Don’t Go Broke 101 - Small Business Marketing
Mar 1st, 2009 by admin
Starting out in a new business is certainly a an exciting time, filled with many decisions about your product or service, about when and how to do things, and so many other things. Given the care that people take with these important aspects of their business, it is surprising that so many businesses fail - but it doesn’t have to be you.
A while back, I read the back cover of the weekly bulletin at our Church - the very back where the ads are for local businesses that support the Church. There among the ads, was some blatant self promotion for advertising in the bulletin. It was a small section, where an ad could have gone, but for being on the back of a bulletin, it had some remarkable business insight.
It read something like this: Advertising is not important. Why would it be? After all, this morning you got up off of the bed you found in a sale flyer, brushed your teeth with a toothbrush you saw advertised on TV, then you had your morning run wearing the shoes that you have seen advertised so many times too. The bulletin went on a bit further, but you get the picture. The most successful products are the most heavily marketed.
Now when we run our businesses, we have the same problem. Our potential customers don’t know that we are there, waiting to provide them excellent results. We have to tell them. Of course, the mass market approaches that were used for our toothbrush and our sneakers probably aren’t right for us. Small businesses tend to be more niche market players.
Of course the niche where we operate also provides us opportunities for marketing. By focusing directly on the niche that we operate in, we can get the best results.
Now before we get down and dirty with various ideas for marketing, let’s consider something. What sorts of results are good results? Do we need to get the phone ringing off the hook for our business to be successful? Of course the answer to that varies, but in general, a business should be able to survive without the phone ringing off the hook.
Before you started you business, you should have calculated how much money each new customer brings in, and how many of those new customers you need each month for you business to stay afloat, and achieve your financial goals. Another thing that many businesses rely on heavily is repeat business - and this is just smarts: an existing customer is easier to sell to than a random person on the street. They know you, and will buy from you out of habit, because they trust you, or even because they don’t have anywhere else to get what you give them.
With that in mind, you can actually deal with even lower success in your marketing efforts, since each customer you get will be with you, and provide you income for years to come in most cases.
Of course we want the best success we can get - and we attempt to achieve that every time, but with our economy, competitors, and other factors, our marketing efforts can often seem like they are not getting any traction.
So what is a good response rate? The simple answer may not be what you expect. Any response that produces net revenue is good. That is the best way to put it. Over time, through testing of various methods, we can make our exact response and buy percentages better, but today and tomorrow that anwser will not change. We can successfully market using any method that makes a net profit (a.k.a. subtract the cost of the marketing from the income brought in by that marketing.)
If we use this approach over and over, our businesses are growing.
Now there are some good approaches to marketing, and I will go into more detail at another time, but for small businesses, there are few that typically top the list in effectiveness. Your results and the methods that work best for your business will depend on your skills, and type of business.
1. Networking. This seems tired, and old, but consider this: Earlier I noted that our efforts can often seem to fail to get traction. Networking feels like this from day 1, and continues to feel that way until the day it gets you a big account, or more importantly, keeps you plugged in. By knowing what is going on in your industry through simple human contact with your peers, you can get more business intelligence than you could likely get if you spent far too much of your precious time reading industry magazines and other news. Humans pare down the information much better than the news sources, and will often get you much broader reaching information. This information is then what you can use to understand where to market and how to market your business in other ways.
2. Cold calling. Whether in person, or on the phone, there is no substitute for good old fashioned salesmanship. How many times have you bought something from a salesman? Many times no doubt. That is because this is simply the best way to communicate to potential customers. No brocure or ad will ever deliver what a salesman can. This is almost a form of networking too. By directly talking to your potential customers, you understand what they care about. You can also focus on those prospects that are the most likely customers, saving you time and money.
3. Focused advertising. This can be anything from trade shows and community festivals, to specific websites and pay per click ads. If your customers are someplace, and there is good quantity and concentration, then it will probably pay to be there. Try to figure out where your customers are - and then see what ways you can reach them. For limited budgets, you can often get away with personally attending various events where your potential customers will be, and then starting up conversations and handing out business cards.
So lets get back to results percentage for a second. If you go and do those things listed above, many new business owners will be surprised and dismayed by the number of people they talk to who say no. Of course there is some technique involved many times, so you should be working on that - but even the number of NOs you get initially is probably not completely unacceptable.
Just go back and try to understand how many new customers you need each month, then compare that with the results you got during your marketing. If you got 50 “no” answers, and 1 “yes”, then just decide: How many people did I talk to? To get the results that I need, how many people do I NEED to talk to, based on my results so far?
You may be surprised how many people you need to talk to, but probably won’t be unable to talk to that many. To take cold phone calling for an example: it is considered “normal” for as many as 200 calls to be made before getting a single bite. And 2000 calls to be made before getting a sale. Now that is for less focused, more broad market calling, made with a computer voice on the phone. If you call personally, the numbers should not be so large, and if you use good salesmanship, the numbers look better yet. If you call specific people, create a relationship, and follow up… then you are really being effective, and can see a very high percentage of sales.
Whatever method you use, just do the two basic things: 1) Calculate how effective your marketing effort is being, to determine if it is cost effective to expand that method to the level needed to get your target new customer levels. 2) If it is working, then improve it over time by experimenting around with it to make it even more effective.
In any case, make sure that you do your marketing. This is probably the single biggest reason that single person companies fail. They just don’t carry out effective marketing.
Almost anyone can flip a burger, but it takes a business person to get someone to buy the burger. By marketing your business, you can ensure success.