Not all that long ago, the acronym KISS was so popular that many executives displayed it on their desks, either embedded in Lucite or sculpted in bronze. Keep It Simple Stupid was the preferred strategy of the time. That strategy – and the acronym — is enjoying a limited revival in these difficult times, especially in the research-obsessed, insight-seeking marketing domain. These days, the tome-like marketing plan is out and the pithy pocket version is in. Or, it better be.
These are difficult times for marketing leaders. The world economy is in the midst of a steep recession, and every business is confronting challenging and turbulent conditions. In this environment, marketing leaders need to abandon the traditional data- intensive, research-heavy marketing plan and begin creating plans that are tight, compelling and relentlessly focused on action.
This article highlights why the classic marketing plan is ill suited to today’s environment and introduces a simple plan framework built around goals and objectives, strategic initiatives and tactics.
Business is rarely easy; customers can be demanding and competitors are almost always hard to deal with. Technological changes mean that companies can’t stand still; the only way to succeed is to constantly be looking for the next big innovation. Marketing leaders, in particular, are almost always under the gun, and have to balance driving sales in the short run with building strong businesses and brands that will thrive in the long run.
There are three factors, however, that make this a particularly challenging time for marketing leaders.
The first factor is the explosion of data. Simply put, marketers today have more information than ever before. As the cost of technology has fallen, the sheer quantity of data has grown dramatically. A Google search on almost any topic will yield several million hits. In many businesses, it is possible to get sales information minute by minute, city by city and item by item. This explosion of data is a wonderful thing in many ways, but it is also a problem; marketers have to find a way to process the information and make sense of it. This is far easier said than done. The tidal wave of information can be simply overwhelming.
The second factor is the growing number of marketing tactics from which to choose. Twenty years ago, marketers had only a few different television networks to work with and a limited number of publications. Today, there are hundreds of television networks and millions of web sites. Choosing between them is difficult; it is simply impossible to understand and analyze all the options.
The third and most significant issue is the slumping world economy. The economic decline in late 2008 and early 2009 has shocked virtually every business leader and economist; the fall has been quick, sudden and deep. Companies that were rock solid eight months ago are now teetering on the verge of bankruptcy. Companies that remain strong are nervous about a future that seems almost impossible to forecast. In this environment, marketers need to move quickly and focus relentlessly on driving results. This is not the time for interesting programs and nice-to-do events. This is the time for tight, well-considered actions that will have an immediate impact on the business. Marketers who don’t drive short-term results are not likely to survive the coming waves of layoffs.
The traditional marketing plan doesn’t work
The classic marketing plan is built around two elements: the situation analysis and the detailed tactical plan. The situation analysis is an in-depth review of the business. It includes information on customers and competitors, a review of key trends in the industry, an analysis of recent business results and an assessment of technological changes. It can go on and on. The detailed plan provides all the specifics; it includes all the recommended actions and lays out the specific elements of each piece. This part of the plan frequently is organized by function; there will be an advertising section and a promotions section and a pricing section.
The class marketing plan ends up being a rather lengthy, solid and impressive document. Many are over two hundred pages long. I recently reviewed a marketing plan for one product, for one year, in one country. It was 259 pages long, single spaced.
The problem is that the traditional marketing plan is completely unsuited to the challenges marketers face today. It is simply too long, too data heavy and too detailed. Reviewing all that is known about a business is a hopeless task in today’s environment; there is an infinite amount of data.
A long, complex marketing plan creates a number of problems. The fist one is quite simple: many people won’t read the plan. Few individuals have time to read a one- hundred-page document. A second and more profound problem is that the marketing plan usually lacks focus; there are so many tactics and details that the big ideas get lost. The most serious issue is that the plan is difficult to change; it is anything but concise and nimble. It is impossible to quickly update a 200 page marketing plan to respond to changing conditions. People will often ignore a long and complex plan when things get busy; they will simply focus on executing, frequently without any real coordination or larger view. This is not optimal.
A new model
After having interviewed dozens of marketing executives from around the world, I have learned that the basics of creating a great marketing plan are simple and consistent across industries.
