Developing a newsletter, is a valuable way to generate site referrals and deepen customer relationships. Before launching your newsletter, we’ve developed a list of questions to help you begin thinking about how you will create your newsletter:

1. Why are you developing a newsletter? Is it to generate referrals or deepen relationships with current customers and monetize them? It could be a combination.

2. Who is your audience? Use classic segmentation techniques and audience analysis to determine what motivates them. There are free online tools, such as Quantcast, that can help you learn more about your audience.

3. How will your subscriber benefit? Before users subscribe to a newsletter, they need to know what they stand to gain. Are you going to include coupons, tips, informative videos? You need to incentivize your audience before they turn over their e-mail address.

4. How are you going to deliver on your benefits? If your subscribers are digitally savvy shoppers, consider a blend of buying tips and maybe coupons. Or, if you’re a marketing blog, consider summarizing your favorite posts and adding some additional commentary unique to the newsletter.

5. Are there other newsletters you can learn from? Go to your competitor’s websites and see if they publish a newsletter. Before you get too far developing your newsletter, it’s helpful to see what similar companies are doing. While you want to be unique, figure out what is your competition doing right and determine how can you build off of it.

6. How are you going to make it visually interesting? Bogging down your newsletters with large images is not the answer. Create a balance between text and images (typically no more than 400 words per newsletter with 4-5 medium-sized images).

7. What is your newsletter content? Pull from a variety of sources to develop your content. Review all of the recent news and other information from the past several weeks to begin thinking about what you might want to include in your newsletter. Likely, you’re already developing content targeted towards your audience. A newsletter is a great way to tie everything together. Consider showcasing members of your community, such as customers or team members, in your newsletter to add a human touch.

8. How are you going to create your newsletter? There are many newsletter services, such as Constant Contact, that offer templates to build from. While you can outsource a designer to develop a customized template, it will be less expensive to make minor adjustments to existing templates on newsletter service sites. Once you’ve built your newsletter, you can upload your contacts, create your content and start e-mailing away.

9. When are you going to send out your newsletter? Developing a schedule is important to stay on track and be consistent. Typically, newsletters are either bi-weekly or monthly. About.com recommends if your newsletter is focused on a profession (therefore read at work), send it on a Wednesday or Thursday. Or, if your newsletter is typically read at home, send it on a Sunday.

10. How are you going to improve? Are you measuring up to the goals you set in the beginning? If your goal was to drive traffic to your website, go into Google Analytics and look at your traffic sources. If you publish your newsletter through a service (e.g. Constant Contact), they often have analytics tools for you to see how many people downloaded your coupon, or watched your video. Key metrics are bounce (ie your e-mail could not be delivered), spam and open rates. These can be helpful metrics to determine where you can focus your efforts in the future.

Learn more about our newsletter business partner, Constant Contact. You can set up an account directly or contact the Sparxoo team for help in setting up and managing your newsletter.

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By Ethan Lyon, Senior Writer

How are you going to get from (a) where you are now to (b) your goals? A marketing plan is the vehicle that gets from here to there. It is an outline of how your efforts are working together to reach business goals. Ultimately, you are finding the most effective strategies to sell your product or service to the most receptive audiences. There are several key stages in developing a marketing plan that help you organize and prioritize your communication efforts:

Outlining goals and identifying optimal market position
Initially, you should determine where you want to go–what are your goals? What is sensible yet aspirational? It’s very important to be grounded in what is possible because your goals will determine how and where you place your efforts. If you’re aspirations are unrealistic, it will be very challenging to meet them.

Once you’ve identified your goals, what is your position amongst your peer group? Are they more technical and you’re striving for creativity? It’s always helpful to visualize your positioning through simple quadrant maps. Let’s look at Apple. Apple’s quadrant map would potentially include a mindset (analytic and creative) and interactivity axises to define their iPhone. The purpose of such an exercise is to determine where they are within their peer group.

Segmenting and Aligning your Efforts with your Goals
You’ve placed you’re (a) and (b) on the map and now you have to draw a line between them. How are you going to get from where you are now to where you’d like to be? What vehicle is going to get you to your destination?

