Business Strategy 2 Business Plan Part 5 Sales and Marketing

1. Business Strategy 2 Business Plan 5 Sales and Marketing: Hello and welcome to this course. This is business strategy to business plan part five. And in this part of the course, we're looking at sales and marketing. Hi, my name's John Colley. I'm a 30 year senior investment banker and I'm an entrepreneur on I'm really bust to be here on to be sharing this course with you, particularly as I think I'm gonna find both the business strategy side of it and the business place under it really super helpful. Now this class is perfect for you if you want to better understand business strategy and at the same time learn how to write a business plan at the end of the course, you will have written your comprehensive business plan simply by following the course projects step by step. Now, because it's such a long course, I've divided it into 11 separate parts, and every part of the course takes you a step closer to your business plan. In this part Part five, we're taking a look at sales and marketing, so we're going to look at some of the frameworks that apply to sales and marketing that will help you to develop your strategy to ensure that you get the best return possible on your marketing investment In this business strategy to business plan course, the course project is going to enable you to create your own comprehensive business plan. Step by step on. The course project in this course is we're asking you to write the sales and marketing section off your business plan, or at least the first draft of it. So I'm sure you're going to find that super easy. There's lots off help there, too, in terms off templates toe help, you put that out together and scope it but never get. Don't follow it by rote. Develop it and apply it to your business as it should be. Because I can't be prescriptive. I can only give you some guidance on what's best. I'm really excited to share this course with you. I know you're gonna absolutely love it. Don't forget to look at the previous parts of this course where we've gone through a whole series of stuff already, and there's going to be holed up more to come after this. Do the whole course in order to comprehensively understand this is strategy. And to put this wonderful business plan together. So Business strategy two, Business plan, Part five sales and marketing. I really hope you're going to enjoy the course and I'll see you inside. 2. SALES AND MARKETING STRATEGY: sales and marketing strategy section. Learning Objective. To develop some frameworks to apply to your sales and marketing strategy, and to help you to make sure that you get the best return you can on your marketing investment section. Introduction. At the end of the day. If you don't sell, you don't have a business sales and marketing. Often filled with fast talking and often ineffective salesman is a core part of your business strategy delivery. So we had better discuss this with you. From the starting point of the classic Five Peas of Marketing, we discuss planning the difference between push and pull. You need them both, and then we dive into the psychology of selling, but only at the shallow end. Aida on the progressive sequence of nine agreements, will help you to think critically about your marketing messages on how you communicate with your customers. Pricing strategies are more complex than you would think. Take a look at the lecture and you will see what I mean. Don't forget to get your briefing on how to complete your business plan in the last lecture . The business plan assignment helps you to draft the next section of your business plan, sales and marketing. Use the headings in the assignment or alter them to suit your business. And don't forget to apply what you've learned in this section about sales and marketing. At the end of this section at the end of this section, you will be asking your sales and marketing directors some difficult questions. Don't forget to tie this section back into some of the things we've already discussed. Competitive advantage. Market positioning on the customer value proposition to name but three. This section more than most, is a bridge that spans a number of sections, both here and in your business strategy. So think holistically on do not put each of these topics and separate on isolated silos. 3. The Five Ps of Marketing: Let's take a look at one of the absolute classical marketing models, the Five Peas. The five piece of marketing is a fantastic framework for starting any strategic discussion on marketing on I'm going to go through It with you, and I'm going to show you why this works so well. It also is known as the marketing mix. The five peas are product price, promotion, place and people. Let's take a look at these one by one product, the product and services that your business office or this being offered by business. Now we've looked at these, or we'll look at these in great detail. But you need to be clear about what your products are, what your services are and what you're offering to your customers. But you need to think deeper than that because you also need to think about the function of the product, the packaging, the appearance, warranties, qualities, differentiation, the value added. So it's not just this is my widget. It's having an in depth understanding off what the widget offers to customers, how you're going to present it to them, what you're going to make it look like in order to make it look really attractive and appealing, so there's a lot of in depth research that you are in love to be in depth understanding that you need to do to really understand your product. Price will do a whole section on price, but pricing is a whole strategic board game in its own right, because you need to think through how your pricing will impact your customers. And remember, it's not just the selling price itself. It's any discounts you offer any payment turns, credit terms, other price matching services, any offers you're going to run. And, of course, you have to make sure that your price is consistent with the position of your company and the product in the market. So if you're offering a Louie Vito handbag, you don't price at $10 because there's obviously a complete mismatch between the high quality product on the $10 offer. Unless somebody has not to assume that maybe it's a fake, which, obviously you wouldn't want to do so, you need to ensure that your pricing strategy aligns with your products. Promotion is the is the activities that make your products known to prospective customers. So in the finally know me like me. The promotion is all about helping your prospective customers to find you, know you and like you, and then ultimately trust, pay and evangelize you. But you need to have strategies that will promote your products in the market. Now these can be sponsorships, advertising PR. Whatever you do, you can do them offline. You can do them online, but you have to remember, with promotion, costs can be substantial. So you should always be thinking about creating a return on investment analysis when making promotion decisions. One