Save Your Advertising Dollars by Saying "No"

As small business owners, so many of us have fallen prey to the smooth talking media sales reps.  The minute you open your doors for business, sales reps from the TV stations, newspapers and radio stations are the first ones in your door.  In their hands they have what I like to call “the deal of the week”.  You know you need to market your business, especially when you’re just starting out, so you sign up for these promotions because they’re “a limited-time promotion” and “you’ll never get a better deal”.

I have a client who, when I first met her, had spent over $15,000 in advertising the previous year.  Her comment to me was “I’m not sure if any of it worked.”  This was a very clear example of someone who had been too nice to say, “No, thank you” to the sales reps.  I understand that sales reps need to make a living.  I get that.  What I’m saying is that you need to be smart about where you’re spending your money.

Before the sales reps ever come walking through your door, here are some things you need to do to save yourself a lot of money.

1. Know your customers very, very well.  I don’t just mean your existing customers, but who your ideal customer is.  Who do you want to communicate with?
2. Know where your customers are.  Do they read a physical newspaper or do they read an online newspaper?  Maybe they don’t read a newspaper at all.  Maybe they follow their favourite media online and get updates through social media.  You can’t communicate effectively to your customers if you’re not sure where they are.
3. Create some marketing goals.  These goals will stem from your overarching business goals.  Do you want to attract a new demographic?  Do you want to introduce a product or service?  Decide what you want.
4. Establish some tools to measure the effectiveness of your marketing campaigns.  If you have no way of tracking what’s working and what isn’t, you’ll never know what forms of advertising to use.  This is precisely why too many business owners wind up spending way too much money on their advertising.
5. Stick to a budget.  When you develop your marketing plan for the year, you need to create a budget to work from.  Stick to that budget and don’t be afraid to tell the sales rep that this current promo doesn’t fit into your budget.

Now, every time a sales rep walks through your door with the latest “limited-time promotion” stay strong and walk away from the “deal” if it doesn’t fit into your plan.  If it does fit into your plan and budget, take advantage of the deal.  Work closely with the sales rep to make sure the ad copy addresses the campaign goals and you’ll be all set.

Exceptional Service - The Cornerstone of a Successful Business

Marketing is so much more than just advertising.  I’m going to say this until every small business owner gets that through their heads!

Marketing ≠ Advertising

Marketing is a complete set of activities working together to create a positive, memorable brand image of your company.  And one of the most important parts of that is the level of customer service that the customer perceives your company provides.  It’s not just about what level of service you actually provide; it’s about what the customer perceives to be great service.

Having worked in retail management for so long, I am probably now the pickiest customer out there.  I worked hard to create amazing teams of staff members who delivered exceptional service and went above and beyond for each and every customer.  So now, when I go into a store I automatically take note of everything going on in the store.  I pay attention to the cleanliness of the store, the visual layout, the friendliness and professionalism of the staff, and how knowledgeable and customer-oriented the staff are.

These are just a few of the things managers and business owners need to be keenly aware of.  Yes, I’m the picky customer so I notice stuff that maybe other customers wouldn’t be looking for.  But why not strive to impress even the pickiest of customers.  Even the customers who might not have paid attention to the small details will be very happy with what they perceive as “exceptional” service.  After all, who doesn’t want to feel special?

We’ve all had some bad customer service experiences in our lives and they remain stuck in our memory forever.  But fabulous, amazing customer service experiences also stand out in our mind.  One experience stands out in my mind so clearly… and it happened over 9 years ago!  My husband and I had taken our 2 boys to Ottawa to visit my brother and some friends of ours.  We decided to take the boys (who were 2 and 7 at the time) to Moxie's Restaurant for dinner.  The waitress we had that night was absolutely phenomenal.  She did everything possible to make sure our kids thoroughly enjoyed themselves, which of course made the meal that much more enjoyable for my husband and I.  Now, every time I see a Moxie’s Restaurant, I associate the place with happy thoughts and fully recommend the place to all of my friends and family.