Before you start focusing your marketing efforts, consider your audience. Segment your audience into distinct groups based on their demographics and psychographics. Understand their need states and where they hang out. Where are you going to find your single women 16-35 with higher education looking for a need to escape? If you’re targeting businesses, what trade publications can offer you insight into their particular needs or what conferences might they attend? Next you should consider what type of marketing is going help you reach your goals:

Types of Marketing

External Marketing
Once you’ve identified your audience and where you can reach them, define what marketing efforts are going to speak to your customer and ultimately help you reach your goal. Based on your audience need states and where you can reach them, how are you going to communicate your message? Are they online in social networks or would you find them at trade shows? Are you going to target influencers to create some buzz or are you going to hire an outside public relations agency?

Take example from Apple. When they launched the iPod, their famous silhouetted advertisements were plastered all over large urban environments. You could hardly go down a street in NYC without seeing the iconic image. Depending where you can reach your audiences, you will have to fine tune where you communicate your message. Then you can refine you message based on their need states.

It’s important to understand your capabilities and budgetary restrictions. If you want to spend X on digital advertising and Y on PR and Z on TV and radio, do you have the financial ability to do so? Be realistic. If your marketing efforts are beyond your reach, you’ve just sabotaged your marketing plan. Ensuring you’re able to afford or leverage your in-house talent is essential in your planning stage.

Marketing from the Inside Out
Your marketing efforts do not always need to be external. When you market your company, you’re also marketing your team. Therefore, rallying your team around a single goal is essential for you to effectively market your company. Zappos is a great example of one internal philosophy that marketed the company with little traditional advertising. Zappos focused on customer service. They aligned their team with the goal of creating the most outstanding customer service out there and because of their dedication and follow-through, they have seen significant success with little traditional advertising.

Zappos has also taken their internal philosophy to social media. They’re known for their unconventional tweets. Fun, witty and intelligent, they’ve successfully carried over their brand personality to Twitter. Twitter allows Zappos to humanize the team of sales people and elevate the brand in the digital space.

Measuring your Success
Typically, the marketing plan addresses those goals one or more years out. Anything less than 12 months is not forward looking enough to make real impact. Measuring your success is about how you know you’re meeting your goals. Sometimes it’s helpful to have smaller milestones that build up to your more macro goals. By setting smaller goal markers, you’ll be able to refine and change your efforts based on performance. If you only focus on the big picture, you’ll find that at the two year mark, your not reaching your goals because some of your efforts were not working as planned. That’s why it’s always helpful to take small steps to know you’re headed in the right direction.

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By Ethan Lyon, Senior Writer

As social networking becomes more pervasive in our everyday lives, influencers will play a more critical role in our decision making process. Through a network of influencers, businesses can reach consumers or industry leaders in a meaningful and valuable way.

Influencers come in all different shapes and sizes.  There are cultural influencers, political influencers, and even those kids who often exert decision-making powers in their household. Each individual or group of influencer(s) requires a smart, tailored communications approach. Identifying how you’re going to reach influencers is key in building long-lasting relationships. Are you going to be speaking 1) with, 2) through or 3) to them? These three communication approaches will shape your bond with influencers and inform your strategy.

To begin thinking about influencers, consider:

• Their passion point(s)—Do they focus all of their time on your entrepreneurial passion, or do they have several areas of expertise?
• The degrees of separation from the decision maker(s)—Different people and organizations exert different types of influence.
• How can they benefit your initiative—Think of ways to motivate your target influencers to get behind your product.

To illustrate these points, let’s take example from Colin Powell and Kliener Perkins. The former secretary of state has deep connections in high-level political and business circles. Powell is limited in the number of things he can be passionate about, whereas the legendary venture capital firm has a team of high-level influencers across many industries. Both influencers have deep but different passion points and connections. One is a network of high-level influencers, where the other has deep personal connections. Fortunately, if you were to approach Kliener Perkins in search of influence, Colin Powell could help (as he sits on their board).

