Direct MarketingInternet Marketing

Marketing Secrets for Small Business Owners

If you’re a small business owner, you’re probably wondering where you can get the biggest bang for the buck with your marketing dollars. As a veteran marketing professional and small business owner myself, I understand the importance of making the most from a limited marketing budget.

The good news for today’s small business owner is that the Internet and local advertising can provide targeted reach at a reasonable cost. In particular, email, Internet marketing, and classified advertising, can generate huge returns for your business.

* Email Marketing. Each year, nearly 20 billion emails are sent to consumers and businesses. As many as 60 percent of these emails are considered SPAM and about 20% are automatically tagged as such – making their way into the SPAM mailbox of your everyday email client.

However, what most email marketers fail to tell you is that the most productive email solicitations don’t come from businesses, they come from word-of-mouth or viral marketing. Viral marketing is the practice of telling others about a positive experience with a brand, product or service.

As a small business owner, you can take advantage of email marketing by simply encouraging those who receive your emails to forward them to a friend. Also, tag your web pages with a “tell a friend” button which allows for easy emailing of a web page, URL, PDF, or related document. These features cost little or nothing to implement and can generate impressive results.

* Internet Marketing. Often the topic of Internet marketing scares off small business owners. However, Internet marketing itself can be an effective tool if leveraged appropriately. There are a variety of Internet marketing mediums. These options include “pay-for” Internet marketing options such as Google AdSense, the Yahoo! Directory and so on as well as free or cost neutral options.

In Internet marketing, there are a couple of techniques that are highly effective and cost little or nothing to implement. The first and most popular is article marketing. Are you a subject matter expert? If you are, provide articles to other well known websites that can get your company name and URL out there. This can be done for free and provides the added benefit of having other sites link to your website, increasing your site’s link popularity scores.

The second Internet marketing strategy that can drive you business is an affiliate program. At its most basic level, an affiliate program allows other website or companies to sell your products and receive a commission. Explore affiliate programs that can help distribute your products or services.

* Classified Advertising. Still one of the best and most affordable ways to sell your product, classified advertising can be effective if you run your ad for multiple weeks. For as little as $30 per week or less, you can get your company name, product, website, or other unique identifier in front of a local audience.

Weekly papers are especially good if you are targeting a small area. These local papers are also well read – often cover to cover. So, if you want to advertise, forget the large display ads, magazine ads, or anything that costs more than $100. Spend your money on classified ads and measure the response.

Marketing doesn’t have to break the bank for the small business owner. In fact, it should be seen as an important way to drive revenue for your business. If you have little or no money to spend on marketing, be sure to take advantage of email marketing, Internet marketing, and classified ads to drive the success of your business. Also, make sure that everything you distribute (letters, invoices, business cards, and even your voice mail) mentions your company name and website.

Direct Marketing

Zero in on the Right List

You can boost your chances of attracting subscribers to your new magazine by asking your list broker for specific information tools.

You can boost your chances of attracting subscribers to your new magazine by asking your list broker for specific information tools.

So you plan to produce a new, surefire magazine? Congratulations! But remember, to stay in business, you need to attract subscribers. This is where dry testing your direct mail can help. Dry testing–a smaller-scale direct-mail test of a market–is an adventure with any offer. But in a launch situation, everything’s an unknown: the creative, the offer, the product, the price point–and especially which lists to use. To help make that initial dry test a success, try winnowing your list by following these tips.

Because a launch mailing is almost guaranteed to under-perform, you should structure it so that you at least learn about your market in the process. The information you should be looking for can come from these questions: What is the size of my viable prospect universe? What interests are primary to my prospects, and which are secondary? What is my competition doing that I can learn from? What selection criteria are the most productive? What can I do to tailor my list markets by my package or offer?

Ask for the following tools
Once you have these answers, work with your list broker to decide what subscribers you are looking for. This will help you with the next step–picking what parts of which lists will be right for your magazine. To do this, you must ask your broker to give you the following tools.

A prospect universe analysis: When asking your broker for a list recommendation for your test mailing, make sure the broker also supplies a spreadsheet that recaps all lists. For each list, request a recommended test selection (the portion of each list that your broker thinks you should test) with a current count of how many names are available within those criteria. Make sure this spreadsheet is provided to you not only in print, but also on disk so that you can refine it as you trim the recommendation down to what you think makes the most sense for your offer. Then, keep tabs not only on what the lists total today, but what they total after the results are in and the poor performers are cut.