That’s what you want your customers to do.

Take an honest look at your own business.  When you take out the bias you have towards your own way of doing things and really look at things from a customer’s perspective, you may not like what you see.  So, don’t scrimp on your training budget when it comes to fully training your staff on exceptional customer service.  Remember that that memorable  image will remain in your customers’ minds for a very long time.

Create a Marketing Strategy in 3 Easy Steps

I just came to the realization that all of my blog posts just dance around the topic I am the most passionate about.  And that’s strategy.  I’ve written about integrating your marketing, 3 easy steps to creating a marketing budget and I’ve talked a lot about building a brand.  So, today I decided that I’m just going to lay it all out there, straight forward, step by step on how to develop a strategy before you even attempt to spend $1 on any of your marketing.

Developing a strategy is by far the most important step when marketing your business.  The biggest mistake small business owners make is that they know they need to market their business, but they don’t know where to start.  So, what happens is that they get roped into these “deals” from ad executives from the local newspapers, and radio and TV stations.  They wind up spending hundreds or thousands of dollars on advertising but don’t really know whether it worked or not.  Well, let me walk you through a 3-part process to help you develop a strategy so you don’t spend any more money on advertising that doesn’t work.

Part 1 – Brainstorm:

This is where you throw out every possible thought that comes to mind.  Sometimes the crazier the better.  I have found that sometimes a member of the team will throw out some weird and wild idea that ultimately we end up using some or all of that idea.  But this is also the time to define some really key things such as your intended target market, your goals and your budget.

One of the most important keys to developing a strong marketing communications plan is to determine your target market or target markets and know what they want and how they want to communicate with you.  The trick is to discover what that ideal customer looks like in the most specific way possible and then go about building an entire marketing strategy around attracting more of these ideal customers. 

Part 2 – Budget:

This is where most of my clients get the most stressed out because they haven’t allocated any specific amounts to their business activities.  They are really just “winging it.  If you don’t have a plan this is where you can get into trouble with your spending and then it really will be too expensive. 

1.       To create a marketing budget for the year, set your budget between 5 – 10% of your gross annual sales.  When you think about it, $100,000 is sales with a marketing budget of 5% only gives you $5000 to work with for the year.  This is where the creativity comes in, knowing where to best allocate those dollars.

2.       From that budget, develop marketing campaigns for the year.  Then develop a budget for each campaign based on the yearly budget you have just set for the company.

Remember that advertising doesn’t have to cost you a fortune.  Leave the big marketing budgets for the big corporations who have the money to spend on it. 

Part 3 – Metrics

Now, you need to set metrics for tracking the direct impact of each campaign on its ability to help you reach your marketing goals.  If you have nothing to measure your marketing efforts with you won’t know whether or not your marketing is actually working.  Some common metrics include number of click-throughs on an online ad, number of new sales, number of new leads or percent increase in traffic to the store.  In order to be useful, metrics need to be measurable and quantifiable.  So, make sure you define them specifically with numbers and then break them apart into tiny segments that you can work towards achieving.  Review last year's sales records so you have something to which to compare this year's sales. Here is where good record keeping is essential. 

An increase in leads or sales over last year's numbers might indicate that your current marketing campaigns are actually working but don’t make the mistake of putting all of your eggs in one basket.  One marketing activity cannot be held accountable for your total business success.  So be sure to have a variety of metrics to track.

So, now you have an idea of how to create a strategy before you actually go about spending any money on your marketing.  For more in-depth information, download the video below.  This video is from a webinar I presented a few months ago and gives you a much more detailed step by step process to creating a strategy that works.

Strategy Before Tactics

I always love hearing from small business owners to find out how you do things.  I’d love to hear your input on creating a marketing strategy.  Tell me how you created your strategic marketing plan.