As you think about approaching influencers like Kliener Perkins or Colin Powell, don’t just consider how they can benefit you, instead think about how you can help them. Are you on the cutting edge? Are you a future leader? What can you bring to their table?

Consumer Influencers

Who Are They?—Segmenting influencers into high-level and specific groups is a starting point as you develop your strategy. Are your influencers young, tech-savvy professionals, bloggers, trendsetters, celebrities? Depending on your product / service, identify the key players online and off.

Where Can You Find Them?—Online influencers are typically easier to find. Search and analytic tools enable you to measure influence and prioritize your efforts. Consider inbound links (input link:[URL] into a search field) Google pagerank (a 0-10 scale), RSS subscribers (via Feedburner), Twitter influence via Twitter Grader or blog rating databases (Technorati, Blog Catalog, socialmention, MyBlogLog).

Or you might want to identify offline influencers. Do your target influencers carry more sway in a locality or are they hyper-connected throughout the world? If your target influencer carries weight and takes pride in a given area, speak to their space. What publications are they affiliated with? Are they a NY Times columnist or are they a local film critic?

Business Influencers

Who Are They?—There are two distinct groups of business influencers: 1) Masters, or industry figureheads and 2) Commanders, or the behind-the-scenes players that make things happen:

• Masters—They’ve been called the captains of industry; masters of the universe; the movers, shakers and policy makers. Masters need no introduction. They are the Steve Jobs, Colin Powells, TIME 100s of the world. They are the figureheads that make sweeping decisions with long-lasting impact. When targeting Masters, evaluate the time spent reaching them versus their attention on your business. Though many businesses could benefit from Bill Clinton’s endorsement, it is difficult to obtain. Even with an endorsement from a Master, it’s likely 0.00142% of their attention. Consider accessibility versus time spent before reaching out to a Master.
• Commanders—Though Masters are industry figure-heads, they do not necessarily run the show. Think lobbyists, consultants, analysts, journalists, campaign staff. They make things happen. Or, even closer to the decision-making process, consider hubs of influencers such as venture capitalists or the Harvard alumni network. Commanders can be groups or organizations of established influencers or independent professionals with a far-reaching network, or both. When approaching a commander, judge their prominence within the organization and the value of their personal and professional network.

Where Can You Find Them?—Attend TED, and you will find the conference teeming with influencers. The best of the best are invited to share their unique and insightful perspectives—TED selects only Masters. But to find to Commanders, you have to identify the Master’s support system. Who are they close to or care about? Are they lobbyists, or back-end consulting agencies? Who sets the stage? Identify the people in your network closest to your target influencer and build your relationships from there.

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by David Capece, Managing Partner

We live in a world of overcapacity, where consumers are empowered to choose.  With a market-driven approach you can stay focused on delivering outstanding value to your consumers to weather the downturn and be in great position for the upturn.  It all begins with an on-target value proposition.

While a value proposition may sound complex and intimidating, the framework is quite straightforward.  We focus on 3 questions: Who?  What?  Why?  Put another way, the value propostion is a series of 3 statements: Convince (Who?), That (What?), Because (Why?).

The framework is simple (explained in more detail below), but getting it right, and making it stand out from the competition, is the hard part.  Market-driven organizations should be constantly garnering feedback from customers and prospects through interviews, focus groups, quantitative research, competitor visits, shop-alongs, and web analytics.  The more feedback you have, the more you understand your customers, and the stronger your value proposition can be.

For illustrative purposes, our team has imputed the value proposition of Apple and Under Armour in the following series of statements:

Apple
Convince (Who?): For talented creatives who aspire to share their story
That (What?): Apples offers creative expression through human technology that is easy-to-use
Because (Why?): Apple consistently innovates with breakthrough, well-designed products…iPod, iTunes, iPhone, iMac.

Under Armour
Convince (Who?): For athletes who seek great performance
That (What?): Under Armour’s mission is to make all athletes better through passion, science, and the relentless pursuit of innovation
Because (Why?): Under Armour’s technology is complex, but the value is simple: wear HeatGear when it’s hot, ColdGear when it’s cold, and AllSeasonGear between the extremes.