of the key questions to ask is. What is the lifetime value of a customer? Because if you know what the lifetime valley of your customers are, and that basically is defined as everything your customers will spend with you until they stop being a customer. And if you look at your customers in the round, you'll end up with an average figure, then you. If you understand what the lifetime value is, then you can understand whether or not you can afford to run a promotion if you know how much the information's gonna cost. Because obviously you want the cost of acquisition of the customer from the promotion to be a lot lower than the lifetime value, and it should get it the other way around, then clearly you're not gonna be in business for very long. Place is all sorts of geographical issues, but where your products and services scene made, sold distributed the whole geographic value chain, if you like, and you need to understand the implications of that because there are cost implications, their time implications, there could be quality implications. So it's a geographic challenge. If you like, of creating and distributing your products. How accessible are your services to your customers? Can they get them easily? Can your customers easily find you? And of course, you have to remember that your products have to be available at the right time, in the right quantity and at the right. Quality. People means all the people within your organization and who are helping you to deliver your products and services so it can involve people in your supplies. It can involve people in your distributors and your sales teams. So it's your staff, your sales force inside your business. Remember that people decisions are often centered around customer service. You're really talking about the interactions you're gonna have with your customers. So the question you need to ask is, How do you want your people to be perceived? And how do you want them to interact with your customer base? So when you're initially devising your marketing strategy, this five p framework is a great foundation on which to start the conversation on. Build up the various elements off your marketing mix. They do work best for the traditional offline business on. You will need to adapt them to a certain extent for the offline activities of your business , but nonetheless, the five p still hold good. And you should think through these as critical foundation steps as part of your strategic planning. And, of course, you'll need to express in your business plan exactly how you're delivering them. So those are the five peas off marketing a great foundation framework to start your marketing planning your most strategic analysis in your marketing on I hope you find that very helpful 4. How Can You Plan Your Marketing?: as part of your strategic planning, we're going to take a look now at how you can plan your marketing. Marketing, like any other business activity, needs careful and systematic planning. It's important that your marketing has a consistent message on that. You consistently on regularly get out and get your message to your market so you need to devise strategies. Andi tactics. So what are your marketing goals? Well, you have to start with your value proposition on. Make sure you're clear about what that is. Then you need to evaluate your target market and your customers. You need to ask yourself, What is your competitive position? Visit the your competitors. What promotional strategies will you execute? And how can you optimize your distribution channels and, of course, money? How much will this cost? Remember, you have to have a very clear idea off what your lifetime customer lifetime value off your customer is and therefore what your cost of acquisition of your customer is. And if the two don't marry up, then you're in big trouble. You need to actually go back to first principles on that sort that out. But here are five key questions to ask in your marketing planning process on, I hope this framework will help you to work your way through a marketing plan. The first question is, Where are we now? So what you're having to do is assess your current situation. It's like any appreciation analysis where you're starting off. The first thing to understand is where you are now. If you want to get somewhere, then of course, you have to understand where you're leaving from, because otherwise, how can you have a road map to go from from A to B A. If you don't know where is so you need to conduct a marketing order it. You'll need to do some ratio analysis on your profitability in your performance. You do need to do your competitor analysis to understand who you're competing with and your customer analysis to make sure you understand who they are. Now. Cotler, who's a great academic and writes a lot on marketing in 1999 on his book and it was called on marketing, suggested that there are six dimensions of interest to the marketing auditor. So we're not talking about the audit off your existing marketing activities. The first of these is the external environment macro and micro. So you're doing an external analysis, then, internally, you need to look at your marketing strategy, your marketing organization, your marketing systems, your marketing productivity and your marketing functions. So those give you six clear headings, your audit of your existing business and your existing marketing activities. Information from the audit is then organized using a SWAT analysis. Strengths, weaknesses, opportunities and threats. Things to look at is our strategic drift, where your marketing has bean drifting away from your strategic objectives. What your competitive advantages and making sure you're communicating it and your corporate capability. What resources do you have within your organization for making sure you can deliver this marketing plan from this match? The organizational strength, SWAT analysis to the marketplace and how you're gonna overcome Organize each own weaknesses . Don't forget in the SWAT analysis, the S and the W. The strengths and weaknesses are the internal factors, So the next question is, where do we want to be? So you now have to take your corporate strategy, missions and objectives. So part of the whole strategic planning is to set out a clear objective on a clear mission strategy. So with those in place, you can then address your marketing strategies and say, How can our marketing strategies match up with on deliver the mission statement on the corporate strategic objectives? For this, you need to look at the BCG matrix. So you're looking at the the current the market position on market share off your product portfolio and asking, You know what's the right strategy for each product you have to look at? You know, the stars, the dogs, the question marks on the Stars talks, question bugs and the other one the four quadrants in the marketing mix in the and the BCG matrix. So stones cash. So the next thing to do is to consider your marketing strategies, and for that you need to use the BCG matrix. Andi, evaluate your product portfolio using the BCG methodology. So which is your