Posts Tagged ‘marketing’
According to the Federation of Small Business, the economy across Europe and the USA is continuing to ‘fail to improve’.
In a new year report just published, the FSB says that whilst more jobs are being created (which is keeping unemployment down), wage levels are declining and the amount of money that businesses and individuals have available to spend is declining every month – with no end in sight.
As a result, companies and individuals continue to tighten their belts and are on a constant lookout of ways to cut costs.
Whilst I am constantly reviewing all of my spending (both personal and within my Small Business), we as small business owners always need to be wary of cutting costs too far and on the wrong things, which can lead to damaging the cornerstones of our business.
Keeping our Business Cornerstones Intact
Regards of the type of business you run, the size, how successful your business is, or the services/products you offer, there are a few things which every company needs to do to stay viable; marketing, sales, invoicing, accounts, payroll and paying taxes. Without any one of these, a business will soon hit problems and start to die.
So whilst cutting costs are fine, trimming the fat in any of the cornerstone activities can lead to problems. Take marketing….
When times are tough and money short, it’s a very easy decision to cut back or kill any money spent on marketing – adwords can be cancelled, postage is saved by not sending out mailshots, transport costs reduced by no longer attending networking events. Or we may just decide to stop marketing to spend 100% of our time doing billable work. Cutting costs in marketing can see an instant win in terms of cash flow and reduced costs – but what will be the impact in the future?
You may have work at the moment, but what happens if one or more of your existing customers cancels work, goes under or cuts their own costs (with less work for you). Marketing effort takes time, and by the time you realise you need more work, the damage will be done and it may take months or years to start finding new customers again.
Taking advantage of the downturn and avoiding the future hits
One of the advantages of the continued down-turn is that with other companies cutting costs, competition is fierce. This competition produces a double win for a company willing to keep investing in their cornerstones.
Firstly, with less companies spending money, there is less demand for services so offers are on the table. If you use services such as Google Adwords (or the Bing/Facebook equivilants), this reduced competition means that advert placement is cheaper, which means you can now get more exposure for the same money (in my own adwords campaign, I am getting almost 13% more exposure for the same money as last year simply because there are less companies bidding on my key words).
In addition, the fact that people are spending less means that for the savvy shopper, there are plenty of deals to be snapped up should you need to invest in outside services, training, hardware, rental or finance arrangements. You just need to be wary of headline ‘discounts’ which are not quite as good as the advert pretends to be.
But the main concern in cutting costs on the key aspects of your business is that it could lead to more costs down the road. For instance, trying to save costs by putting off paying taxes (PAYE, VAT, corporation tax, etc.) will lead to all kinds of future pain including additional late payment penalties, interest charges and more detailed scrutiny in the future on top of the actual taxes which still need to be paid.
So by all means, continue to review your costs and outgoings and trim the fat where it makes sense to do so – but always have another eye on the cornerstones of your business, and the ability to take advantage of the downturn where your available cash allows.
I am sure that in the last 12 months, you will have received many emails offering web design or SEO (Search Engine Optimisation) services. I am sure that like me, you deleted the majority of them as soon as you spotted the term SEO in the header or text. But did you ever see one or two that made you stop and think if you should be doing more on with your web site?
I don’t want to take about SEO companies today. But I am using them as an example of companies that don’t eat their own cat food – a term given to companies that are ridiculously bad at the services they are trying to offer to you.
Take these SEO specialist companies. If they are so great at getting web sites to the top of Google or Bing, why do they have to spam you? If you Google “SEO companies” – why are they not on the number 1 spot of Google?
What about accountants? Would you trust an accountant who has final demand letters on their door mat when you visit? Or what about marketing companies that are trying and failing to gain customers? What about cleaning companies which are based in the dirtiest office imaginable?
A copywriter to improve my own site
The reason I talk about this, is that I have started looking for copywriters to improve the content of my own company web site. I was recommended and visited a couple of sites of copywriters, who talked a good talk.
But their web sites were shocking. Some examples of problems I spotted when visiting including:
- Missing any calls to action on their site (where are the “call or email me” buttons?)
- Very basic Typos (and if I can spot them, they must be bad)
- Mixed quality of graphics all over their site (some photos, some graphics, some line art, some appear to be scanned)
- Examples of text inviting me that if I am “Interested? Sign up on the right.” – When there is nothing on the right.