Below, we have outlined the questions you should be thinking about to help you develop a value proposition.  This exercise should facilitate good discussion among your team, and can be repeated and refined over time to incorporate more market feedback.

Who? Your statement should read something like this:  “For (target customer), Who (statement of need or opportunity).”  Use the below questions and tips to guide you and read through our advice on customer segmentation.

• Develop a comprehensive list of your audiences and prioritize the top 2 to 4 audiences that you need to deliver against in order to succeed.
• What is your customer’s “statement of need” or opportunity (what do they want)?

Entrepreneur Steve Barsh has some great tips on his blog which I will repeat here:

• Think about dividing your customers into customer segments, and/or breaking them down by psychographic or demographic.
• Think about what they want (“Wants” are much stronger than “needs”)
• Look at it from the customer’s view, NOT yours. You need to stand in your customers’ shoes. Ultimately, interview and poll customers to verify what you think they want.
• Try to be as simple and direct as possible.

What and Why? The structure of your ”What” statement:   “The (product / service name) is a (product / service category) that (statement of key benefit – that is, extremely compelling reason to buy or use)” The structure of your “Why” statement: “Unlike (primary competitive alternatives, including “doing nothing”), our product / service (statement of primary differentiation).”  Use the below questions and tips to guide you.

• What are current and future market trends (innovation, keys to success)?
• Who are competitors and why would they be selected?
• What are the key benefits — the extremely compelling reasons to buy or use your company’s product / service?

Again, I have incorporated  some tips from Steve Barsh:

• Never say “I have no competition.” It’s just not true. Really think hard about all of the different types of competitors you have.
• One of the biggest competitors people forget about is the incredible inertia for your target customer to DO NOTHING! How are you going to overcome their inertia to do nothing?
• Put your product benefits in a priority order with your best at the top.
• Make sure that your benefits are aligned with what’s relevant to the target customer.

Once you have an on-target value proposition, align your team and organization to deliver on your promise.  Beyond revising your marketing messages, you should think about the implications for product strategy and customer experience.  If you have done it well, your value proposition will help clarify your organization’s objectives and enable your team to rally against a clear vision.

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Photo by Willi Heidelbach, from Stock.Xchng

By Alison Streeter, Emerging Leader

Understanding consumer behavior provides insight to help companies better sell products and services.  Market researchers often use consumer segmentation as a tool to analyze various groups of consumers.  A segment is defined as “a group of present or potential customers with some common characteristics which is relevant in explaining (and predicting) their response to a supplier’s marketing stimuli” (Hutt & Speh).  Once a firm has effectively “segmented” the market, it must choose to “target” one or more closely related segments in which it can focus its marketing efforts on.  Firms usually prioritize segments based on a combination of factors including sales, loyalty, profitability, as well as other strategic considerations.

There have been many studies conducted to analyze the benefits of consumer segmentation.  Research has shown that companies that implement formal, research-based segmentation strategies receive higher revenues and market share than competitors.  By identifying the similarities of the demographics through consumer segmentation studies, it is possible to develop a more effective marketing strategy that better serves consumer needs.  Effective segments must be measurable, substantial, accessible, differential, and actionable.  Companies must realize the demographics, the motivations for purchasing, and the buying behavior of their target segment(s).  Developing consumer profiles can be done via surveys and other tracking at data rich web sites.  At the extreme end, companies such as Amazon and NetFlix are able to use predictive intelligence across their network to improve the shopping experience.

While consumer segmentation is a pervasive marketing strategy, it is important to be aware of its shortcomings. To explore how you can avoid these pitfalls, we will discuss common challenges many companies face through segmenting their audience:

Ignoring Potential Audiences

When leaving out certain segments, a company may not be able to maximize potential.  Additionally, a brand may gain a permanent association with a certain group, especially when utilizing social class, race, or lifestyle, which may deter others from using the product. For example, the beer “Colt 45″, targets African-Americans, but there are many people out there who are not African Americans who may enjoy the beer as well. Therefore, the racially segregated marketing and ads for such products may make others feel like they are not meant to use the product or feel under-appreciated for their support and use of the product.  Another example is Pepsi; it targets youthful, active, and edgy consumers heavily. It is likely that many more traditional, older and laid-back soda drinkers may feel like they don’t fit into this “Pepsi stereotype” so proceed to buy Coke instead. This ultimately leads to an alienation of potentially reliable consumers.

