Market and Segmentation Strategy

Target Market:

• Demographics
  • Businesses with $2.5 – $10million annual revenue
  • Company has a full-time employee who is head of marketing (such as a CMO, Marketing Director or VP of Marketing)
  • Start local (New Mexico) and expand geographic reach
• Psychographics
  • Want to project quality and trust through their website
  • Need to prove ROI for marketing activities
  • Want to outshine their competitors

We will focus on clients who have the marketing budgets that could include a monthly retainer for Zenbox. We are strategically priced to offer our clients content marketing and website management services for a price that is lower than what it would cost to hire a full-time Content Marketer.

For the marketing departments in our target:

Source: Gartner: Gartner Says CMOs Remain Optimistic About Budgets Post-COVID19, Despite Bleak Outlook from C-Suite Colleagues, 2020

Problem Definition

Research from Gartner shows 44% of marketing departments are facing budget cuts related to COVID-19. While these cuts are mostly seen as temporary, Gartner predicts that the ROI of specific marketing activities will be evaluated when making cuts and deciding funding post-COVID.

CMOs need to build a plan that sets out the costs that can be eliminated, the essential costs that must be shielded and the costs where greater efficiency and ROI can be delivered. – Ewan McIntyre, vice president analyst for Gartner for Marketers, 2020

Since the majority of website improvements fall into the category of content marketing, like blog posts and graphic creation, we looked at how many businesses have full-time content marketers. According to the Content Marketing Institute Report, 44% of small businesses don’t have a full-time, dedicated content marketer. The same study reports that only 39% or marketers say they are successful at tracking ROI.

 

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Revenue Target Market

The U.S. Small Business Administration recommends that businesses with less than $5 million a year in sales spend 7-8% percent of their gross revenue for marketing and advertising. This is why we have chosen companies with at least $2.5 million in revenue. For those companies, assuming that they allocate 8% of their revenue toward marketing, we are asking for 25% of their marketing budget to pay Zenbox the average price of $4,000/mo.

 

 

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Target Persona

To inform our target persona, we found Marketing Directors on LikedIn who matched our target and combined elements from their profiles.

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Pilot Market

Zenbox is a national agency, and we are starting our outreach to new clients in New Mexico (where we are located) because:

• Many New Mexico businesses prefer to work with local companies (from client feedback)
• Zenbox has some brand awareness in New Mexico
• Local competitor analysis shows that Zenbox is already well-positioned against other New Mexican digital marketing agencies.

Let’s examine businesses headquartered in New Mexico by revenue, from data obtained from the New Mexico Small Business Development Center. We’ve examined all available revenue data for businesses making more than $2.5 million in annually. 107 businesses in New Mexico fall within this category.

When segmenting local businesses by industry, we see high fragmentation among the different industries. This supports our decision to not target any one specific industry with our services.

In fact, it will be better for Zenbox to only take one client per industry within each region. This is supported by our interviews:

“You don’t want to use the same web agency as your competitors because the site might look the same as your competitors.”

-CEO from our interviews

Part of Zenbox’s service offering is to give our clients a better competitive edge over their top competition, which is the very reason businesses invest in websites.

“The marketing agency we use for PPC does competitor monitoring of about 3 big competitors.”

-Digital Marketing Director from our interviews

 

Competitive Opportunities & Threats

Opportunities:

• Customer portal with SEO, analytical, and collaboration opportunities 
• Use social media to establish Zenbox as a thought leader or and share educational content 
• Many local competitor domain authorities are low or reasonable to compete with
• Opportunity to outshine local competition with more 5-star Google Reviews
• Opportunity to position Zenbox as a local Website Expert  / Thought leader without the large agency feel / pain-points

Threats:

• Many agencies have a broader range of digital marketing service offerings 
• Most local competitors have more extensive portfolios than Zenbox

Sources:

Shije, Ava and Ross, Dan, “Exploring the Business/Marketing Agency Relationship” September 26, 2020: https://docs.google.com/document/d/1Yq8iI38F8YGecHIVxWnLEzmzH9nBlnGZMmOJ2avgKMM/edit?usp=sharing

McIntyer, Ewan and Virzi, Anna Maria, “The Annual CMO Spend Survey Research: CMOs Gable on Swift Recovery, but Strategic Priorities Reveal Hedging” Gartner, June 30, 2020: https://www.gartner.com/account/signin?method=initialize&TARGET=http%253A%252F%252Fwww.gartner.com%252Fdocument%252F3987004

“Covid-19 and the State of Marketing” The CMO Survey, June 2020: https://cmosurvey.org/wp-content/uploads/2020/06/The_CMO_Survey-Highlights-and_Insights_Report-June-2020.pdf

Handley, Ann, et al. “B2B Content Marketing 2020: Benchmarks, Budgets, and Trends–North America”, Content Marketing Institute and MarketingProfs, accessed Sept 20, 2020: https://contentmarketinginstitute.com/wp-content/uploads/2019/10/2020_B2B_Research_Final.pdf

Beesley, Caron, “How to Set a Marketing Budget that Fits your Business Goals and Provides a High Return on Investment” U.S. Small Business Administration, January 9, 2013:  https://www.sba.gov/taxonomy/term/15051?page=37#:~:text=As%20a%20general%20rule%2C%20small,of%20their%20revenues%20to%20marketing.

Tableau documents can be found here: https://drive.google.com/drive/u/1/folders/1SG4Wb92ukDmkxrssPltAQJvqSWDGdgm0

Insights from Clutch Reviews of Web Design Agencies: https://docs.google.com/document/d/1yvHUra39hiquiPOj_zAwTxSrTFCZ9098s48hrGfIgD4/edit?usp=sharing