A categorical review
Ask the broker to allocate each list to a single interest category (e.g., crafts, sports). This way, you can evaluate your market by the importance of each category before you mail. Test a minimum of two or more lists within each category that is important to your market. By doing this, you’re really testing the category itself. If the category produces a prime prospect, it should be pursued avidly. If it doesn’t, you know that category is not as important as you thought.

A competitive review
Even if what you have is new, there’s probably a magazine already on the market today that you’re going to compete with. So what’s your competition doing that can help you to minimize your risk? Ask your broker for the sample mail pieces of those publications you feel come closest to your publication’s.

Are they all sweepstakes offers? Are they all monthlies? Are they all priced the same? This will help you set your own strategy. In terms of lists, ask your broker to find out who mails to your competitors’ names. Odds are that if your competitors’ names work for these other mailers, these other mailers have lists that will work for you.

Finally, give your broker the names of up to 10 mailers. Then have your broker give you a report showing the mailers across the top, the recommended lists down the side, and a “XXX” in the cells where one of your top 10 mailers shows up on the usage list. If the resulting spreadsheet shows that some lists are used by more than 60 percent of these mailers, odds are the list will work well for you.

Sample mail pieces
Once you’ve selected the lists you want to mail, you want to be sure you’re testing a productive selection. Ask your broker to give you as many sample mail pieces as possible for the lists being recommended. Sort them based on the look of the piece (e.g., 6″ x 9″ envelope with a brochure versus a double postcard) as well as by offer (e.g., sweepstakes versus premium on payment). Then concentrate on those lists generated from packages and offers similar to those you intend to test.

With large universes, increasingly powerful psycho-graphic selection criteria and much lower prices than most response lists, you may find some of these names so productive you will continue to use them well after your launch mailing.

Direct MarketingInternet Marketing

How to Market to New Customers

Once you’ve acquired a customer, the real work begins. This is what you should do to keep and grow your newly acquired customers.

Okay, so your marketing has paid off – you have new customers. The key to growing your business is to effectively communicate and leverage these new customers into advocates for your products and services and purchasers of additional services.

This can be done in a variety of ways. However, some basics steps must be followed to ensure retention. Here are a few tips you can use to develop long-term relationships with newly acquired customers.

How to Market to New Customers

1. Proactively shape impressions about your business. Whether you’re sending a welcome message, making the first contact via phone, or sending a letter, be sure to position you company for the long-term. Often times, individuals buy products without knowing a whole lot about the company their buying from.

A popular tactic is sending a welcome kit or an overview letter that introduces your company, your values, and the additional resources you have available for your customers including a support email address, 1-800 number and so on. This lets you control your company’s image among newly acquired customers. Otherwise, your customers are free to form their own opinion without any guidance whatsoever.

2. Categorize your customer. Is your customer a high potential? Are they a transactional buyer that will likely never buy from you again unless you offer the lowest price? By segmenting your buyers based on your existing database or known behaviors, you can develop customized communication plans to retain them for years to come. Some communication plan may be focused on up-sell while others may only be focused on retention. The communication plan you implement should be based on the proper categorization of your customer.

3. Show your thanks. Once you’ve acquired a customer, don’t forget to thank them. This may seem trite, but done properly, this goes a long way. Often a hand-written note or personalized email from a company president can do the trick. The real key is to make the customer feel good about the purchase they’ve made and the company they’ve chose.

4. Provide consistency among all touch points. Once you’ve acquired a new customer, you must make sure that you provide a consistent user experience. For example, if the prospect contacts your technical support rep the first day after they’ve purchased a product and receive an answer to their question, then call the following day only to receive a different answer, they’re going to lose faith in your company’s ability to provide consistent and reliable support.

You can benefit greatly by developing procedures that can be documented and delivered consistently – meeting customer expectations. This builds trust in your business and can minimize defections. If the consumer knows they can count on you to give them what they need/want, they’ll be willing to forgo a better price or promise of a better deal elsewhere.

5. Share customer testimonials on future marketing pieces. Many marketers believe that testimonials are only for prospects. The truth is that testimonials can help retain customers, especially new ones, when they are exposed to positive experiences of individuals just like them. In addition to sharing testimonials, it is always a best practice to ask newly acquired customers (within 30 days of purchase) for their feedback/testimonials.

The benefit of reaching out to your customers is that if a problem exists, you can react to it and if they have something positive to say about your product or business, it can be used to reinforce your brand. (Note: be sure to get permission to publish a customers testimonial).

These techniques are very effective for maximizing lifetime customer value. By shaping the image of your company, providing a consistent experience, and sharing testimonials for similar customers, you can develop a positive, lasting impression with your marketplace.