Forgetting About Individuality

Quantitative surveys produce numerous statistically significant segments, but creating the segment (or segments) for which the company should target is not a simple task.  Just as every individual is unique in some way, shape or form, it is hard to classify people into buying-behavior segments.  Marketing concentrated on a “segment” may only cater to a portion of the individuals within the segment, leaving the others out.  There are so many factors that must be considered when segmenting, such as demographics, education level, income level, psychographics (refers to targeting consumer segments according to social class, lifestyle and personality), past purchasing behavior, that it is nearly impossible to group people into one segment.

Sending the Wrong Message

Another problem that can arise during the process of segmentation is cannibalization, in which one segment overtakes another so nothing is gained and in the worst case, sales or market share is lost.  Moreover, there is a risk of sending the wrong message or an occurrence of brand “dilution” to too many segments, or different messages to different segments of the market.

Additionally, while consumer segmentation is one of the major studies of market research throughout top-performing companies, it proves very difficult to get it right –at least the first time.  Despite these shortcomings, segmentation is still a valid tool to help understand your audience.  As you develop your segmentation plans, consider some of these challenges, and avoid the traps.  And remember, that it is always helpful to learn more about your audience…just be sure to ask questions that provide actionable insight in helping you to develop your overall strategy.

While there are many ways to harness the power of segmentation, one of the broadest and most valuable applications is for designing your marketing strategy – a strategy that clearly defines who you’re targeting, what you’re going to offer them, where you’re going to reach them, and how you’re going to sell them on your product & brand.

The key “superpower” of segmentation is that it enables you to take a population of consumers and group them based upon similarities they share with respect to the very attributes that you use to define your marketing strategy (i.e., who to target, what to offer them, etc.).  What this means is that the segments you derive from the segmentation process will have their preferred marketing mixes already “baked into them”.  Powerful stuff.

Segmentation for designing marketing strategies is a 2-step jig

Step 1: Identify “the who”
In the first step you identify “the who”.  Who are those consumers in the population who have expressed interest in your product category or who have needs addressed by your product category?  In this step you’re simply separating out those interested consumers from the rest of the general population.

Step 2: Identify your target segments
The second step is where things really get cooking. In step 2 you take the population of interested consumers and group them based upon their similarities with respect to “the what, why, where & how” of your product category.
In this step your goal is to identify the most attractive segments for your business to target – segments for which the following are true:
•    One or more of your products meet the segment’s functional & emotional needs
•    Your existing channels for selling, servicing & awareness-building align with the segment’s channel preferences and media-consumption habits
•    Your product & brand positioning align with the segment’s “reasons for buying” from both a functional and emotional perspective
•    You can identify the segment in a cost-effective manner
•    The segment is large enough in size and profit-potential to merit investment in a distinct marketing mix

By the end of step 2, you will have identified one or more segments that:
•    Are interested in one of more of your products
•    Are most effectively targeted using a distinct marketing mix
•    AND, are large enough to merit your investment in this distinct marketing mix
These segments will become your target segments and along with their distinct marketing mixes represent your marketing strategy.  To reiterate from the intro, the beauty of this approach is that by basing part of your segmentation on similarities shared by consumers across key components of your marketing mix, the segments you derive come with their “marketing instructions” already included.

What about segments you choose not to target?
So what about segments that don’t meet enough of your targeting criteria?  What should you do about them?  The answer is that it depends.
For those segments large enough in size & profit potential you may consider developing new products, building out new channels, or creating communication strategies that better meet their needs and more effectively “speak to them”.
On the other hand, for those segments that are very small or that would require major retooling of your operations, extensive employee training, or significant stretching of your brand, you would likely leave to other companies to pursue.