stars, which are your dogs, which your question marks on which your cash cows and what's the right stretchy for each product in your portfolio? You have to adopt the right strategy for the right competitive strategy for each part off the product for failure. Are you going to go? Niche. Are you going to get a cost leadership. How are you going to take the money from your cash cows? Invested in your question marks along this sort of thing. So getting your claret getting getting clarity on where you want to be is really important . We can also look at market segmentation now the STP framework, which we've looked at segmentation, targeting and positioning. What we're looking to do here is to identify the right markets by identifying that the right market segments for your products. We need to understand how you're gonna position the product correctly in its market, how you're going to differentiate it to make it attractive to the customers and how you're going to target the customers most likely to buy the product. The next step is how might we get there? So what a beer. What are strategies to achieve our objectives? And here we start with the marketing mix the five peas. And don't forget that although the five peas are largely offline, you also need to have a clear digital marketing strategy as well. The next question is, which way is best? You've got some roots there. You now have to make some choices. You need to set some clear criteria, screen the opportunities and then make some choices about which option you want to take to do this, of course, use some financially financial modelling techniques to try to work out what the likely outcomes are of different investment strategies when it comes to marketing run scenarios. So you have an upside and downside. Understand what might happen. But you need to make some decisions about which is the best way forward for your marketing strategy. The last question is, how can we ensure success? Well, the first step is to make sure you have an implement to your your people, your staff, your sales force. You need to anticipate any problems that might come up and try to have solutions ready for them. And that's part of the scenario testing. But also you need to ensure that management control is exercised. Management are measuring the results on giving feedback into the process so that the strategy can be improved on the go, as opposed to running it for a year and then seeing what happened, ensure that you monitor results of your marketing back to your original objectives. I want to invite you just briefly to think about the difference between strategic and tactical planning. When evaluating your marketing strategy, remember the beginning? I said. You need your strategies and tactics, but what's the difference? Or strategic thinking is longer term on broad focused. So this is the strategic planning. This is that the big picture stuff in the Army, we used to say a big hands, small map, very broad focus, the key task of finding the market in the competitive position and dealing with that sort of thing. The tactical is short term and narrow. Focus. So it's in a big map. Small hands, essentially day to day marketing activities is what you're looking at. So you're really focusing on the step by step stuff for making sure individual campaigns and individual initiatives are are thought through and executing carefully. So let me summarize how you go about planning your marketing. We started, If you remember, with your corporate objectives and mission statement from your business strategy on this course is all about helping you to develop that, that those objectives, that mission statement and your business strategy, you then have to conduct your marketing order it. So you're looking at your products, your resources, your distribution methods, your market. Share your competitors, so extensive audit on the marketing activities and the marketing strategy you currently have. Next, you have to do some market analysis. We talked about the STP framework segmentation targeting positioning, but you also need to look at your market size the market structure on the current state of growth of your market. For each of your products in your product portfolio, you need to bring in the SWAT analysis so you can assess the firm's current position strengths, weaknesses, internally, opportunities and threats. Externally, you need to then set your marketing objectives and strategies what your marketing function wants to achieve and how it's going to achieve it. And don't forget you got the answer off matrix, and you've got Porter's analysis as well. Then you need to set your marketing budget a detailed budget for the next 12 months and an outline for the next two years. After that. On then, of course, from that, you need to devise a detailed action plan, which is clearly particularly your marketing function, so that the structure of the framework and the strategy for creating and implementing a marketing plan. I hope you'll find the frameworks useful. Your notice that we're going back and we're dipping into models from other parts off this course content. This is why these models in these frameworks are so important. But if you're systematic and you plan it carefully, there's no reason why your your marketing function, your marketing plan shouldn't be a very successful part of your overall business strategy. 5. Push Marketing Strategy: I want to talk to you about push marketing strategy. We can talk about, push and pull, and I wonder, Just push first push marketing seeks toe push products out into the market, which are then found subsequently by prospective customers. This is very much the pre digital marketing strategy. When people talk about, you know well, I know my advertising works by I don't know which half. It's because they were putting ads out into papers and pushing their products into the market, but they really didn't know have any free backers as to what was working and what wasn't. The whole idea behind Push marketing is to gain exposure for a product in order to get interest from prospective buyers. Now this can involve direct selling in showrooms or in shops, but probably possibly by third parties. Point of sale displays are going to trade shows using attractive packaging, which is eye catching, and people are interested to buy it. But for the most part, it's an indirect approach or really building sales and distribution channels to the customer. It does help to create product awareness, but you're not directly trying to sell one on one to the customer, you're tryingto make them aware the product with the advertising on. Then you're trying to create products channels to the market through distributors retailers in order to enable those customers to be able to get access to the product. To do this, you need an active sales team, which is creating these relationships. So that's a commitment on a cost up front, because before you sold anything, you've got to get this this sales and marketing effort out there. From a negotiating point of view, the product manufacturer is going to retailers and distributors and asking