- Spaces missing in their text, so words merge together (and become a jumble)
- Lots of uses of “We”, “Us” and “I” when they all say a web site should use “You” or “Your” (the very things I am trying to correct)
I could go on. But the point is, they are advertising a service to improve web sites and web site copy (words), but their own sites are in a terrible state.
In most situations, web sites are the initial introduction to the world – if a copywriter can’t get that write, why would I even think about paying them to change mine?
So I ask again, are you eating your own cat food for the service you provide?
I have just finished reading the Ultimate Small Business Marketing Book by Dee Blick. Actually, that’s not true. The fact is, I have just finished reading the Ultimate Small Business Marketing Book for the third time – and I only got the book a couple of weeks ago.
My method of reading a business book is that as I read the book, if there are tips and advice I think I can apply to my business, I turn a page corner over. Then when I am done – I go through the turned page and turn them into ToDo tasks which I action over the course of a few months or weeks. However, when I got to the end of Dee Blicks book, I found that the majority of pages were turned over. So I re-read it, trying to find the key elements which I can apply. You know what? I didn’t know where to start, there were that many.
The fact is, this is one of the best Business Books I have read. From the very first page (and I mean the first page – before all the copyright and print edition nonsense), its all good stuff. Everything you need to know about marketing, selling, branding, and growing a small business.
Subjects include a Marketing Master class (what you are selling, why, pricing), using strong sales words in documents and proposals, Sales letters (including lumpy sales letters), newsletters, turning bin-able sales correspondence into must keep and respond items, branding, blogging, on-line promotion, exhibitions, and lots more – it’s all covered. On every page there are ideas, backed up with examples of what won’t work, what will, and what will work in different situations. There are hints, tips, tricks, examples and more advice than you could possibly imagine is in one book.
Which leads me to a problem. With most books, I have between 1 and 20 ideas to improve and grow my business – easy to add to my Do list. After reading this book, I have at least 100 (if not more) – so where to start?!? So I am going to re-read it slowly, a page a week, and I am going to implement all the ideas I have highlighted, one at a time. I have no doubt that these improvements will drive my business forward and generate even more sales.
If you need just one marketing book that covers it all, buy this book.
But if you can only buy one business book which will help grow your business, you should still buy this book: the Ultimate Small Business Marketing Book by Dee Blick.
I am busy. Really busy. So much work, so little time – with more requests for work coming in, and work having to be stacked up. Oh, I am not complaining – far from it – it’s good to be busy. But even though I am so busy, today I reactivated my company marketing.
Three months ago, when the orders were coming in thick and fast, I put a stop to my marketing activity. But now, even though I am so very busy, I am advertising again.
Why am I advertising and marketing if I am so busy you may ask? Well, an enquiry takes me around 10 minutes to deal with (which isn’t much of an impact on a busy day), but from enquiry to an order takes me on average 2 months. In two months, I won’t be so busy – so I am planning ahead.
Advertising and Marketing are never (in my experience) something that will yield instant results (not unless you provide take-away meals). If you need instant work, you need to pick up work from agencies, friends ,work colleagues and existing customers.
Advertising and Marketing is a forward planning activity, which takes time to see results. If you need orders and work in the Summer, Autumn and Winter, now is the time to market your services.
One of the small business rules that was drilled into me by a number of former bosses (and small business owners themselves), was that no matter how well or bad things are going, no matter how busy you are, no matter how much money you do or don’t have… NEVER STOP MARKETING! Today’s customers could walk away or go out of business, and the work you are doing now may be completed or dry up… then what????
Marketing is important, no matter if you are a one man band, a contractor or a fully fledged small business – you need to do some form of marketing to have tomorrow’s customers ready to order. But being a small business means you don’t have a marketing department or the big bucks to carry out the marketing activities that other companies may carry out.
That is where this book (Small Business Powerful Marketing On A Shoestring Budget) comes in. It is like having a marketing department of your own with tips and ideas – but in printed format.
This book will show how you can grow your business on a small budget with some incredibly simple but powerful tips and tools. Topics covered include all the common options including PR work, targeted direct mail, exhibitions, business networking, e-marketing, advertising and telephone cold calling. Plus, it includes some newer more interesting ideas that will help push your business to the next stage.
This is a great marketing book, as it covers a little of the theory of marketing, but then cracks on with the practical steps needed to win new customers. It never assumes that you have either the time to spend on marketing, or the budget of a large company. Every idea is quick, simple and relatively cheap.
The book is sectioned in such a way that as well as flowing really well if you read it cover to cover, it can also be read by just going to the sections that particularly interest you.