 

3 Easy Steps to Creating a Marketing Budget

Setting budgets is so critical to any business, big or small.  But I often see so many small business owners just winging it, not really knowing where all of their money is going.  I’m not an accountant but staying on budget is crucial to my job.  Everything I do is based on a budget.  Without a budget or a plan, a business runs the risk of spending more money than it is taking in or, conversely, not spending enough money to grow the business and compete. We all know that we need to spend money to make money and we want to save as much money on those expenses whenever possible.  But how do you determine how much to spend on marketing your business?

Creating, monitoring and managing a budget does not have to be a scary, overwhelming thing.  Even if you have no accounting experience or if you don’t think you have enough time in a day to do it, it really is imperative that you take the time to do it… and do it well.   It will allow you to allocate resources where they are needed. You simply need to work out what you are likely to earn and spend in the budget period.  Here is an easy 3 step plan for creating a marketing budget that works.

Step 1:

Start by creating budgets for the entire year. Be realistic about your projected sales for the budget period.  If you overestimate, it will cause you problems in the future.   Develop separate budgets for marketing, inventory, payroll, and anything else that you will be required to spend money on.  Continuously check to make sure your budget balances and that your numbers make sense.   

Don’t forget to work in a salary for yourself.  I see this happen all the time, where the business owner sinks so much money into the business that they don’t bother paying themselves. 

Step 2:

To create a marketing budget for the year, set your budget between 5 and 10% of your gross annual sales.  When you think about it, if you only have $100,000 in sales with a marketing budget of 5% that means you only have $5000 to work with for the year. Choose a number that you are comfortable with but a substantial amount of money to achieve all of your marketing objectives.  In step 3, you will need to use your creativity to know where best to allocate those dollars. 

Step 3:

From the budget amount you determined in step 2, develop your individual marketing campaigns for the year.  Determine a budget for each campaign based on the yearly marketing budget you have just set for the company.  Make sure you align your marketing goals and objectives with your campaign planning and spending.  You may need to put more money into marketing activities in one or two months in the year, especially if you’re running a strong campaign or if you run a seasonal business, and less in other months.  Just really take a look at your marketing goals and make sure you’ve budgeted enough money for each of those activities.  If that 5% you allocated in step 2 isn’t enough, go back and adjust your numbers. 

Remember that advertising doesn’t have to cost you a fortune.  Leave the big marketing budgets for the big corporations who have the money to spend on it.

It’s going to take some time to play with your numbers to make everything balance.   That is ultimately the goal… to make sure you’re not in the red.   Stick to your budget as closely as possible, but review and revise it as needed. Remember it’s a plan, a guide to your business finances.  It’s not set in stone, but constant review of it is essential to make sure you know where your business stands.

 

Advertising Impacts Your Choices More Than You Think

What made you choose to stop at Tim Horton’s this morning? (Yes, I said “choose to” because although you may think it’s just a normal part of your day, it is a choice.)  What made you by that particular box of hair dye or lipstick?  Think for a second about how much advertising really affects your daily purchases without  you even realizing it.

Let’s try an experiment.  Turn off your TV, radio and internet for a month.  Don’t look at a magazine, newspaper or any form of media for that time.  I doubt very many people could that for even a day, let alone a week or a month, or God forbid… a year!!

I’ve been doing a lot of family history research lately and I’m fascinated at how my ancestors lived their lives.  And as my hometown, the City of Timmins celebrates its hundredth anniversary this year, I’ve been interested in how people lived during that time.  A hundred years ago, my grandfather was a 3 year old little boy growing up on a farm just outside of Brodhagen, Ontario.  At that time, he didn’t have a TV, a computer, magazines or video games.  His parents were farmers living away from any sort of “city life” with really only the radio to keep them up to speed with what was going on in the world.

They went into town when it was necessary to buy what they needed.  That was it.  But, of course, once at the store, the manufacturers had their own “advertising”, like packaging to entice you to buy their product over another.  The store owner could have been having a sale, maybe to get rid of old product.  But unless my great-grandparents went into the store in the first place, they weren’t aware of the different products that were available or any sales that might be happening.  And if it wasn’t in the budget, they just didn’t buy it.