them to stock its product. That makes them in a supplicant in the negotiation, which, of course, is a poor position to be in in terms of the power mechanics off the negotiation. They're not asking, saying, Oh, you're such an amazing product. I want you to stock. I want to stock up on it because I know what customers want to buy it. You're going to them and saying, I've got this amazing product and I would really love you to try and set it to your customer base. I'm sure we can do a deal on the price, so it's a week but weak negotiating position. Of course, the firm may not know whether there's any demand out there. A tall and demand forecasting might be difficult if the markets are uncertain, so there's quite a lot of risk associated with this. It's a sort of I've made it. I built it. They will come approach Onda course. They may not come, so it is very much the old pattern. If you look at how businesses have marketed their products and services in the sixties seventies and eighties, this is very much the pattern off the marketing strategy on. We're going to look at how you do it in the modern era with digital marketing in the next lecture. So this is push marketing strategy. You're the firm, you have the product and you're pushing it out to your customer base. 6. Pull Marketing Strategy: Now I want to talk to you about pull marketing strategy. Pull marketing increases product demand by pulling customers towards products and services . A digital market museum suit. Prime case of this where you put out content in orderto attract attention. Customers who then come to you saying I want to buy on the whole idea behind this is that you are establishing the relationship in creating the demand, which then leads to the customers coming to you, so you pull them towards you. Examples are social media marketing, Facebook advertising, that sort of thing. Word of mouth and testimonials. So people talking about your product or giving a testimonial, which P and somebody else watches. And, oh yes, well, I trust what they have to say. So I'm going to go and find out more about this product from possibly by it. If you can get media coverage for your products and services, that's great again. It states of third party talking or delivering content about your product and services, and that attracts attention. And then people come to you. Sales, promotions and discounts, advertising and, of course, email marketing. Absolute classic example. Now marketing campaigns with pull marketing are aimed directly at the customers at the consumers, so they are basically bypassing the channel, going directly to the customer. This then creates demand from the customers who go to the channel, so they go to the retailer. The district is. I want to buy this. As a consequence of that, the retailer or distributor comes back to the firm and says, Please marry, Stop your product. There's a lot of demand for it out there. So by creating this virtual circle, you obviously improve the position off the firm in the whole discussion with the supply on the retailer. And if you remember in the push marketing strategy, the the firm would go to the channel on basically asked to stop the product, and therefore they had a weak position. So the main contrast with Push marketing, which focus on marketing to supply shower distributors and retailers, is that theme. The pull marketing is marketing directly to consumers in order to get them to come to the firm and demand the product advantages. Well, you can build a direct relationship with your customers or your prospects. An email list is a classic example. Before you actually even convert them on by having that direct contract contract contact with customer, you are in a much stronger position to sell to them at a higher margin because you're not necessarily having to give margin to middle men. You have stronger bargaining power with distributors and retailers. I've just explained that because they come to the firm to ask to stop the products and not the other way around. The marketing campaign can create brand equity and product value in the market in the eyes of the consumers. And it creates demand in the market place, which can then be measured and used for further marketing strategies. So you're not. If you like putting on a whole load of stuff there and hoping some of it sticks, you're creating the demand, which you can then measure and build up and respond to him. Disadvantage disadvantages? Well, more or less. Unless you've got very high brand loyalty, it may not work. People may look at your your advertising and actually not responded because they don't connect with your brand. Lead times can be long. Customers may take a considerable amount of time to evaluate the options in the market before they come and make a purchasing decision. You have to create high demand in a market where it doesn't exist before. And if the markets very competitive, that can be difficult. And, of course it requires a consistent and strong marketing effort which costs money on. That is a commitment you have to make in order to create the demand through the strategy. So that's pull marketing. It's got advanced. Uses, got its disadvantages. It has to be part of your marketing mix, so you need to use push marketing where it's appropriate, and you absolutely have to have a pull marketing strategy as well. 7. Understanding AIDA: I want to talk to you now about understanding Aida, which sounds like a sort of Michael Caine film. But educating, retry thing that was, this is not. This is about marketing on. This is one of the fundamental marketing models, which you will come across again and again. And it's also at the heart of a lot of copyrighting because obviously, copyrighting and marketing are completely into changed into into joint. So Aida stands for attention interest, desire, action on what we're talking about. Here are the stages that customers go through psychologically, have not even realizing they're going through it. But they are the stages they go through from first coming across the product to actually making a purchase. So it's the four stages off the customer purchasing experience, and I want to go through each one. So you really understand what's going on here and why it's going on. The first step in marketing is really all about how do you attract interest? How do you get people to realize you have a product that's even out there before they connect with it in any way? You shouldn't assume that they already know about it. You have to actually get the word about it out there and get people's awareness heightened . Now there's different ways of doing this. You can use guerrilla marketing tactics. You can use disruptive advertising. You can use ultra personalization, patent interrupt, marketing all these sorts of techniques. But the basic issue is that you are coming up with marketing strategies that make customers aware of your product or service. The next step is interest. This is where you're getting their attention to deepen from basic awareness, so their level become their curiosity's aroused. You know, they want to know more about your