Guide to creating an evidence-based marketing strategy (in-depth post)


A couple of years ago, I (along with Andy Madeley of Swiss Peaks) asked local business in Staffordshire how much they would spend on various elements of the marketing mix if they had a £10,000 budget.  The result for market research was around £500 or 0.5% which is probably more realistic for most firms than the 1% of turnover that is often cited.

In fact if you had a budget of £5,000, I would recommend spending £500 on market research and in most cases that figure would not change if your budget was £20,000.

But what does £500 (+VAT) get you these days?

The simple answer is whatever information you need to create an evidence-based marketing strategy or business plan. You can do a lot of this yourself – a good researcher may be quicker in knowing where to find information, but once you have the framework you can do it yourself.

I do the process myself and I estimate it saves me £500 to £1,000 a year, which may not seem like a lot but when your budget is £2,000, it makes it go a lot further.

Before looking at the framework in more detail, you should know what information you have access to, this can be from a wide variety of sources including information from internal databases, access to trade association research, other employees who have dealings with customers and even suppliers.  There are also a wide variety of software tools that you may have access to Google Analytics, SEM Rush, Linkedin etc. if you pay a subscription you may be able to access additional data but even the free services can give you valuable information.

If there are any gaps in your information – note them down and give me a call or email me.  It may be that the information does exist or it may be that you may need to allocate resources to collecting such information.

Figure 1 Framework for evidence based marketing strategy


The process does start off slowly as you have to collect a wide variety of external information which is often quite time consuming as you are not aware of what is out there.  Once this information is collected the process becomes much more straightforward particularly to someone who is well versed in sales and marketing or has produced their own business plan.

It is worth reading through the document before starting as information sources such as competitor websites can be used for a number of stages

Stage 1: Understanding the market place

1.1 Product

 Figure 2 Understanding what the product is


Source: Rewired Group

Most businesses will have some idea of what their products compete with directly but you should know about the indirect competition as well.  How can customers fulfil this need in another way?  An example is shown below:

Figure 3 Understanding who the competitors are

Product Solution used by companies Examples
Fixed price employment law Package from legal firms or lawyers DWF
Insurers Axa, Aviva
Consultants Peninsula, Citation
Trade Associations Chamber of Commerce, FSB, BHA
HR specialists with insurance Various local practitioners
Accountants TaxAssist, various local companies
Software companies Sage, Croner
Internet, ad hoc use of local solicitors Various local suppliers
Use of subcontract labour only

Understanding who are the key customers or big players in your target market at this stage is also important this will give you an idea of who the product appeals to.  Some products/services are designed specifically for a type of customer to meet specific industry regulations or a customer profile (mid-life crisis men) as this helps to understand what the product is.  If you look at every product or service as a tool that is hired for a specific job then this will help you to understand the framework and what you need to focus on.

1.2 Industry

You do not have to be a data scientist to have a good idea of most markets – the Business Population Estimates (BPE) and Prodcom can give you some idea of the size of the market in the UK and, if you are an exporter how much is produced locally and then exported.  BPE and Prodcom figures are broken down by SIC code for each sector on a national level and by regions for BPE.

If you are looking to get a greater idea of the local area – Councils and Local Enterprise Partnerships can provide local data with Experian, Local Data Company and CACI amongst those who will provide specialist data at a price.  Trade associations will also provide some estimates so it is always worth checking these as well, interested parties may also provide some data which may be useful.

Triangulating or checking data is worthwhile to understand why you have different figures have been produced and what they tell you.  Understanding any sampling differences is useful larger companies may spend more on ICT than one man bands and if you have a figure for one that you feel is robust then you may well be able to calculate approximate figures for the others.

You can also pro rata data for a local area based on national figures – although be careful as there are often significant regional differences (e.g for market research and some other professions 90% of the market is London based) but the figures may be good enough for your purposes.

It is worth looking at the size of the market at this stage – is it growing or contracting and any evidence about why this may the case.  If you come across any predictions for the future size of the market this is worth noting down as it is relevant to the wider industry trends and the plans of current or potential competitors.

1.3 Competitors

No organisation is without competitors who will steal market share off them if they have a key advantage.  So it is important to understand as much as possible about your key competitors – how big they are, their size and competitive advantage and over time which companies have gained or lost market share.  It also may highlight how your own marketing strategy needs to develop.

Figure 4 Strategy based on competitive advantage


Looking forward this will give you an idea of who your major competitors are now and in the future. A key information source(s) for this are your current employees who may have worked at other organisations and the three circles tool is highly useful for this.  Companies House can give you access to some key information and there are a number of online tools such as SEM Rush that can be used to understand their digital presence.

