Marketing for Small Businesses 2018
“Perhaps you are starting a repair shop that specializes in fixing antique radios, you are not in the radio repair business. If you sell accounting services to non-profits, you are not in the accounting business. You are in the marketing business. Let me repeat, you are always in the marketing business.”
Marketing is a strategy to get customers to know like and trust you. Tactics are the various methods you use i.e. direct mail, newspaper ad, online, pay per click etc. Most small businesses use a shotgun approach to advertising running ads with the hope that a potential customer would happen to see the ad and take action. Hope is not a marketing strategy but a quick way to lose money.
Defining who your customers are (commonly referred to your customer avatar) as narrowly as possible allows you to focus with laser-like precision. What is the typical profile of someone who buys your product or service? What is their income and education level? What are there hobbies? What publications do they read? What keeps them up at night? You must get inside the mind of your customer.
Purchases are made out of emotion. It is after the purchase that customers rationalize their decision. It is critical that you must connect with your customers emotionally. Not in a manipulative way, but in a way that allows them to feel why they should purchase your product or service over another.
Having a great product or service is not enough if you don’t have customers purchasing your product or service. Small businesses must have a return on investment on advertising. Every dollar is critical. Marketing for small businesses without a return on investment is like setting money on fire.
How to Evaluate Marketing Campaigns
Example: You operate a tax preparation service for small businesses. You could advertise in the local newspaper or the local business magazine. The business magazine more narrowly and accurately targets your ideal demographic. The ad in the business magazine is twice as much as the general newspaper. Should that matter? Absolutely not.
You spend $400 on the ad in the business magazine and as a result, 100 people saw your ad and you get 15 inquiries. 15% response rate. Out of the 15 inquiries, you get five new customers. A 33% closure rate. We can now calculate the customer acquisition cost. $400 ad spend/ 5 new customers acquired.= $80. Customer acquisition cost is one of the most important numbers to know.
However, you still don’t know if it was a profitable campaign. You charge $300 per business tax return. After expenses, you make a profit of $120 per tax return. Subtracting your $80 per customer acquisition cost have a profit of $40. Have you had a successful campaign …right? Yes, not only have you made a profit on the front end, provided you retain the customers the lifetime value of these 5 customers will pay a lot more on the back end. If you maintain your prices next tax season, these five customers will each deliver $120 in profit. $200 profit this tax season and $600 next season.
Marketing for Small Business Maximizing for the Long Term
Although you made money, something is still bothering me. 100 people saw your ad. Five people were ready to buy now. But what about the other 95. At a minimum, you should have captured the contact information for the 10 inquires who called but didn’t buy. Not everyone who sees your advertisement will be ready to buy.
What if you had offered something of value for free. In the case of a tax preparer, you could have offered a free tax savings checklist. Example, your ad contained verbiage offering the free checklist and included the web address to your landing page where they could download the checklist once they opted for your e-mail list.
Now, that you have their contact information you can follow an e-mail sequence offering tax saving tips and advice on a weekly basis. You have substantially increased the odds that they will buy from you in the future offer additional value. Your complete focus is only on being of service to them. What do you think their response will be when you ask for their business.
Utilizing E-mail Marketing for Small Businesses
I started my marketing career in the early 90’s in direct mail. Things have come a long way. Direct mail is still an effective marketing strategy despite being more difficult to track.However, e-mail marketing allows you to stay in constant contact with customers and potential customers. You are able to track open rates and test different messages and offers.
Your marketing efforts should actively engage people are not ready to buy at this time. It might be offering a 10% off coupon that never expires or a value report or checklist. Offer something of value in exchange for an e-mail address. You must keep in regular contact at a minimum weekly. You must continue to be of value by offering information relevant to the recipient. If all you do is try to sell, you unsubscribe rate will go up and your open rate will go down. Build a relationship and then ask for sales and referrals. Your e-mail campaigns should be automated. I use MailChimp which, I love. Every time someone new joins my mailing list they get a welcome email, followed up the next day with a information packed newsletter designed to help their small business grow.
Read our article Developing a Marketing Strategy for more tips and resources.
Jef Scot provides solutions to small businesses to help them grow. Website design and hosting, direct mail, e-mail and online marketing. Affordable solutions that don’t compromise. Please e-mail us for a customized quote at info@Jefscot.com. Please review our Solutions page for a list of services.