product. You know, this might be addressing a nascent need they feel, but then really, quite worked out why. But they're definitely interested to know more. One of the things you have to do from even this stage is to communicate the benefits and not features. So example. If you have a computer and it's got a 36 inch screen, that's a feature. So you say so what? It's much easier to work with. That's the benefit. So you have to go through this. So what process and come up with the benefits of your products and services. Explain them to your audience. It's all about deepening that relationship very early on. Desire is moving your audience from the I'd like it to the I Want it phase. So you're helping customers to understand why they need the product, not just what the product can do for them, but why it's important to them, so you can see it's a step further on. Problem solving is is where I often look at it. Any piece of good marketing presents a problem and then makes the customer aware that they have the problem on, then solves it for them on this desire, peace is waves. You're showing them that you're solving a problem for them on. That makes them want to have it because they have the problem and they want to solve their problem. You're conveying the value off the product or service and why the customer needs it. The final step is the action. Without this, there would be no sales, so it's a critical step. Take action and make the purchases what you're telling them, so these are often called calls to action or C t A. So if you hear that phrase, that's what we're talking about this is in every piece of marketing. Whatever you do, you need to be telling what the customers should be doing next. And that's the call to action. The immediacy off that response is really important as well, because if they don't take action immediately and they go off and do something, the odds are 9800 to 1 that they won't come back or they're very unlikely to come back on and do anything further. So you absolutely have to get them to take action at that point in time. And you need to create reasons for that on their various ways of doing that. But one of those is scarcity, so you can take it away after 24 hours, and another one is to remind them that they might be missing out on something fomer. It's called fear of missing out. I don't wanna go too deeply into A with the psychology underlying or this. You just need to understand these four steps at the moment because the main criticism off the Aida model is its simplicity has almost has too little in it. So here's a little bit extra deepening the thought this one is, as you can see, that exactly. Trip off the tongue. I'd cast aid, CASS. Action, Interest, desire. We brought that much, Mary. What confidence, Then action. And then at the end, satisfaction. So I guess you can see how they might fit together. This one is Rinne. Another catchy phrase. Reach, engage, activate, nurture. Okay, Same sorts of process. Another great one, Nate. Days. I mean, you know, I didn't make these up, but nonetheless the points. A container. Interesting need. Okay. Attention. Interest, trust. That's interesting. Desire Action, Satisfaction evaluation on dumb Again. It's much more detail into the underlying socks. Psychology of the relationship with the customer. This is my favorite on the one I use quite a lot, which is find me, know me like me. Trust me, pay me, evangelize me on these air the so steps that I try to take people through because what we're talking about is the customer journey. It's the the whole experience the customer has with you. And I like the phrase nobody does the whole experience the customer has with you from first coming across you to actually ending up as a committee customer on the whole object of your marketing should be to develop them through this relationship. But to do that, you need to be understood. You need to understand the steps in the relationship so good. Marketing strategies design and define the customer journey for their customers who actually don't even realize they're going on a customer journey because the really smart marketing makes it absolutely seamless, and you just lead them along on give them the information they need and they feel they're making all the decisions. But you're providing them with the stimulus and the ideas on the interest to pull them through that process. So understanding, I'd Aida. It's a really important concept in marketing, if you like. It's the groundwork for a lot of the psychology and a lot of the steps off marketing frameworks that come after it. But if you can get your ideas around just these four little letters, then I'm sure as the others come along and the ones I've shown you towards the end of this lecture, I'm sure you'll find the whole concept much easier to grasp and to understand 8. Progressive Sequence of 9 Agreements No URL: I want to share with you nine progressive sequences. I wanted to share with you the progressive sequence of nine agreements that you have to get from your prospects when you're trying to convince them to buy from you. Now this is a series from Dan Kennedy, which I think is a brilliant summary of how to encapsulate what you need to do in order to overcome objections from your prospects and get them to the point where they will buy from you. Now, the real point about this is that you have to follow them in sequence and you really have to get them to take all this on board in order to overcome the objections. You can't miss a single one out because you cannot leave any excuses on the table to give them the opportunity to walk away. You have to actually get them all hominins together and get them to the point where they cannot say no it then it's really important to follow the sequence to an understand the psychology behind why you're doing what you're doing. So step one, addressing the possibility, your promise has to be possible and you mustn't assume that they believe it is possible. So whatever it is you're offering, you must get this, this, the possibility that they can achieve the objective with what you're offering and convince them that it is entirely achievable for them to do that. The second is you need to communicate the beneficial nature of your offer. Yes, this will help me, but it must be of sufficient beneficial nature that is going to help them enough that they will want to take action. And that's the critical thing. It can't be a very small beneficial been a benefit. It has to be a really substantial major benefit that they will want to then purchase from you in order to achieve that benefit for themselves. Attainability. Now this is different from possibility. Yes, possibility is, it can be done, but practicality is all about attainability, which means that it is something that they can achieve. The question they're asking themselves in the back of their mind, is this practical for me to do this? And it has to be practical and you have to show them that it is practical for them to achieve it. You know, you, you, the instructor have achieved it, but you have to convince them that they can achieve it. And