Regardless of the industry, a good marketing plan has to be clear and convincing. Ultimately, anyone creating a marketing plan needs to sell it. Indeed, one of the reasons for creating a marketing plan is to get support for the recommendations. For this to happen, the plan has to be clear; the audience has to know what is being presented. The plan also has to be convincing and explain why the recommendations will actually work.
A marketing plan should be built around three things: goals and objectives, strategic initiatives, and tactics (GOST). Marketing executives can use this simple framework to transform their marketing plans.
Goals and objectives
A good marketing plan should always begin with the goals and objectives (I use the terms of interchangeably). The sole reason to invest in marketing is to make something happen. Marketing isn’t art, and it isn’t philosophy. It has no value on its own. Marketing is a process and a marketing plan is a tool. Understanding your customers, for example, is a very good thing. Indeed, one of the core marketing concepts is customer focus; you have to understand your customers. However, understanding your customers has absolutely no value if you don’t do something with the insights into customers’ behavior. Knowing that 52 percent of your customers are concerned about the environment is an interesting though useless piece of data, unless you can do something with it.
The best objectives in a marketing plan relate to profit and cash flow for a very simple reason: profit and cash flow matter most. Managers are charged with building the value of a business, and the value of a business is, financially speaking, the present value of future income streams and cash flows. As a result, managers focus on profit and cash. Profit and cash also tend to drive bonuses, promotions and overall morale. The numbers matter most. As one marketing executive put it, “Good numbers don’t guarantee your success, but bad numbers will get you every time.”
This is true for every organization, because every organization ultimately has to deal with the numbers. This is true for a for-profit company and it is also true for a not-for-profit organization. The numbers have to work.
A marketing plan might have a non-financial goal in addition to a financial goal. Financial results are important but they are not the only thing that matters. Indeed, it is frequently possible to hit short term profit targets while damaging the brand or the business. A deep price reduction, for example, might spark a jump in sales but cause long-term problems.
Importantly, a marketing plan cannot have too many goals; this dilutes focus and leads to confusion. Best case, a marketing plan will be built around one or two goals. This makes setting the correct goals quite important; the goals drive the rest of the plan.
The heart of a marketing plan is the strategic initiatives. These are the most important moves. Identifying the strategic initiatives answers the question: What are we going to do in order to deliver the objectives?
Strategic initiatives are actions. They are what the organization will actually do in order to drive the business. “Building brand awareness” is a fine strategic initiative, as is “Introduce a new super-premium brand.” Conversely, “quality” is not a good initiative. Quality is an important thing, but quality doesn’t actually say anything. What about quality? Is quality going up or down? What are you doing? Similarly, innovation is not a helpful initiative. Like quality, innovation is a good thing in general, but innovation is vague. What sort of innovation are you talking about?
A marketing plan cannot have too many initiatives; the best number of initiatives is three or four. Identifying a small number of initiatives leads to focus. It also makes the market plan memorable. Eli Lilly conducted a fascinating study recently that highlighted the importance of focus. In the study, Lilly researchers evaluated consumer recall from three different pieces of advertising. The first spot mentioned four different potential side effects. The second spot mentioned eight potential side effects. The third spot included twelve side effects. The study showed that as the number of side effects in the ad increased, the overall recall declined. More importantly, perhaps, the number of people who failed to recall any of the side effects at all increased dramatically. When the commercial included twelve side effects, most consumers didn’t remember any of them. Focus is critical. As General Electric CEO Jeff Immelt observed, “Every leader needs to clearly explain the top three things the organization is working on. If you can’t, then you’re not leading well.”
Determining the strategic initiatives is the heart of creating a marketing plan. This is where value is really created. This is also where the debate should occur. Are we doing the right things?
Selecting the initiatives is a huge challenge. A manager has to decide what to focus on and, perhaps more importantly, what not to focus on. The latter is often more difficult. In many settings it is far easier to say yes than to say no. But saying no is what drives focus. As Apple’s Steve Jobs observed, “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the 100 other good ideas that there are. You have to pick carefully. I’m actually as proud of many of the things we haven’t done as the things we have done.”
The tactics section of a marketing plan provides the details. This section lays out in detail will happen against each of the initiatives. This might include advertising campaigns, new product launches and product improvements.