Most importantly, keep it simple. Don’t overwhelm your new customers with tons of email, or direct mail. Develop a well thought-out communication plan that has a definite purpose. And most importantly, remember to thank your customers for choosing your company, product or service.

Direct Marketing

Creating a Realistic Trade Show Budget

It’s imperative to include all the costs associated with exhibiting in your financial plan.

Having a realistic trade show budget is crucial for your exhibiting success. It’s imperative to include all of the costs associated with exhibiting in your financial plan, yet many exhibitors fail to take this crucial step. It’s almost impossible to realize positive ROI when you don’t know how much you’re spending — and what you’re spending it on! If you ask most exhibitors what they think the largest expense associated with trade show participation is, chances are they’ll tell you the display space.

It’s true that exhibiting space is expensive. That 10X10 booth can set you back a pretty penny — and price tags go up for larger spaces and prime locations. However, exhibiting space itself is generally only 30% of the total cost associated with exhibiting. That 30% of your budget is fairly fixed. A fabulous negotiator might be able to get show management to shave a few hundred off the price of exhibit space, but that’s the exception rather than the rule. Instead, you’ll want to concentrate on that other 70% of your budget.

The expenses that make up the bulk of your participation cost are, to some degree, variable. They’re under your control — which means, with time, planning, and oversight, you can keep them down. The lower your costs are, after all, the easier it will be to generate a positive ROI on your show!

The reality is, however, that most exhibitors don’t pay close attention — or any attention at all! — to some of the items that make up the remaining 70%. The cost of their show creeps steadily upward, bit by bit, as small charges mount up and up until they’re a sizable chunk of change.

This is particularly common among new exhibitors — although it also plagues seasoned pros who fall prey to the assumption trap. This is when an exhibitor assumes that things will be done this year the way they’ve always been done previously. Like all assumptions, this one can prove costly! Here are some of the items that make up that 70%, as well as some thoughts on how to keep these costs manageable.

Display Materials
Your display can make your show: attractively presenting your merchandise in an eye-catching and innovative way helps capture attendee interest and draw them to your booth. However, you want to make sure that you’re not overspending on your display. There’s the initial cost of your display, not to mention the storage and maintenance expense. Consider renting or leasing a display (especially if you are a first-time exhibitor or only attend one show a year): you can often get a high level of customization while saving money and reducing headaches.

Freight
Shipping displays, products, promotional literature, giveaway items and all the other show stuff to the tradeshow can eat up a lot of money. Consider your shipping options carefully. Take the time to do some comparison shopping. Who can offer you the best deal and ensure timely delivery? It does no good to save money if your material arrives after the show closes. Often, shipping companies have experts on staff who can help your crew pack material in the most cost-efficient manner possible. Again, a minor point, but one that can save you big money.

Show Services
Read your exhibitor manual! In there, you’ll find information detailing how and when you need to sign up for show services — items like electricity, floor coverings, and so on. The earlier you sign up, the more you’ll save.

On average, costs go up by at least 25% for these services after the initial deadline passes. The closer you get to the actual show, the more you’re going to pay — and if you forget about needing utilities until you arrive on the show floor, you’ll pay top dollar. This is one clear instance where planning ahead will save you a substantial amount of money.

Pre-show Promotion
Pre-show promotion is critical to your success. Show management often offers several free and low cost promotional venues: explore your options. This may include participating in a product display area, an Artist’s Alley, having your name included in category listings in the directory, website advertising and so on. Always consider: will participating in this effort help me reach the target audience I’m trying to reach? If you sell widgets and the show organizer is putting together a directory listing of Widget Sellers online and in the guidebook, and charging $35 to participate, it may be the best $35 you’ve ever spent.

Booth Staffers
Transporting, lodging, and feeding booth staffers can eat up a considerable chunk of change. Most people have a tendency to live a little grander when they’re on the company dime — you know they don’t order the $65 steak dinner at home! Keeping your corporate culture in mind, you may want to introduce some restrictions into the booth staffing budget. Offering per diem meal allowances is one way, requiring receipts is another.

Explore lodging options: some hotels offer convention specials if you can book early enough. Again, pre-planning is your best friend. Travel costs can fluctuate wildly, based on fuel prices and other variables beyond your control. Again, giving yourself enough time in the schedule to find good transportation deals can help control costs. They say time is money. That’s certainly true when it comes to the trade show arena.

By planning ahead and allowing yourself enough time to explore options, sign up for services, promote your participation, and other critical steps, you’ll be able to enjoy maximum results for minimal expense!