that's a different step. It's a step further on. Personal attainability means that is within their reach. And the best way to do this is through a wide range of diversity, if you like, of testimonials. At least one if not more of these testimonies will connect to them and demonstrate that it's attainable for people like them. So you have to cover a wide range of situations, a wide range of types of people, because they will want to find some example in that, that connects and resonates with them. So the volume of testimonials is important, but the volume also build credibility because there are lots of people telling them that this can be done. The reasons for prior failure, not the prospects fault. Now this is really, really important. You have to excuse them that prior failure, you have to say to them, It's all right. It wasn't your fault that he didn't work last time. Because more than anything, fear of failure and fear of criticism will put them off from buying from you. And that's much stronger than the possibility of gain. So if they don't believe that they can overcome this fear of failure, they won't buy because the fear of failure is greater to them than the possibility of game. Now, you do this, you need to communicate from them that your solution is different. Everything they've tried before that is unique, that is profoundly a new way of doing something. So they're not just getting some incremental improvement there actually going to overcome this failure in the past. Because you've got a new way of showing them how to achieve what they need to do. Really important to get over this fear of failure. The personal beneficial nature of the alpha has to be important because you need to connect with them on an emotional and very personal level. So you have to provide a reason why taking action makes sense for them personally. And that personal touch is really, really important. Number seven is about the advantageous or urgent timing. And here what you need to do is to convince them and give them reasons. Why now is the optimal time. Why there's a reason to respond now and not later, because if it later is what they think later never happens. I'll never come back to it. You have to get them on the hook now. Now you can do this through scarcity, through urgency, through some sort of ideal timing argument. But the, the essence of the, the point is that you have to convince them to take action. Now, number eight is personalizing this advantage notice or this urgent timing. Now you can give them a specific deadline which will help to overcome the reasons why they think now is not the time, but you have to give them a personal reason why they have to do it and why they have to do it now. So you're taking it a step further. And one of the reasons for advantageous time you might be scarcity. But for them, you'll making a personal offer. Maybe it's tied to a bonus, maybe it's tied to a specific deadline. And therefore for them, that deadline exists, it may not exist somebody else, but for them it definitely does exist, and therefore they have to take action. And finally, a personal appropriateness. Y, this is the right solution for them. Why it's personally right for them. Now this will have some different answers depending on which niche that you're in. But you do definitely need to get that across. Personal appropriateness is really, really important. So in order to get your prospects ready to buy from you, they need to believe that your solution is the onset to their need. They need also to understand that you have addressed every single possible objection. They may have to not buying from you now. And that's what these nine agreements do. And by the time you got to the end of that, there'll be so busy nodding their head that they won't be able to help themselves. So it's a psychological progression of agreements where you're step-by-step, overcoming the objections your prospects might have to buying from you. Now, brilliant piece of market psychology. It's from Dan Kennedy. And you really need to see how you can build this into all the sales processes that you put together. 9. Pricing Strategies: Let's talk now about pricing strategies. You will recall that in the four p's model one of the peas is pricing on. This is a critical part off the marketing mix, because in the business plan, you've got to explain your pricing strategy, junior pricing policy. So you need to understand exactly what you're doing. So pricing strategy is not just about what is the price. It's about why the price is what it is on. This is really critical Now. There's a whole range of different options and variations for pricing strategies. I'm going to go through several of them now. It's very difficult to really work out a the right order to present them to you in because they are to a degree mutually exclusive, and it's almost like they're around a circle and you're taking your pic from one or the other, so I'm going to present them to you. But don't necessarily take the order of these as being in any way significant. Let's stay start with value based pricing. Essentially, what we're talking about here is that the price of the product is set high based on the perceived value rather than historic competitive costs. The example of this, of course, is Apple, where the apple prices bear no real relation to what the competition is charging. They know they've got a beautiful product, beautifully designed, fantastic functionality, amazing brand value. So they want the price to this guy, and they make big profits as a result. So that works really well for them, on their focus is always on increasing the perceived value of the product in the eyes of the customer. It's all about high value on that allows them to charge a premium price. Variable prayer based pricing is straight out of Casco Proo. Producer theory on this basically sets the product price based on the variable cost or the product, plus a markup. Now it ignores the fixed costs gone into the tooling or the setting up of the manufacturing house like that on those, regardless of sunk, historic done. Forget about them. So you simply look at the variable price, the variable costs, which is the marginal cost of production to produce the item on. Then you put a profit margin on top of that, which means your prices could be very, very low indeed, because that profit margin could be any three cents on. If you want to have a really competitive price, you need to make sure that you're still covering your costs. But you can then control your profit margin by how much of a head amateur profit you are paid to give away to the customer. High low pricing is a strategy where you start with a high price for your product on then, over time, during a range of promotions, you offer lower prices for product or service as the product becomes more mature as the market becomes more mature, maybe you've got a new product coming out later on so that that will superseded or whatever . Well, it's a bit like if you think about computers of being change all the time. The iPhones mean changed all the time. So when the iPhone five come