How to Refine Your Marketing Expectations
When you make improvements to your marketing program, what kind of results can you expect? As a general rule, the percentage change in your program will at best correspond with the percentage change you see in sales. For example, if you change only 5 percent of your program from one year to the next, you can’t expect to see more than a 5 percent increase in sales.
Project improvements above base sales
Base sales are what you can reasonably count on if you maintain the status quo in your marketing. If, for example, you’ve seen steady growth in sales of 3 to 6 percent per year (varying a bit with the economic cycle), then you may reasonably project sales growth of 4 percent next year, presuming everything else stays the same.
But things rarely do stay the same, so you may want to look for threats from new competitors, changing technology, shifting customer needs, and so on. Also, be careful to adjust your natural base downward if you anticipate any such threats materializing next year. If you don’t change your program, your base may even be a negative growth rate, because competitors and customers tend to change even if you don’t.
After you have a good handle on what your base may be for a status quo sales projection, you can begin to adjust it upward to reflect any improvements you introduce. Be careful in doing this, however, because some of the improvements are fairly clearly linked to future sales, whereas others aren’t.
If you’ve tested or tried something already, then you have some real experience upon which to project its impact. If you’re trying something that’s quite new to you, be cautious and conservative about your projections until you have your own hard numbers and real-world experience to go on.
Preparing for (ultimately successful) failures
Start small with new ideas and methods in marketing so you can afford to fail and gain knowledge from the experience; then adjust and try again. Effective marketing formulas are developed through a combination of planning and experimentation, not just from planning alone. In marketing, you don’t have to feel bad about making mistakes, as long as you recognize the mistakes and take away useful lessons.
When it comes to marketing, be a positive pessimist with a philosophy of, What can go wrong, will go wrong and we’ll be fine! Try to avoid being too heavily committed to any single plan or investment. Keep as much flexibility in your marketing programs as you can.
For example, don’t buy ads too far in advance even though that would be cheaper, because if sales drop, you don’t want to be stuck with the financial commitment to a big ad campaign. And favor monthly commissions for salespeople and distributors because then their pay is variable with your sales and goes down if sales fall — so you don’t have to be right about my sales projections.
Flexibility, cautious optimism, and contingency planning give you the knowledge that you can survive the worst. That knowledge, in turn, gives you the confidence to be a creative, innovative marketer and the courage to grow your business and optimize your marketing program. And you can afford to profit from your mistakes.