating subject – a process that seems a combination of science and black arts that defies easy description or management.  But it doesn't have to be.  With a well-written plan and a little common sense, marketing can be a painless process of helping clients to find the products they want and need, with the profits accruing to the tax or accounting firm.