As a freelancer, contractor or small business owner, you have a product or service you sell – right? So how much will it cost me for you to provide the product or service????? No, really – think about it – how much will it cost me?!?
I imagine if you did stop to think about the question, the answer is ‘well depends what you need, how big the job is, what you want?’. Is this the case?!? But, you must have provided this product or service several times (or more) over the past few years – so what is the average cost? Or what about the minimum? The maximum?
The reason I ask about this is that we all suffer from the Tire Kicker enquiries. People who contact you, ask about your product or services, have no budget, no idea of what they want, and are there just to gather information for something which may never happen. These people are all fine and good if they eventually turn into customers, but they can be a great drain on resource and can distract from other enquiries that really have a need you can meet.
Which is where quoting a ballpark figure comes in. From the outset, don’t be scared to give a ballpark… “yes, typically for the creation of a website my customers pay on average around £2000”…. “well, depending on the scope of the project, data projects in the past have ranged between £5,000 and £30,000 – but let’s talk about your requirements and see what we can do….”
Giving a ballpark figure up front sets expectations. People looking for a cheap and cheerful quick fix will quickly go elsewhere (saving you the effort of producing quotations way out of their price league), whereas those with a real need have an idea of the size of typical projects, and can start working on their own finances to see if the project is worth progressing.
One of my pet peeves (when I am a customer) is getting to a price. If I am shopping for a service, it is so rare to see typical prices on web sites. Even when you say your requirements, getting that ballpark figure is like pulling teeth – which is why being happy to provide the ballpark figure early works so well for all concerned.
If you happen to follow me on twitter, you will have seen that I have been on holiday in Kenya. Whilst I was there, I landed 2 new sales – actually the quotes had been sent out just as I was flying out on holiday, but I got the email confirmation whilst I was out there. In my business we have a rule – we get a new sale and we do a little dance to celebrate. As both emails arrived, my wife and I did the ‘new sale boogie’ on the beach with cocktails in hand – nice!
So how did I find these new customers? Google Adwords! Let me give you some numbers for the adwords campaign since I started it in early September…
- Adword Campaigns running (groups of search terms) : 9 – see the screen shot of my ad groups
- Total impressions : 9,988 (as at the time I type this now)
- Total Clicks from ads : 60 (again, as of now)
- Cost of the clicks : £163.57
- Enquires from clicks : 23
- Confirmed Sales : 2
- Ongoing conversations : 7
- Value of the 2 sales in total : £34,600!!
Not a bad return – £35,000 of sales value from £163 marketing cost and 6 or 7 hours of time. So I am here to say, Adwords does work….. if you do it right.
I have posted about Adwords before, saying it can get out of control – and it can. It’s like a wild animal, you have to keep your eye on it, keep grooming it (refining the styles, ads, words, etc), pull it back when it goes too far, and most of all, get it house broken when you first set it up.
Yesterday I wrote about defining your ideal customer – and this is the most important bit. Once you have your ideal customer defined, you can then plug this into adwords – for EACH AND EVERY advert group you run, set the restrictions as much as possible on things like view times (mine run Monday to Friday, 9am to 5pm), location, language etc.
Other things I recommend when using Adwords are:
- Use Adword rotation – don’t just have one ad per group – have 3 or 4 to rotate, turn off the google optimisation of placement (where it only uses the best), use them all, see which is the worst performing, then change the words to make it more attractive.
- Change the bid amounts to be lower than the suggested average Price Per Click (PPC) – you will still get exposure and clicks, but for less money.
- Turn off (in the settings) under Networks the Search Partners – stick to the main Google Search. Also, change the Display Network option to Relevant pages only on the locations you manage (so google takes account of your previous location/language settings)
- When you get an enquiry from your call to action on your web page – follow it up as soon as possible. Whoever tries to contact you, they will also be contacting other companies so you want to be the first to respond.
- If you have never set up Google Adwords before, get a book on how to do it properly (or sub-contract the set up).
- Keep control of your costs. If you link your Adwords into an online accounting system (such as the fabulous FreeAgent), your costs will be imported for you and will detailed in the accounting analysis.
- If you run Google Analytics, link the Adwords to Analytics (in the Analytics site) – this will then provide further information on which search terms and adverts are working best, bounce rates per advert etc. All of this can be used to refine your adverts and improve the return on investment.
If somebody asked you to define your ideal (or target) customer, could you do it? Have you even given it any thought, or is it one of those business concepts which are there for the big boys, and you are really looking for anybody, anywhere, that has money to spend and needs your service or product?