About the Author
Susan A. Friedmann, CSP, The Tradeshow Coach, Lake Placid , NY , internationally recognized expert working with companies to increase their profitability at tradeshows. Author: “Riches in Niches: How to Make it BIG in a small Market” (May 2007) and “Meeting & Event Planning for Dummies.” http://www.thetradeshowcoach.com

Direct Marketing

Building Profits with Relationship Marketing

We all believe that building a relationship with customers should result in increased retention, repurchases, average order size, sales and profits. But how can you demonstrate that?

How can you prove the costs of the relationship program don’t wipe out the profits? To conduct database marketing properly, you need to set up test and control groups so you are absolutely sure of what you’re doing. Then you have to sell the results to senior management.

This is the story of a very creative, successful business-to-business database marketing program that serves as an example of the profits that can come of building customer relationships.

A few years ago, Mark Peck, executive vice president and chief operating officer of Hunter Business Direct in Milwaukee, was approached by a large manufacturer of building products that sells primarily to building contractors. The company produces a big catalog each year that it sends to 45,000 contractors. Business was good, but management knew it could be better. They wanted to experiment with database marketing, so they went to Hunter.

Peck formed a marketing strategy team composed of his staff and members of the manufacturer’s marketing group. They ranked all the previous year’s customers into deciles by total sales. They chose to zero in on the top three deciles, a group of about 1,000 business customers. Customers in the top percentile placed about 18 orders during the year, amounting to about $20,000 each. Those in the third decile placed about six orders, averaging about $5,500.

The team decided on a pilot program to determine what could be done to stimulate increased sales from these top three deciles. The team divided the customers into a test group of 500 and a control group of 500. The goal was to increase repurchase, purchase frequency, average order size and annual account revenue by building close relationships with the test group, while giving the control group no special attention. The control group was treated exactly the same as customers had been treated by the company for the past three years.

Statistics on previous purchase behavior enabled Hunter to predict with some accuracy what the groups would do during the test year. The team studied and predicted trends of retention, repurchase, product penetration, average order size and number of product lines per customer. As the test worked out, the control group behaved exactly as expected.

The team selected two people to call the decision-makers in the 500 companies selected as a test group. One person was from customer service, and the other was a building products application engineer. Their job was to build close relationships with the personnel in the 500 test firms using telephone, mail, fax and email. They called each of the companies to learn who the decision-makers were. Then, on a periodic basis during the next six months, they called these decision-makers to provide engineering support and discuss the customers’ needs for and use of the company’s building products. They did not offer any discounts or special benefits, only friendship, information and customer support. Their calls involved:

* Following up on bids and quotes.

* Providing product training.

* Calling attention to existing pricing specials.

* Discussing customers’ needs.

* Giving product comparison information.

* Explaining new products.

* Offering sample programs. The results were amazing.

In the first place, the relationship building had a small but measurable impact on repurchase. Of the 500 companies in the control group, 365 made purchases during the following six months. Of those in the test group, 380 – or 15 more companies – made purchases during the same period.

With an average revenue of $9,000 by these 1,000 firms over a six-month period, customer retention was highly important. The spending by these 15 additional firms alone during the six months amounted to $135,000. That was a worthwhile return for the $50,000 spent on the two-person relationship-building staff in the same period.

But the benefits were not limited solely to retention. The number of orders increased as well.

The control group placed fewer orders (82%) than they had in the previous six-month period. The test group placed more orders (112%) than they had before.

This amounted to a 30% increase in orders as a result of the six-month test.

The number of orders doesn’t tell the whole story. The average orders the test group placed were larger in size than the control group – and larger than the orders they themselves had placed during the previous six-month period. Those in the control group spent 14% less on the average order, while those in the test group spent 14% more than they had on the average order in the previous six months. The overall difference was an increase of 28% in the size of the average order.

The combination of increased orders and average order size in the two-person test resulted in a whopping 81% gain in total revenue.

What this showed was that by spending $50,000 over six months to build relationships with 500 customers, revenue could be increased by nearly $2.6 million.

No one can look at these numbers without seeing the power of successful database marketing. The vice president of marketing was thrilled with the results, and prepared for a major rollout in the following year.

But in the business world things don’t always work out “happily ever after.” Soon after the test was completed, the manufacturer was purchased by another company.

In the reshuffling, the relationship-building program lost its champion and its funding. While the program could be started again in the future, it will require the reeducation of new management and marketing staffs.

The setback, however, doesn’t invalidate the tremendous success of this powerful pilot study. Relationship marketing works, particularly in a business-to-business setting.

Even so, it is an uphill battle to get the ideas of relationship marketing adopted throughout the DM industry.