Figure 5 3 Circles diagram (based on Urbany and Davis)


It is worth understanding if there are any markets that are dominated by one or two competitors or a different type of business model.

It may be a good idea to reduce the number of direct competitors you are looking at to 5 or so at this stage and look at these in more depth.  As well as the 3 circles tool it is worth collecting information and examples of their marketing literature and other information to understand how each product works according to the 4Ps – (Price, Product, Promotion and Place).

It is worth assessing indirect customers as well and the potential impact of any specific businesses (e.g. Amazon) in your market.  For instance Cofunds, the largest investment platform in the UK realised that their products were competing with luxury goods that provided instant gratification and therefore could plan their communications strategy more effectively.

1.4 Industry trends

From the work you have done so far you should have an idea of whether the market is growing, how it is growing and which of your competitors are best placed to take advantage of these changes.

White papers and industry groups are enormously helpful here but you should always look to check the assumptions behind some of this blue sky thinking as white papers are produced for a reason including trying to shape a market or to sell services to a specific client base.

However it is still worth undertaking a formal STEP/PEST analysis (in most cases a PESTLE analysis adds very little) so that you go through the processes of assessing your market from all angles (political/legislative, economic, social and technological).

Figure 6 PEST/STEP diagram


Political information can typically be found through industry trade associations or generic groups such as the Chamber of Commerce.  UKTI will also support you on the regulations in other countries and the groups such as the CIM/DMA will be able to give you information about changes which will impact on marketing such as Data Protection and Consumer Rights.

Economic information can be found relatively easily over the internet, the key thing is to focus on what you need – the treasury will provide long term forecasts and the Chamber of Commerce can provide local and national trend information based on the size of your business.

Social information is also relatively easy to find with local councils providing a number of key statistics on the local area.  Nomis from the office of National Statistics can provide other relevant information as can your Local Economic Partnership (LEP) and Sector Skills Partnership

Technology is more disparate but broadband figures are often a good place to start, trade magazines and shows will give you an idea of where the internet of things (IOT) and other issues such as big data are for your industry.

One area often overlooked is the skills of the workforce – this is more critical in some industries than others.  If individuals need to be qualified to do a particular job – this may be IFAs or tradesman on a building site then this may be a key determinant in the market as it can limit capacity.  This is why I have purposefully included this in the social section of the analysis, although it could be that it is relevant for technology as manufacturers look to de-skill the installation or operation of their products.

Stage 2: Understanding the customer base

2.1 Introduction

The following table is from Business over Broadway – it is a few years old but does look at a number of the data sources, from all sides of the business and is important for understanding where the information can come from and potential usage.

Figure 7 Data sources and how surveys can provide evidence


Once you understand the marketplace you can look at the customer base and most importantly from the customers own eyes.  If you have a budget of over £500 then I would strongly suggest using the Jobs to be Done methodology to understand the market from a fresh perspective.  Marketing is afterall a concept or promoting a new behaviour in a buyer – either to buy more often or to switch products.

Figure 8 Decision making process


2.1. Who is/are buying?

Understanding who is buying a product or service is crucial – you communicate with people, not companies. Often it is not as simple as the contact on your Customer database, although this is the first place to start.  Intelligent analysis is needed as the PA to the Managing Director is unlikely to have made the ultimate buying decision it is likely to the Managing Director.  Segmenting your database or their titles into Users, Influencers, Buyers and Decision-Makers is useful as it will then help you to create marketing tactics and collateral to appeal to each element.

It is worth looking at the market using the Jobs to be Done aspects – functional (the technical elements of quality including hygiene factors), social (emotional aspects that they want to show to third parties i.e. keeping up with the Joneses) and personal (individual preferences).

Figure 9 Aspects of the customers’ job to be done


2.2 Customer loyalty and satisfaction – what jobs they do with your service

On their own customer feedback, benchmarked data analysis of buying patterns, customer demographics and indicators such as social media engagement stats will give you only a limited idea of customer loyalty.  Taken altogether they give you a good understanding of how your customers operate and give you an idea of what they are looking for. Looking at where you are over providing for customers is as important as areas that are under-served.

Figure 10 How to assess aspects in terms of service to the market


Customer feedback is important and if it is undertaken in the context of benchmarking or a process such as Servqual or TQM this can provide useful context for the results.  If you have not anything in pace it is worth putting a monitoring system in place and needs to be as short as possible.  The Net Promoter Score does not work for all sectors but along with Customer Satisfaction Indicators can provide topline access to industry based benchmarking scores.  The trick is to incorporate this into your processes as much as possible – a call on submission of a final invoice works well for me.

Understanding the importance of these elements of the offer are also important which is why asking a question such as the Net Promoter Score without asking why is pointless – you are better not bothering.