The reason I ask, is that earlier in the year, I had to define my ideal customer – for a number of marketing activities, and it was a difficult exercise for me. I provide IT database software services to companies with… well…. databases. Should that not do? Does that not cover it (I asked)? Actually, no – it turns out that being vague is one of the worst answers. Without defining the target, how could I hope to know my customers when they come along, or hope to get my message across to the right people.
Take for instance, the concept of location. That’s a fairly easy one I guess for most people. They will say that their target customer is say, in their own country, or if you are completely virtual -anywhere in the world. But let’s think about this. If it’s anywhere in the world, do you want to deal with people in countries that can’t speak English? And what happens if it all goes wrong? Do you really want to travel around the world to sort out a problem for a few hundred pounds of sale value?
So I started to get specific. I realised that because 90% of the time I have to meet the customer at some time, I didn’t really want to travel to Scotland, or Wales, or Ireland, or even spend 7 hours travelling too far north for a prospect sales meeting. So I worked out that for me, my ideal customer lived within 127 mile radius from my home office. I know that sounds specific – and it is. 127 miles from me, is 2 miles off of the French coast, yet includes major UK cities – London, Bristol, Birmingham, Southampton etc. 127 miles can be travelled in a couple of hours. If I said 130 miles, I would be getting prospects in Northern France, if I said 120 miles, I cut off half of Bristol and Birmingham.
Once I had this concept sorted, the rest fell into place. Other categories which I then defined were:
- Language – English speaking
- Company Size – over 30 people, but less than 200 (don’t want to waste time on small SME’s with little budget, nor go for the bigger companies that the big consultancy companies target)
- Industry – Private sector or NHS (my services don’t work for charities, or government offices, etc)
- Turnover – from £100,000 up to £5m – again see the company size logic
- Type of person I need to speak to – IT manager, information manager, Development Manager, CEO or MD
- Working Hours – Monday to Friday 9am to 5pm (don’t want to be working for companies that only operate at weekends, or out of hours)
- Requirements – Must use databases such as SQL Server or Oracle, maybe smaller databases like access, Informix or DB2
I could go on, but suffice to say that by defining as many categories as I could, and then refining them down as much as possible, when my ideal customer appears I know them and know that I can work with them.
Now it could be argued that by creating restrictions (such as location) I am reducing the number of potential customers, but then do I really want to travel 600 miles to Scotland or Ireland to try and sell my services, when there is a person 40 miles from the prospect who has a better chance of the sale and less costs to service them?
Tomorrow, I will talk about how I used the above information for land £10,000’s of revenue for less than a £100 investment.
If you haven’t spend the time to define your ideal or target customer, take 10 minutes and define them now. I promise, it’s worth the effort.
One of the hardest questions that a contractor, freelancer or a small business owner has to answer is how much to charge for your product or service. Even if you manage to initially answer the question, it’s not something you can set and walk away from; pricing needs constant reviews to make sure you are making a profit, that you are generating business, and that the competition is not taking your sales.
There are all kinds of ways to work out the cost model for your product/service, depending on the uniqueness of your offering, and how you want to generate revenue. Whilst not every option will work for every service, the following are the most common methods of working out the sales cost for business:
Cost by Return
The most common method is the cost by return – how much you need to sell a product for and by how many to cover the costs and make a profit. For contractors or freelancers with a service, this is normally your yearly costs (salary, tax, etc) divided by the number of workable days (242 when you take out weekends, public holidays and 4 holiday weeks a year). For manufactured or web based products this is more of a tricky calculation as you need to get a balance between number of units sold multiplied by a price, to see if this covers the material/creation costs to provide a profit.
Cost by Competition
Another simple way of pricing a product or service is to cost by competition; what others are charging for a similar product or service. Again, for contractors or freelancers this is easy, as the typical day rates will be listed by agencies or job sites. For small business, it can be a bit more tricky as it means speaking to competitors to see what features their version has and its price. Also, it can be difficult to find a competitor with a true like for like service, but it can give you an indication of what ball park figure you need to charge.
Drop Your Pants
Not sure where the business term of “dropping your pants” comes from, but it basically means selling as cheap as you can in the hope of winning lots of business and therefore make profit through quantity of sales. One disadvantage of this approach is that no matter how cheap you can sell for, there will always be somebody cheaper. Plus, some customers will actually stay away from your products through a drop in perceived value.
