A business strategy or a marketing strategy is a critical element in the development process of any business:
I assume you all agree that without organized plans, a business wouldn’t be able to make much progress, right?
So the strategy is actually the master plan of the business, planned usually for a year’s time and if well structured and executed, the goals are usually achieved.
What is a strategy and how is the different than any other business plan?
A business plan can be about any topic in the business, for example, a business plan to establish an advertising grid, or a business plan to improve sales in the business.
Strategy is much more general and contains the goals, values, differentiation, execution stages, and measurement of the business.
I kind of like to compare strategy building to a regular GPS app:
What’s the first thing the app does when you turn it on? That’s right – it finds our current location, even before we have even chosen a destination.
The second step is entering a destination – we choose where we want to go.
The third step is calculating the route and escorting us all the way to our destination.
Just like the steps in the GPS app, a strategy is structured in a similar way:
- Where is the business today? (what is the state of the business).
- Where do we want the business to be in a year? (What are the goals of the business).
- How do we get there? (how will we achieve our goals).
So we see that strategy is actually predicting and realizing the development of the business, i.e. “the way”.
To explain how to build a strategy, let’s start breaking down each of the steps I described above:
1. What is the current state of the business
As mentioned in the example above with the GPS, we need to understand where we are so that we can estimate what will it take from us to reach our destination.
The analysis in this case should include:
- What is our market and who are our customers right now?
- Who are the competitors and what are they doing?
- What is the current state of technology? (What’s the tech level)
- What are our relative advantages and what is our differentiation?
- What is our current annual budget to achieve the goals?
After characterizing our current situation, our advantages and the budget, we can move on to the next important part:
Similar to entering the destination in the GPS, here we specify where we want the business to be within a year (in most cases).
This is where our vision towards our business should be reflected.
At this stage we list (as much as possible) all the goals we want to reach with the business in the coming year, considering our current situation and our vision for the business.
At the same time, it is important to be focused and also define what not to do this year. It is very easy to get lost in work, so it is important to be very focused on our goals.
There are strategic goals (such as market share, new audiences, new products, etc.) and financial goals.
Important note – All the goals should be measurable.
Another important note – Make sure you can meet your goals within your given personnel and budget.
I emphasize – This phase should be detailed and precise as possible. This phase dictates the direction and without a clear direction it is difficult to achieve goals.
3. Work plan
This is the most complex part. Continuing our analogy, so far we’ve just turned on the GPS and entered a destination.
Now the GPS calculates the fastest route and accompanies us to our destination.
So now we also need to calculate the route to achieve our goals using our advantages (remember “differentiation” from the first section?)
For each goal we’ll have to write a plan as detailed as possible and set KPIs – i.e. “what are the numbers that will prove to us along the way that we are in the right direction?”.
For example – the plan I’m writing includes “improving income from existing customers by $120,000”.
So my plan for that matter would include things like:
- Improving the relationship with customers, writing a weekly email to customers.
- Adding automations to improve the relationship – automatic responses and automatic emails when the customer performs actions (such as an automatic email when completing a purchase with a gift and an offer of other good products)
- Adding a remarketing campaign on Google and social networks.
So for that plan – my KPIs could be:
- Email report from outgoing emails (each email – how many clicks, how many opens and how many purchases)
- Automation progress report and performance improvement test in parallel.
- Remarketing campaign results report.
- And most importantly – a progress report (Profit progression month on month) and an analysis of how we can improve in order to reach the goal as quickly as possible.
Important points in building a work plan:
- All goals should be measurable.
- Determine the reporting format, what are the monthly reports you will need in order to monitor the progress?
- Each goal needs a measurement plan, i.e. with clear KPIs.
- Each plan should have an owner (such as a project manager, team leader, VP marketing, etc.).
- Intermediate goals are a must. After you’ve defined annual goals, divide them into 4 quarters and define a KPI for each quarter (preferably start low and increase gradually to sum up to the overall KPI).
A short story with a critical lesson
I have a friend who used to be the VP Marketing at one of the leading companies in the world.
He says that every year they would build the strategy and the goals, they would almost regularly write a goal of a 32% increase in growth.
Almost every year everyone would work really hard and reach the goal.
Once he and his boss came to the company’s conference in the US where they met the CEO and he asked them to show what they had prepared.
After a thorough study, he told them: “You are doing too much, I want you to rewrite the strategy with a target of 20% growth and not 32%.”
After preparing a new strategy in which everyone can work less hard, of course, they presented it to him and he’s confirmed it and told them: “Okay, I look forward to meeting you at the same conference next year – let me know the results.”
A year later they both came to the conference feeling uncomfortable. The business grew by 46%!
Conclusion: A focused plan is worth more than a busy plan. It is very easy to get carried away and do more and more things, but this only takes us away from our goals. That’s why it’s important to also define what not to do this year.
Hope you took something from the article, feel free to contact and ask questions.
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