came out, it was the most expensive iPhone in the market. Now, over time, it's prices dropped. At the same time, new iPhones have been coming out extensively. Higher prices, but you consist, get started high and then went low. Price skimming is a strategy where you start with a high price, which is adjusted down over stages to attract more and more price sensitive customers. It normally works in a market where there's little or no competition on. What you're trying to do is to get as much money out of each cohort off customers as Ugo. So you start off with the highest price on the price. Insensitive customers fill their boots. Once you sold to all those, you reduce the price down to the next level on the next level of price sensitive buyers, then jump in you, then take it down to the next level, and they feel so you're filling in each cohort but getting the maximum price from each one . As Ugo Lost leader, pricing is a common strategy in very competitive markets, highly competitive markets and basically here you're aggressively pricing below cost to stimulate sales, and it's aimed was well at simulating other sales of more profitable goods. Now the obvious example of this is razors and razor blades, because the cost of a new razor with a couple of blades attached to it is actually at a loss to the cost of manufacture is quite cheap, but the blades are very profitable and you're going to use many more blades in the life of your shaving than you are handles. So they give you the handles really cheaply, and you pay through the nose for the for the razor blades themselves. Penetration pricing is used to quickly gain market share on where you initially set a low price and it's used. Typically buy new entrance toe. Enter a market. Early bird pricing as well comes under this heading where you're rewarding the first people who buy into something, and then the prices go up in an extreme form, this becomes predatory pricing penetration Pricing is always a short term strategy. Predatory pricing, however, is where you're using very low prices to drive competitors out of the market and create barriers to entry over an extended period of time. So you need to, um, you know, basically hold this price really, really low until your competitors are forced to go out of business or to get out of that particular market. For that run out typically takes place during a price war, and often the firm is prepared to sustain losses during this period in the hope that once they are not too competent competitors out of the market, they can then put their prices up again on for a higher at a higher price and, for an extended period of time, make more money back than they lost in the predatory pricing phase. Price discrimination is where you charge different customers different prices for goods or services. Classical example of this is the difference between geographic markets often some things cheaper in the US and its more expensive in the UK, or I'll have something I'm selling in the UK But because of local purchasing power disparities in the country, say, like India, that product will be offered for a lower price in India still has the same value and pro rata to the buying power of people in India. It's still quite inexpensive product, but you have to adjust the price and have a discrimination free price. And that's not meant to be a negative. But you discriminate between your markets a new price accordingly. Price fixing, which is often illegal, is an agreement between market participants to collectively lay raise or lower prices to control supply and demand. Now, the obvious international example of this is OPEC, the price cartel where they, the oil producing countries, have get grouped together, and rather than undercutting each other all the time, they agree to limit their supply in order to control the price off oil. If you have a there was a big bust up in the UK market 20 or 30 years ago between cement producers who were controlling the prices on that caused a big floor and you have in the Monopolies and Mergers Commission in the UK, one of whose task is to prevent people using their market power to control prices. Other pricing strategies. And I haven't got time to go into all of these, but you'll be able to look at look some of these up and you'll probably be familiar with some of these. Pay what you want at one extreme. So if you put something out there and you just invite people to make a contribution, patri in the website Patriot is a good example of how that might work. Bundle pricing where, if you by six, you know you get for the price of five, so by buying a bundle, you pay overall less than you would if you bought them individually. Freemium pricing is where you give something away and then you charge for extras added. On top of that, you see this very much in APS, where you can get the app downloaded for free from the Apple store. But then you have to buy in APP extras. If you want to carry on using the app or if you want Teoh, get a particular functionality. Psychological pricing is where you play games with people's minds, and this is very much seen online, where the received wisdom is that prices ending in a seven so better than prices ending in a nine or zero. So you have a $47 price rather than the $49 price or $50 price. Purely for psychological reasons, people feel they're getting a better price. Captive pricing is where you basically sell one product. But then, in order to use it, you have to buy a second product on the prices on those to a very different classic. Example. Printers and printer ring. You can buy a very expensive printer, actually quite cheaply loads of functionality. But the printer ink is unique to that machine, so you have to then go back to the manufacturers of the machine, pay a huge amount of money for the printer ink in order to use the machine. That's how they sell printers. Optional pricing is where you paying extra costs or extra money for additional options. And if you think about buying a car, you get the basic model. Oh, would you like air conditioning? So, yes, certainly that'll be another $1000. You'd like seats in your car, sir. Very good. Another $1000. You'd like wheels on your casa. Excellent. Another $1000. I'm joking to make a point, but you understand what I mean. You get a whole series of optional extras, every one of which costs money on then. Competitive pricing is where the firm looks around the market and looks at what his market is competitive are charging on, then sets its price in regard to where it wants to position itself with regard to its competitors. On that may need to a loss making situation. In the short term, it may need to have a profitable situation sorts of, but the driving strategy is to be competitive, and therefore the price is set on that basis. So that's a pricing strategy is really important that you understand there's an awful lot of thought and theory and thinking behind pricing. It's not just a sort of an automatic number picked out of a net at the air, and it's worth you giving serious consideration to your business strategy about how you price your products and services and also it being able to explain in your business plan that you have a logic and a rationale for the prices that you charge. 