Ad Generated Revenue
This is the principle of the internet and smart phone applications – provide it for free with lots of advertising, in the hope that you will get sufficient traffic which will lead to a relatively high number of advert clicks which in turn generates revenue to cover the costs. Personally, I have never met anybody who has made money from this method (I would really love to hear from somebody who has), so I consider this a very, very high risk gamble.
Freemium products are becoming more and more common. Freemium is where your product comes in two forms; a free to use version (with or without the ad revenue generation as described above), and a premium version with more bells, whistles and functionality. The idea is that people use your product for the free version, become hooked and some will eventually pay you for the premium content. With this method, more thought needs to be given in the cost of the premium version as not only do you need to work with the cost/conversion numbers, but you also need to factor in the features you add (or hold back) to differentiate the two modes. Some companies even make this more complex by providing different scales of premium content. Whilst Freemium is highly used now for a lot of products and services, get the numbers wrong (and there are a lot of numbers to juggle) and your business will not last long.
At the other end of the pricing spectrum is the premium cost offering. A lot of brands actually market themselves as a premium product or service, with one expensive price tag in return for an implied quality above and beyond the competition (look at brands such as Stella beer, Twinings Tea, BMW, etc). If your message is strong enough, this can be a good tactic as it means you need fewer sales to make a profit, and will not get distracted by the customers who will spend less money.
Need First Curve
The Need First curve is ideal for companies with very exclusive or sought after products. The idea here is that on launch, the price is high as people demand the service and MUST have it regardless of cost. Then, once the must-haves have been dealt with, the price is generally lowered over time with the excuse of ‘cheaper production costs’. Brands that have used this in the past include Apple (iPAD, iPhone, etc), Sony with the PS3, Microsoft with xbox etc. If your product or service allows for this curve, then congratulations.
Tempt in Curve
As the name suggests, prices are set cheap for new customers by the way of promotions, discounts and trial offers, and then raise once they are hooked and know the quality of your product. A large number of both product companies (i.e, printers which are cheap, but have high ink costs) and service companies (i.e, Sky television, free box for new customers) use this technique.
Ask the Customer
The method of costing that I like more than any other is asking the customer. Its simple – find a target customer (or a handful), put a price structure together and ask them if they would pay. Feedback from customers is the best way to find out if the price structure will work – if they tell you its too expensive, ask them what they would be willing to pay.
Try Different Mixes
But if in doubt, why not try all of the above, and mix it up. If you have a web site with your price list and a ‘buy now’ button, have different web page versions to rotate and see which makes the best sales/profit margin. If you are making real face-to-face sales, try some quotes as low ball, some as premium, some with an introduction offer, some with your calculated return price, and see which sells and makes money.
Last week, I attended a sales conference for small business owners. About sixty of us attended the conference. As part of this event, twenty people were selected to stand up and give their elevator pitch and then the rest of us scored their pitch for impact. This little exercise was used by one of the guest speakers to illustrate a powerful way to get your foot in the door.
Out of the 20 elevator pitches given, most rated a 5 or a 6 (nobody wanted to give anybody a 2 even though there were some shockingly bad ones), but 2 or 3 stood out as 10s.
The difference between these winners and the rest was simply that the best ones included a metric.
Most of the elevator pitches went along the lines of…
“Hello, My name is Sam Smith of Such-and-such advertising, and I help small companies just like yours increase sales through targeted awareness campaigns which result in more quality enquires”
Nothing wrong with that – says who he is, the company he works for, what he does and the results he can achieve. As I say, most people rated this type of pitch a 5 or 6 out of 10. But then compare it to a 10 out of 10 result….
“Hi, my name is Sam Smith of Such-and-such advertising, and I help small companies just like yours increase sales by, on average, 30% a year through targeted awareness campaigns which result in more quality enquires”
According to the marketing and sales consultant giving the presentation, adding the one simple average metric gives a massive boost to interest through:
- Causing the listener to pay attention – numbers call for mind action, whilst words can just wash over us
- Makes the listener mentally project the same metric onto their own situation. This means that they start to sell to themselves after you stop talking
- Gives a subconscious reassurance – its not just a casual claim in the pitch, but a fact based on numbers
- By providing an average, this leads to a listeners best case scenario planning – averages mean that there will be high returns AND low returns, but human nature means we always project the best
Of course, you really need to have some facts to back up the metric you quote, but even if you base it on just your last completed project, it adds value and is more likely to get you to the next step of the sales process.