Your Marketing Thermometer
By Brian Jud

Do you want to make your business more profitable in 2005 than it was in 2004? You may be able to make that happen by adopting a simple system for measuring and evaluating your sales results. Regular evaluation of your progress can show you if you are on track to reach your objective. At the same time, it points out areas in need of strategic or tactical adjustment. And finally, it gives you time to make any changes necessary so you can reach your objectives.

A thermometer measures temperature. It doesn’t control the temperature. It gives you an indication that the heating or cooling elements are working properly. If the room is too warm or too cold, you adjust the thermostat to remedy the situation. Marketing evaluation acts as your business thermometer, measuring your sales and/or profits and telling you if your marketing efforts are working properly. If your indicators are off target, you then you must find out why and make the changes that will bring you back on track.

How to measure your results
This system is simple to use. Begin by dividing your annual goals – in units and/or dollars – into quarterly objectives. Then at the end of each quarter evaluate your progress and ask yourself a few questions. Are your sales on target? If not, why not? How must I change my strategies next quarter in order to become more successful, and reach my revised target? There are two steps for doing this. The first is with a quantitative audit and the second is with a qualitative audit.

Step One: Conduct a Quantitative Audit
A quantitative audit is objective in nature, comparing numbers that were forecast with numbers that were actually achieved. This can easily be set up in a quarterly spreadsheet, as shown below for the First Quarter (1Q). If, after the first quarter, your sales are below what they should be, you must increase your second-quarter numbers accordingly to remain on target for reaching your annual goals. Do this for each quarter, for each title. Here is an example demonstrating how to track your sales on a quarterly basis (? = “Difference;” YTD = Year To Date).

Step Two: Conduct a Qualitative Audit
Your objective analysis should show you where you are short of reaching your goals. It may also point out that while unit sales are on track, revenue is below forecast and some invisible culprit may be denying your financial success. Use the questions below to kick-start your strategic thinking and identify and respond to the forces that seem to defy economic gravity.

Business/Personnel Factors
Do you have a written marketing plan?
Do you have enough of the right people employed to properly implement your plan?
Are your objectives stated specifically enough to measure performance? (A goal to “Increase Sales” does not lend itself to accurate measurement.)

Marketplace Factors
What is happening to the size, growth, geographical distribution of the markets in which you have chosen to compete?
Have the needs of your customers changed?
Have any new competitors entered the arena? If so, how are their products, distribution, pricing and promotion different from yours?

Planning Process
Is written your plan in a form that supports easy use?
Have you identified and defined your market segments carefully and completely?
Have you developed an effective marketing mix for each target segment?
Did you budget enough resources to accomplish your objectives?
Did you forecast sales accurately? (For more information, see Jud’s article How to Mine Your Own Business, in the April, 2003 issues of the PMA Newsletter, online at www.pma-online.org)

Product Development.
Is the current product line sufficient to meet your objectives?
Which products should be phased out? Added? Changed?

Distribution.
Are you acting as a partner with your distributors, communicating with them regularly?
Do you have adequate market coverage in your target niches?

Pricing.
Are your pricing objectives and strategies suitable to market and competitive conditions?
Do prospects make a connection between your pricing and the value your titles offer?
Are discounts and incentives sufficient to motivate your distribution partners?

Promotion.
Are you communicating the proper message to the right people by means of the correct medium (publicity, advertising, sales promotion and personal selling)?
Have you budgeted sufficient funds to promotion?

Interpret Results and Make Changes
Simply knowing what is wrong does not correct the situation. Given your degree of success in reaching your goal, you may need to make changes in your marketing efforts for the remainder of the planning period. Do not be too quick to make adjustments until you have adequate information, sufficiently analyzed.

For example, your sales in the first quarter may be well below the figure that represents one-fourth of your annual sales. But if the title under consideration is a gift item, the bulk of the sales may not occur until the fourth quarter. In this case, no strategic adjustments may be necessary now.

Look to your bread-and-butter titles. Where are deviations the most severe? Which customers or titles are straying from predicted sales? Why is that happening? What trends do you see developing? How must your forecast be changed for the remaining periods in order to reach your annual goal? This analysis will give you advance warning of potentially dangerous trends and give you the chance to respond accordingly.

When you feel that your strategy is taking you a little off course, do not think you have to make major changes in strategy. Unless you see a large problem, begin by fine-tuning your existing actions. For example, if your first-quarter unit sales are at forecast but your profits are below what was expected, then you may have a pricing problem. Perhaps your price incentives were a little too aggressive and need to be trimmed. Or, if you allocated all your production costs to the first printing, the second printing will be more profitable, bringing your profit forecast back on track.

Maybe you are not reaching your objectives because they were unrealistic. Was your plan ill conceived or was poor implementation the culprit? What are possible causes of your shortfall? Poor product design? Bad timing? Not enough time? No differentiation? Not enough promotion/budget? Try to pinpoint the cause, make changes in your strategy and/or implementation, and then try something different and measure the resulting sales to see if your changes worked.

It does not make good business sense to continue doing the same thing, but expecting different results. If what you are doing works, do more of it. But if what you are doing doesn’t work, try something else. The question is, how do you know if it is working or not? You know this by scrutinizing your progress, making changes as necessary and then implementing your new programs. Then next quarter you start the entire process again.
Brian Jud is the author of Beyond the Bookstore (a Publishers Weekly book) and The Marketing Planning CD. He also wrote the series of booklets, Proven Tips for Publishing Success. Contact Brian at P. O. Box 715, Avon, CT 06001; (800) 562-4357; brianjud@bookmarketing.com or visit http://www.bookmarketing.com

Last 5 posts by Brian Jud

• Focus on Non-traditional Marketing - April 17th, 2008
• Sail the Seven Cs to Media Performances - March 24th, 2008
• Goals are Worthless… - February 11th, 2008
• Why Bad Things Happen to Good Titles - December 5th, 2007
• Practice Makes Permanent - October 22nd, 2007