10. Sales and Marketing in the Business Plan: I want to tie in now the sales and marketing part off the business plan with your marketing strategy thinking so that you have a clear understanding of how your marketing strategy is goingto be described and explained in the business plan and some of the frameworks and the key headings you will need to fill out in order to do that. Remember, Sessoms Acting's a really important aspect of your business plan, and it actually takes up a whole section off itself on. The headings for that are on the screen now. Basically, you've got your marketing and promotion. I don't need to read it for you. You've got your selling strategies, your distribution strategies, your pricing strategies and policies. All these don't forget. You can download this. Pdf from the resources section so you'll have all these notes. You also have the full book full business plan format. Then it goes on. You've got to go through your fixed price time materials, your viable business model, sales and marketing resources. How your price. The product. Watch the margin structure in the commissions payable. So these air main headings in your sales and marketing in your section in paragraphs in your business plan Andi, as if you have these ready. As you are doing your strategic marketing plan, and you are thinking about how you're going to be putting this forward, you'll be able to make notes and transpose some of these thoughts straight into the business plan, which makes it much easier to do. Now let me give you a few other frameworks to think about, which will help you in terms off developing your business plan in terms of the sales marketing, I've got a few headings for you here. You think about the sales models that you're going to be adopting. I want you to look at the sales tools that you may have at your disposal. And how are you going to enable sales within your organization to encourage people to sell ? Encourage people to be commercial and proactive? You'll need to have a launch plan for any products and services you're bringing to market. Think about how you're going to generate leads for those opportunities, how you're gonna nurture those leads and how you're going to take the conversation forward with the the leads that you do generate in order to convert them to customers Now. There, of course, is another issue here between inbound and outbound marketing. Or, as I have it here, outbound and inbound marketing push vs pull marketing. And the point here is basically one is if you like the old fashioned marketing, which you do off line, and the other is very much the digital style of marketing, which we're all getting very much more accustomed to. And again, you'll need to have a slightly different strategies for these two. And again, I'm going to give you a couple off frameworks that you can work with to see which works best for your different aspects of your marketing. So for your push marketing your outbound marketing, this is more traditional. This is more off line you need to think about. Maybe events, campaigns. You're going to run press releases, advertising, telemarketing, sponsorships, diesel, the traditional marketing activities that companies have been doing for decades. However, in the modern digital world, things have changed a lot, So you think to think about inbound marketing. This is where you create content out there on the Internet, which people find, and then it brings them into you. So this is also known as pull marketing. Andi, Obviously, it's called digital marketing, but you'll need to think about thought leadership. So creating articles on a log on information which you can give to your audience, Which brings you to their attention. How are you going to use social media to advance your products and services in the market? Do you understand how to get the best out of S E O? Do you know what S CEO is? Search engine optimization? Making sure that whatever you put online, it is well formatted for the search engines to put it up and rank it highly. Think about content marketing. What content are you gonna producer? You're going to produce a podcast. Are you gonna produce videos? Are you going to produce written content? Are you going to produce infographics? Whatever it is you need to think about your content strategy and, of course, social monitoring, keeping an eye on what people are saying about you and responding to it. So if people ask you questions on Twitter, you need to respond to them. And of course, you need to think about your online branding and how that's gonna work. You need to be consistent across all aspects off social media. So those are some thoughts on the more traditional aspects off marketing. Remember, too, that sales and marketing has its own paragraph in the executive summary. You do that right at the end, but don't miss it out. You need to summarise the key points off yourselves, marking strategy and make sure they're included in the executive summary. So that's a heads up on sales and marketing on the business plan. This will help you. I hope to take your business strategy for sales and marketing and be able to move it seamlessly without too much effort. But take the ideas that you develop for your strategy and then explain what you're going to be doing in the business plan on these frameworks, I hope will make that much easier for you to do. 11. Part 5 Sales and Marketing Coming Up Next: Well, congratulations for completing part five, the sales and marketing course. I just wanted to spend a couple of minutes with you wrapping up on giving you a heads up on what is coming up next in part six. So I hope you enjoyed part five. We've looked at the sales and marketing strategy I've provided you with some frameworks, which I hope we're going to enable you to create an amazing sales and marketing strategy. I hope you've done the course project, which means if you have, you at least got a draft of your business plan covering sales marketing, which is fantastic. It's important when you do sales and marketing that you just don't do it on autopilot. You really try to make sure that you're getting the best out of your investment. Now, in Part six, we're going to move on, and we're gonna look or start to look at financial statements. So I've called understanding financial statements. We're going to look at the income statement or the profit loss account, as we say over here in the UK, the balance sheet and cash flow statement on. We're going to take a look at how they all fit together. And, of course, there's going to be in a class project associated with that as well. So enjoy the project in this course on. I look forward to seeing you in part six. Thank you for doing this course. Thank you for enrolling. Don't forget, you can find lots of my courses here on day. Do check them out. If you like them, please leave a review. And don't forget to follow me s so that you don't miss out on any new courses. I'm trying to publish them, at least on a weekly basis.