My great grandparents were not educated people.  In fact, even my grandfather only had a great eight education.  But even, today, with so many of us being much more highly educated, we’re not even fully aware of all the marketing activities companies do to entice us into buying their products.  That takes me back to our experiment.  If you lived like my great-grandparents did a hundred years ago, with limited access to media, how would your purchase decisions be different from how they are now?  Would you spend less?  Of course, this is only hypothetical because as we all know we can’t fully escape advertising.  But then again, do we even want to?

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Direct Marketing - It's Not Just Junk Mail

We have all had “junk” mail appear in our mail boxes.  Well, it’s only junk if it doesn’t interest you.  But that doesn’t mean direct response marketing doesn’t work.  If it didn’t work, nobody would do it.   Similar to sales promotion activities, direct response marketing is designed to encourage immediate action.  Things like catalogues, direct mail flyers, sales or fundraising letters, magazine inserts and statement stuffers.  Even some forms of television can be considered direct marketing.  Things like infomercials and commercials that encourage you to “Buy now!  Just call the toll free number on the screen.  If you call in the next 10 minutes, you’ll receive a free bonus gift!”  Direct marketing is very highly targeted to ensure that the advertiser is reaching only a very specific target market as opposed to mass marketing which attempts to reach a much broader audience.

 

Advantages of Direct Marketing:

·         Allows you to target your message to a very specific audience.   Whatever kind of business you have, you will have defined specific target markets when creating your marketing plan.  Mail-outs can be sent specifically to those people only instead of mass mailing something.  Also, each specific piece can be customized to each person in that target market.

·         You can evaluate its effectiveness. If you compare the number of responses to the number of pieces mailed, you can calculate the response rate. If you include coded coupons or response cards you can keep track of exactly who responded and from where.

·         Mail readers are actively involved.  When people take the time to read their mail, your message will have their undivided attention while they open and scan through it.

Disadvantages of Direct Marketing:

·         Many people don't like unsolicited offers and many are skeptical of their validity.

·         Increasingly, busy people don't even open what they view as "junk mail."

·         Using this method of advertising requires thorough maintenance of mail lists. Many small business owners don't take the time to update their mailing lists. With outdated lists, however, mail goes to undeliverable addresses, which is a waste of money.   Another possible glitch - an inaccurate list may misspell names or address a person who has died. These kinds of errors annoy, or worse yet offend, the recipient.

·         Some groups are concerned about the environmental impact of resources used for advertising mailings.

·         It can be expensive.  When creating a direct marketing campaign, you really need to weigh out the cost differential between producing the materials and the profits earned from any new business the campaign will generate.

Tips on Developing Your Direct Mail Piece

·         Focus on customer benefits and do it right at the beginning. The first sentence (the lead) in a direct mail letter should be about benefits.   Your prospective customer only takes a second or two to decide whether or not to keep reading or to pitch it.  So, make sure the benefits of your product or service are offered right up front.

·         Keep the offer simple, easy to understand and persuasive.

·         Include a "call to action."

·         Ask the customer to "call today."

·         Include a postage-paid reply card.

·         Make the offer for a limited time to encourage prospects to act.

·         Make it easy to respond or place an order. Include order forms if appropriate for your product. Include a:

o   toll-free phone number (24-hour ordering if possible)

o   fax numbers

o   email addresses

o   payment options such as credit cards

o   payment plans for big ticket items

·         Use a personal and friendly writing style. Mail is a one-to-one communication; make it sound that way.

·         Create different direct mail pieces to address different audiences - even when you're offering the same product. Your product or service may have a different benefit for different target markets. So, create multiple forms of the same offer for those different audiences.

·         Consider making your mailing "3D" by including an object in the envelope that will peak the recipient's curiosity.

