Most small business owners do not think they can afford big marketing plans. To them, marketing is advertising, and everyone knows that advertising is expensive. Of course, advertising is an important element of marketing strategy. But, there are numerous low-cost tools and tactics that a small business can use to increase their visibility and attractiveness to potential customers. And, all that is required to access these tools and tactics is research, planning, preparation, and execution.
Make no mistake, you need to include marketing in your budget. Without marketing, your business could easily become the best kept secret in the world and go bankrupt. Customers are bombarded with thousands of marketing messages and images on a daily basis and their memories are short. You must establish a big enough budget to create and maintain enough visibility for your company, products, and services so customers won’t forget you.
A word of caution is in order. While it is tempting to copy the competition, what works for them may not work for you. Effective marketing must differentiate your business from the competition so you can attract and retain profitable customers. It includes everything from your company name, logo, tag lines, advertisements, public relations, presence at trade shows, community involvement, reputation, and brand.
Rather than going into depth on each and every aspect of marketing, I am going to outline four main steps that any small business owner can follow to obtain big results.
Step One: Identify Your Ideal Customer
Your marketing strategies must be designed specifically for your business and target customers. The first step is to create a detailed profile of your ideal customer.
Identify as many demographic characteristics as you can about your ideal customer. How old are they? What gender are they? Are they married or single? What nationality are they? What kind of work do they do? How much money do they make? How do they spend their money? What products or services do they buy that compete with yours?
What are their values?
The more specifically you define your ideal customer, the easier it will be to create your marketing messages so they speak to their needs, desires, and concerns. Your messages must also clearly communicate the benefits your customers will receive. Be certain your marketing messages reveal the uniqueness of your products/services and what differentiates you from the competition.
Aim your marketing efforts to the location of your primary market. If your primary market is local, then broadly focused newspaper or radio advertising might not work. Instead, consider marketing neighborhood-by-neighborhood.
Step Two: Create Your Brand Identity
In today’s world of short attention spans, a great product or service is rarely enough to secure and maintain customers. A branding strategy includes your company’s name, logo, symbols, website, and social media tools. Your brand can position your small business with customers as one they trust enough to purchase the types of products and services they desire. Your brand can also differentiate your company from others providing the same products or services in your target market.
A strong brand is the foundation of an effective marketing program. However, branding is complex; involving the customer’s total experience with you, your product or your service. The internet, with its powerful new Social Media tools including LinkedIn, Facebook, Twitter, YouTube, and countless others, offer tremendous opportunities to promote your brand. There are also myriad ways to utilize low-cost search engine ads or interactive features on your website.
The best brands appeal to basic human emotions. Don’t be afraid to be original in identifying your brand identity. It is what sets your small business apart from all the others. If you are having trouble developing your branding message, ask your new customers why they bought from you and ask your repeat customers why they continue to buy from you. The answers you get provide excellent guidance on developing brand messages.
You want your brand to endure, so avoid language that is tied to trends which are likely to disappear or become outdated. Keep your banding message simple. Buyers are overwhelmed by information today. Too much information confuses your brand message.
Step Three: Develop Your Pricing Strategy
One of the first questions asked by most small business owners is “How much should I charge for my products or services?” This is not an easy question to answer. It depends on many factors including the quality of the product or service, the cost to provide it, customer location, the market rate for the industry, expected profit, and many others.
You can begin by researching your industry including price ranges in other parts of the country if you sell nationwide. Be sure to use timely and accurate information to calculate labor costs, supplies, and direct and indirect overhead for every product or service you offer. You should take into account seasonal fluctuations that might cause short-term increases. A word of caution here. Guessing at costs can end up costing far more than it will to invest an hour or two in research.
Pricing is as much of an art as it is a science. If you price too low it cuts into profits. Pricing too high can limit sales. A common mistake new business owners make is lowering their prices to attract customers. While low prices can attract customers, it may not always be the best strategy. Customers who buy based on price alone are the most likely to leave the minute they find a lower price.
A low price strategy is even more risky for service businesses. A service business is limited by the time it takes to deliver the service. It is difficult for a service business to make up losses from low pricing by increasing volume like retailers.
Pricing has a psychological component. Your pricing should reflect your product or service “brand.” If you want your brand to be “premium”, then your pricing should reflect that. That being said, for certain products or industries, there may be established price points. Make sure you know what these are.
Establishing pricing will be an ongoing and dynamic process. You will need to adapt to changing conditions. Factors such as competitor prices, costs, customer perceptions and profit expectations can have a dramatic impact on your pricing. And, you may want to test different pricing models to see what works best for your business.
Step Four: Relate to Your Prospects and Customers
While relating to your customers has always been important, it is becoming absolutely critical. Why? We are in the midst of one of the most remarkable evolutions in business since the industrial revolution. With the internet, traditional marketing vehicles including radio, television, direct mail, and telemarketing, expanded into email marketing, website banner ads and pop ups. Overwhelmed with the constant onslaught of advertising, consumers have become more and more irritated. In response, new products have been developed to give consumers the ability to skip television commercials and laws have been passed limiting Spam and telemarketing.
While many marketers are still trying to find a way to breakdown this resistance to advertising, consumer participation on social media sites is growing at a phenomenal rate in virtually every demographic category. What are consumers doing on these social media sites? They are having conversations with each other and company representatives about topics that are important to them. They are discussing, and sometimes, recommending products and services to each other. They are relating to each other.
What is happening is an evolution of old fashioned networking using new technology. So, whether it’s communicating with your customers through a visit, a phone call, a professional association, a local business group, a conference, a blog, a newsletter, a webcast, LinkedIn, Facebook, or Twitter, the most powerful marketing strategy you can employ is to relate to your prospects and customers.
When you focus on relating to your customers it gives you an opportunity to obtain valuable information you need to make sure you are offering the right products and services at the right price. You will also have an opportunity to obtain information you need about how customers perceive your brand and what changes you may need to make.
I can’t promise that these four steps will guarantee your small business will succeed. What I can guarantee is that these four steps will put you on the right path to success.
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Posted by: Mike Clough