Analysis of customer’s buying behaviour is worthwhile – what do they buy at the same time and as importantly what are similar companies not buying.  Upselling is one of the most efficient ways of selling and, if you have examples of how other people have found it beneficial to bundles products or services together it provides a powerful tool for your sales team.

Systems like Servqual can also provide employee and stakeholder context and can highlight issues in terms of user experience or infrastructure constraints that may affect the company’s ability to service customer needs in the future.

2.3 Segmentation

Segmentation is worth looking in its own right, but before doing too much you will need to assess the quality of the data – EPOS data is usually quite reliable but too many games or poor coding of information can mean that what you can do with internal information is quite limited without outside help.

Figure 11 History of segmentation


Source: Ulwick/Strategyn

Customer segmentation is traditionally done in the same way as market size and structuring – for instance for businesses this is based on SIC code, size of company, location as well as name and job title of the key contact(s) and for consumers by location, gender and perhaps SOC code.  You may even buy in additional information from the likes of Experian and add in additional information such as what lead to the individual or company getting in contact with you.

You may find that such information works well for you, but it is always worth considering whether your market segments are two detailed or not detailed enough as demographic information can be a blunt or inaccurate tool. For example you may find that actually the firm is less important than the classification of the individual when it comes to buying behaviour, for instance it may not matter if the buyer is a utilities company or a commercial contractor as the job that they will use your products for are in effect the same, but the difference may be in whether the user, the health and safety specialist or lead engineer is the key influencer of the decision.

If you have not done any research on the jobs that your customers need to be done – even if you think it is self evident, it is worth highlighting this as a concept and can support a lot of the information that is required in this marketing strategy.

Looking at buying behaviour – frequency, seasonality or bundling of products/services can also add insight and suggest marketing or communication strategies.  For instance if a lot of clients buy on a Friday, it may be worth timing a communication for the Wednesday or Thursday.

Stage 3 – Understand the 4Ps

3.1 Introduction

Up until this point we have predominantly externalised the issue – assessing the marketplace, the customer base and the jobs that they need to do. These provide a lens with which you can assess you own services and offering.

Figure 12 Traditional 4Ps matrix


This section is called the 4P (Products, Place Pricing and Promotion) but it can be worth adding in 3 other Ps (People, Physical evidence (tangible outcome) and Process). Particularly if you feel that there may be skills gaps internally or problems with the user experience.

Figure 12 Kotlers 7Ps matrix


I have kept the post focussed on this traditional view of the target market because most people are more comfortable with it, although I tend to agree with Lauterborn’s 4Cs (Customer wants, Cost, Convenience and Communication) which fits in more with the current trend for doing business.

Figure 14 Lauterborn’s 4Cs matrix


3.2 Product (4Ps)

The 3 circles tool should help you a lot with this section – as you will have already thought about how well the products you have meets the customers wants (only focus on needs if you are positioning yourself as a commodity) and where you have a competitive advantage over your competitors.

Here you may need some help from your colleagues in understanding three things: what are your most profitable products/services, which are the best sellers and who are your current top accounts.  Use a benchmark of 20% – if your revenue from any product or account is over 20% you may be vulnerable to a competitor’s innovation.  If you do offer a service (such as a helpline or maintenance contract/warranty) understanding what this offers in terms of value is also important.

Finally focus on any products or services that have not evolved over the last 5 years to see if they are fit for purpose and competitive. What revenue do these services bring in and what are the plans to change them.

Understanding future launches of products are the final focus of this section – understanding the benefits and features of these products and how they help customers to do their job better.

3.3 Place (value chain and route to market)

Place has been put above price but it really is interchangeable – it all depends on the customer as to whether they prioritise speed, cost or quality.  If speed is the answer then place will be worth considering first as pricing may depend on your speed to market through your distribution chain.

Assess if there are current and any new distribution channels that might be used – either because a competitor is using this channel or because it would fit in with customers’ processes.  It is worth looking at the journey of the customer (awareness, interest, desire and action) to understand how your process fits in with that of the customer.

It is worth looking at your distribution network even if you do not supply through any third parties as some of your competitors might.  If you do use distributors than it is worth knowing how much is supplied through them and who the key accounts are.

Looking at trends over the last 5 years can suggest whether distributors have become more or less effective at selling your products or services.  Understanding trends within the market are worthwhile and getting some feedback from distributors is helpful particularly to the question of how the company can help them sell more – without reducing prices.

How sets the strategy for engaging with distributors, levels of discounts, incentivisation and support is important, but most important is what they offer to the customer – is it convenience, reliability etc.

3.4 Pricing

Raising prices is obviously the goal but understanding what wiggle room you have is important.  Understanding how pricing is done is important – is it cost plus a certain return or is it based on what competitors charge etc.