If you’d like to read more on segmentation & marketing strategy, I highly recommend:
•    Making Segmentation work (PDF)
•    Market Segmentation: How to do it, how to profit from it
•    Counterintuitive Marketing: Achieve Great Results Using Uncommon Sense (One of the best general marketing books with a terrific chapter on segmentation)

_____________________________________________________________________________________

Supporters:
Target your niche market by reaching out to corporate decision makers involved in the segment.

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By Jennifer Maine, Emerging Leader

Market segmentation is the process of dividing groups of consumers based on their purchasing behavior and reaction to promotions and communications from the company.  Each segment should differ in these behaviors but within the segment, members should be homogeneous.

Implementing segmentation has many benefits to a company.  After segmenting the market, a customer needs and wants can be identified more effectively, communication with these customers improves, opportunities for growth and innovation are created and profits and market share increase.

1. Better Satisfy Customer Needs and Wants
Through segmentation, a company can match customers’ needs and wants.  Since all customers have differing needs, they must be handled in different ways.  Segmentation enables identification of the different customer segments and their preferences.  Then, a solution can be customized for each segment using the company’s products or services.  As customers grow older, their preferences and buying behaviors change.  By identifying these changes, solutions can be provided to customers throughout their ‘life cycle’ by adopting the product or service to the segment’s needs.  This is a great way to retain customers as they change their behaviors over time.

IBM recently changed their segmentation scheme in order to identify key groups to target with their ThinkPad laptops.  The new scheme brought their number of segments down to 8 from 96.  This allowed IBM to identify the most likely users of ThinkPad and to drop some segments from their current advertising and to stop trying to attract others who are unlikely to purchase a ThinkPad.  For example, the “Price Shopper” segment was ignored because IBM was known for its premium product.  IBM would be wasting resources trying to get these “Price Shoppers” to purchase (John Lynch, The Fuqua School of Business at Duke University).

2. Better Communication
A marketing message needs to be targeted to specific customer segments for it to be effective.  Since customers have different needs and wants, solutions to each segment need to be communicated separately.  Mass marketing causes some target customers to miss the intended message.  Also, too much money is spent on advertising to customers who will never purchase the product.  Through segmentation, customers can be reached with a specific marketing message that is designed to solve their individual problems, which is less costly for the company.

3. Opportunity for Growth
Segmentation enables identification of potential customers who wouldn’t normally buy a product. By segmenting the market, a company can create its own ‘niche’ and attract customers who normally would look to alternative sources for a solution to their problem.  If these unique problems are identified, companies can adjust their product offering to provide a solution.  Also, segmentation can increase sales as customers are introduced to new versions and upgrades of their current product.  If they try out a product with a lower price point and like the product, they can upgrade to a more premium version.

Although IBM chose to stop focusing on a few of the 8 segments, they could better serve the key segments that are more likely to purchase a ThinkPad.  Previously, IBM had been trying to make their product attractive to everyone, but by choosing to narrow their target and include features attractive to these segments, customers who previously purchased a competing product may now consider a ThinkPad.

4. Increased Innovation
With segmentation, smaller segments in the market that have similar needs and wants can be identified. Although these segments may not be traditional customers, identifying new needs can stimulate innovative ideas to solve new problems.  With newly developed products and services to meet these needs, problems, premium prices can be charged and the advantage in the market can be sustained.

After IBM identified the segments it wanted to target, they determined which features to incorporate into their product based on the preferences of the segments.  By limiting their focus to a few key segments, IBM added new features to the product.

5. Higher Profits/Market Share
Consumers have different price sensitivities so by segmenting the market, different prices can be charged to extract the most consumer surplus.  In doing this, profits are increased. Since segmentation supports niche strategies, highly attractive segments can be indentified and market leadership can be achieved.  A competitive position results from this position in the market.  Relationships are improved and the brand is strengthened.  Also, competitive production and decreased marketing costs are associated with segmentation.  Due to all of these factors, profitability increases.