Mailing List Options:

Mailing lists are available for purchase, but they can be quite costly, especially for small businesses on a tight budget.  A better option is to use your house list.  That means that you really need to be diligent about obtaining information from your current customers and people who have inquired about your product or service in the past and maintaining it.  Keep your mailing list current by periodically asking your customers for their current mailing address.

Success Measurements:

When you include coded coupons or response cards, you can track how many you have received and where they came from.  Direct mail experts tell clients to expect anywhere between a .05 percent and 1 percent response rate.  That means that if you mailed out 1,000 direct mail pieces, expect to receive about 10 responses.  That might not sound like a lot, but it’s better to receive 10 actual sales, than 500 “maybes” that you could be chasing down forever.  So, don’t increase the number of mail outs just to increase your response rate.  The quality of the response is what’s important.

Do You Know Your Numbers?

So, how many small business owners think about developing an accurate budget?  We all know that we need to spend money to make money and we want to save as much money on those expenses whenever possible.  But do you know how much you actually have available to spend in the first place? 

Estimating and matching expenses to revenue (real or anticipated) is important because it helps small business owners to determine whether they have enough money to fund operations, expand the business as well as generate income for themselves. Without a budget or a plan, a business runs the risk of spending more money than it is taking in or, conversely, not spending enough money to grow the business and compete.

The budgeting process is a key part of running a business successfully. It provides an opportunity for management to thoroughly review progress and to set objectives.  The budget is also a living document which needs to be continuously reviewed in light of the business environment and actual performance. In addition, formal reviews should be done on a quarterly basis. This gives business owners a chance to see what’s really going on their business.   

Benefits of a business budget

There are a number of benefits of drawing up a business budget, including being better able to:

·         manage your money effectively

·         allocate appropriate resources to projects

·         monitor performance

·         meet your objectives

·         improve decision-making

·         identify problems before they occur - such as the need to raise finance or cashflow     difficulties

·         plan for the future

·         increase staff motivation

Okay.  So, now you know why it’s so important to have a budget, but do you know where to start when making one that works?

Creating a budget

Creating, monitoring and managing a budget is key to business success. It helps you allocate resources where they are needed, and it does not to be complicated. You simply need to work out what you are likely to earn and spend in the budget period.  The key here is determine a budget for each item that you need to spend money on; marketing, inventory, payroll, rent and utilities, office expenses.  Everything. 

Start preparing your budget two to three months before the start of a new financial year.

Begin by asking these questions:

1.                   What are the projected sales for the budget period? Be realistic - if you overestimate, it will cause you problems in the future.

2.                   What are the direct costs of sales - ie costs of materials, components or subcontractors to make the product or supply the service?

3.                   What are the fixed costs or overheads? Break down the fixed costs and overheads (the costs that are beyond your control) by type, for example:

•             cost rent or mortgage

•             payroll costs - pay, benefits, etc.

•             utilities - heating, lighting, telephone, internet, etc.

•             vehicle expenses

•             equipment costs  

•             legal and professional costs, including insurance

Your business may have different types of fixed expenses, and you may need to sub-divide these into smaller categories. Don’t forget to work in a salary for yourself.  I this happen all the time, where business owner sink so much money into the business that they don’t bother paying themselves. 

Now you need to figure out your variable expenses, the things you can control.  Things like marketing, travel costs, office expenses, etc.  Decide how much you want to be able to spend on these things throughout the year, based on the funds available.  Once you have figures for income and expenditure, you can work out how much money you're making. You can look at your costs and work out ways to reduce them. You should also be able to spot if you are likely to have cashflow problems - giving you time to do something about them. 

It’s going to take some time to play with your numbers to make everything balance.   That is ultimately the goal… to make sure you’re not in the red.  But taking the time to really dig into your business’ finances is a measure of control all business owners need to have.  Stick to your budget as closely as possible, but review and revise it as needed. Remember it’s a plan, a guide to your business finances.  It’s not set in stone, but constant review of it is essential to make sure you know where your business stands.