The tactics section is where the 4 Ps of marketing usually make an appearance (price, product, promotion and place). This is the section where things become specific; the tactics section should explain how each initiative will move forward. If the initiative is building buying rate with core customers, for example, the tactics section will lay out the specific programs that will build the buying rate.
Marketing plan summary
A marketing plan can be summarized in one page, showing the goals and objectives, strategic initiatives and tactics.
Putting a marketing plan on one page is a valuable exercise because it shows how all the elements fit together. Putting the plan on one page can also expose weaknesses in the plan. If there are no tactics associated with a particular initiative, for example, there is clearly a problem; the initiative is not going to happen. Either the initiative needs some tactics, or it isn’t really an important initiative. If there are many tactical programs that don’t align with an initiative, then the plan could be more focused.
Keys to Success
There are three keys to success when it comes to creating a strong marketing plan.
Create a cross-functional team
It is impossible to create a great marketing plan without the involvement of a cross-functional team. Marketing executives cannot create strong marketing plans on their own.
This is true for two very important reasons. First, a cross-functional team can identify and address potential issues. Execution is always a critical factor. Indeed, a marketing plan with the best ideas in the world is of absolutely no use if it can’t be executed. Many issues only surface, however, when the cross-functional team is involved. If you don’t involve the packaging group, for example, the fact that it will take three months to print new graphics may not surface. If the sales team isn’t consulted, you may not know that key customers are asking for a 3 percent rebate.
Second, involving the cross-functional team will improve the odds that the plan will ultimately be supported by the organization. Getting buy-in is a critical step in the process; nothing will happen if people don’t believe in the plan. There is no better way to get buy in than to involve people in creating the plan. It is very hard to criticize a plan that you helped create.
Check the foundation first
A building is only as strong as the foundation it is built on. Similarly, a marketing plan is only as strong as its foundation. As a result, it is important to check the foundation before creating a marketing plan.
A business should have two foundational elements: mission and positioning. Mission speaks to the purpose of the organization and the long term objectives. A mission statement answers questions such as, “Why are we in business? What are we trying to achieve in the long run? What are our values?” Having a mission is important because it sets the long term destination.
Positioning defines what a particular brand means in the market. The positioning statement lays out the key target, the frame of reference, the primary benefit and the key attribute. Each brand should have one positioning statement. An organization with many brands will have many positioning statements.
Mission and positioning should not change significantly from year to year; these elements provide continuity for the business. Conversely, a marketing plan will change every year and perhaps much more frequently. The mission and the positioning help ensure that the business remains on track even as the plan changes. A marketing plan should always be moving the organization in the right direction.
If a business does not have a mission and positioning, it is worth taking the time to lay these out before creating a marketing plan. If a business has a mission and positioning, it is a good practice to review them before beginning the plan creation to be sure they still work well.
Analysis, analysis, analysis
Analysis is essential. It is impossible to create a strong plan without a deep understanding of the customer, the competition and the market. Information, data and insights are all critical. You have to know the business exceptionally well before you can create a powerful plan.
The size of the final marketing plan should reflect the depth and extent of the analysis. Indeed, it requires more analysis to create a tight, focused plan than to create a long, unfocused one. The only way to create a short plan is to make choices, and the only way to make wise choices is to analyze the tradeoffs and the options.
Importantly, all the analysis should not end up in the marketing plan. The marketing plan should include just the most important and significant analyses and findings, presented in a simple and easy to follow manner. As Jim Kilts, a former CEO of Kraft, Gillette and Nabisco wrote in his book, Doing What Matters, “I want rigorous analysis and thoughtful assessments, but I don’t want complexity. If strategies and plans aren’t easily understood by everyone, they will be acted on by no one.”
Many managers and organizations find the traditional huge, detailed and dense marketing plan rather comforting; it feels safe and secure. It looks impressive. If nothing else, it says the team did a lot of work.
Creating tight, focused marketing plans, by contrast, seems scary. The ideas are apparent, the rationale is either compelling or not. The plan holds water or it doesn’t.
Of course, this is the power of a great marketing plan; it clearly presents the core ideas, creates consensus and drives execution. In today’s fast moving world, managers can’t hide behind fancy charts and complicated analyses; they have to make smart choices and execute. A tight marketing plan, grounded in goals, strategic initiatives and tactics, can help make this happen.