Understanding how you compare to other companies or what discounts your salespeople are able to give may provide some evidence of whether there is any price elasticity for a given product.

Understanding the loss of sales from a 10% increase in price is worth assessing are you already considered pricey in the market.  You may not have much information about price but you should have some idea of how your customers assess value – is it all about lowest price, cost over a period of time or are they trading off price against an expected quality of the product/experience.

Considering where your competition is based or are supplied from is also important as your prices may have to go up anyway.  Information from other employees can help here, particularly the sales team but bear in mind you need to ask the right questions otherwise you will get feedback that the price is always too high.

3.5 Promotion

Promotion understanding how much is spent on promotion is important – this includes the sales force or telesales function within the business.  How this has changed over the last 5 years and the impact of this is really insightful.  Understanding what your business was looking to achieve by this change is important you can assess promotion by channel or by campaign, with the latter preferable.

Figure 15 Importance of awareness in promotion mix


Evaluating promotional impact is important and quite difficult.  Will a potential customer take a call from your business if they had not seen a post you had written on their industry etc. in most systems trigger points are relatively well collected but the buying process before that is hard to assess.

Cost of sales is an important indicator – an often overlooked element of promotion is customer service and retention.  Can the process be made more effective without damaging the customer experience.

You should consider other promotional aspects even if you then discard them – start off with the services that your competitors use and then look at other ways in which to raise awareness, pique interest or trigger a sale.  It is always worth having a small budget for new promotional activity as it is easier to test and evaluate new concepts one at a time.

Stage 4 – Understand the Strengths, Weaknesses, Threats and Opportunities (SWOT)

Now you have an effective basis of your company’s position in the marketplace you can start to analyse the information before creating your marketing strategy.  The SWOT tool helps to condense your thinking down into a table that can be understood by others within your company

Figure 16 SWOT analysis and where to get the evidence from

Strengths Weaknesses
4Ps in comparison to competitors

Jobs customers want done

4Ps in comparison to competitors

Jobs customers want done

Opportunities Threats
Market changes (STEP)

Customer behaviour/Jobs to be done

New products and markets

Jobs to be done

Market changes (STEP)

Competitors (current and new)

Bullet points can be linked to more information via hyperlinks.

If you have any gaps in the information this is worth putting in at this point as it will encourage you to take action and resolve them as soon as possible.

Stage 5 Creating a marketing strategy

You now have a lot of information and understanding about the marketplace.  How you turn it into a marketing strategy and tactics for the next 12 months is now up to you.  For some businesses a comprehensive SWOT analysis backed up with recommended actions may be all that is needed.  The actions themselves need to be SMART, “appendicised” and linked to the wider strategy.

It also depends on who is to look at this document or have input to it – some businesses have a style guide or brand guide that way need to be referenced or updated based on a formal brand strategy.

Company culture and the message that you are looking to put across will also depend on the best way to present the marketing strategy.  If there is a considerable need for change due to a disruptive competitor or your own information you may need to create a transformative strategy and prepare stakeholders in advance.  In most cases it is a case of what the best way of selling your recommendations to your colleagues as emotion is often more influential than evidence which has not been properly contextualised.

Using past strategy documents as a template is advantageous as it indicate continuity and people are more happy to contemplate change if it appears to be familiar.

I have put together a couple of options which can be amended depending on whether you are looking to defend a position in a marketplace, attempting to take share away from competitors through an aggressive marketing campaign etc.

Option A – Customer focussed

  1. Segment the market into different types based on the job that they want done
  2. Understand how they are going to understand if they have been successful
  3. Which customer segments will see the most growth
  4. What sort of company do they want to do this job (what are they looking for you to convey as part of your brand)
  5. What information do they need to make their choice
  6. How can you effectively communicate this to them
  7. What is the best way to deliver the service to them
  8. What changes need to be made to deliver this (training, marketing tactics)
  9. How this fits in with company strengths
  10. How you will review the effectiveness of the strategy

Option B – Company focussed

  1. What does the company want to be
  2. What are its strengths and reasons for this ambition
  3. How this can be turned into a competitive advantage
  4. How will the company promote itself based on what it does best
  5. Are the products right for this message
  6. What soft services need to be added to augment this product or service
  7. How will the brand attract customers
  8. How to create and effective promotional mix to raise awareness
  9. What distribution network is required for this vision
  10. What needs to be done to ensure customer retention and satisfaction
  11. How the company can price its products to take advantage of its brand positioning
  12. How the company can build stronger relationships with key stakeholders and clients
  13. How will you review the effectiveness of this strategy

A considerable amount of the information in this document can be used as part of a business plan – this can mean that you slot it straight into the overall plan.

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