Marketing Your Business
A Jargon-Free, Practical Guide to Survival
by Terry Gordon
Terry Gordon started his career in the
Marketing and Advertising Industry, before deciding to
move into training and consultancy. Much of his work
over the years has been concerned with helping small and
medium-sized businesses. He has worked in further and
higher education as a head of department and also
lectures in business related topics at one of the UK’s
leading management training centres.
You are running your own business. You've set up a system for keeping accounts. You know about income tax and self-assessment. You have the leaflets on National Insurance. You're registered for VAT. In fact, you've done just about everything to make sure the business runs smoothly.
So what's all this fuss about Marketing?
Well, put simply, everything you have done so far will get your business to day one and help it to run efficiently - but only effective Marketing will ensure that it survives!
Of course things like a good accounting system are essential, but they will they not sell your products or services. To survive, you must satisfy the needs of your customers and you need to make a profit. These are the key factors that are addressed by Marketing.
To Market you business effectively, there are seven key areas you need to consider. Think of them as your 'Marketing Tool Kit'. Sometimes called the seven Ps, they are; Product, Price, Place, Promotion, People, Processes and Physical Evidence. Like all tools, they need to be regularly checked and sharpened to keep them, and your business, in good working order. So let's consider them one by one.
Getting Your Product Right
Many small businesses make the mistake of assuming that because they have the skills to provide a product or service, there will automatically be a market for it. Sometimes this turns out to be true, but remember that between 50% and 75% of small businesses do not survive beyond the first year.
The first thing you need to do is establish that there are enough customers out there to sustain you. Who are your customers? Where are they? How many are there? Do they want what you have to offer? Do you have any competitors?
Answering questions like these will help you to assess whether there is a viable market.
Then you need to get the product right. The mistake is in trying to "sell what you can do", rather than "doing what you can sell". A much more successful strategy is to start with a core product or service idea which you can then modify into something that your customers actually 'need'.
You can do this by asking other people what they think of your idea, listening to your customers, or even by watching what successful competitors are doing. It also helps if you can come up with a slightly different 'angle' that makes your business stand out from the competition - for example, faster delivery, better quality, longer guarantees, etc.
You may also need to provide a range of products aimed at different groups of customers. For example, 'TG Interiors' offers a basic 'Painting and Decorating' service to the majority of its customers, but provides a complete 'Interior Design' service (at a vastly different price) to wealthier customers. 'Megacars' main business is taxis, but they also provide limousines, wedding cars, etc. - and, just to be slightly different, they even offer female taxi customers the option of a female driver (it's the little things that count!). Both firms advertise in several different sections of Yellow Pages. In other words 'different products for different customers'.
If possible, you can even customise your product or service to suit the needs of individual customers. The more flexible you can be, the more chance there is that they will come back to you in the future.
Also remember that customer needs change over time, so your 'product', must change with them. For example, think of the difference between the services offered by an Electrical Repair Business before the days of CDs, DVD, Digital Video, etc., compared to what the customer expects from them now.
Charging the Right Price
The most obvious strategy here is to charge about the same, or slightly less, than your competitors. However, before you do this, you should first of all work out what it costs you to provide the product or service and then add on a reasonable profit margin. If this turns out to be way above competitive prices, you need to have a major rethink. If you continually sell at a loss, just to keep a competitive edge, you will not survive.
For example, I recently agreed a price to a client for a design project, based on the number of hours work, use of consumables, etc. However, because I had misread the complexity of the job, I ended up spending 4 times as long as intended, was on the phone/internet at peak rates for hours and went through reams of expensive photo-quality printing paper. Needless to say, the project wasn't as profitable as I had originally hoped.
Depending on the type of business you run, you sometimes need to make it very clear to a customer what the 'price' includes and that there may be extra charges for extra work.
You also need to make sure that you take account of all the costs you incur, so if you are working from home, this will include a proportion of your electricity, heating, telephone bills, etc. And don't forget to include the biggest cost of all - your own time.
There is nothing wrong with charging a slightly lower price as a way of breaking into a market, but remember that this is a short-term strategy. Once you become established, you can start to charge at least the same as everybody else.
Alternatively, if your product or service is unique, better than competitors, or technically superior, don't be afraid to charge more than they do. People genuinely believe that you get what you pay for and won't mind paying extra for a better product. For example, 'AB Electronics' (who employ 5 people) design customised electronic circuit boards for manufacturing firms. They are competing with household name companies, hundreds of times bigger than they are. The difference is that the larger firms take about 16 weeks to deliver, whereas 'AB Electronics' guarantee design and installation within 14 days. They also charge nearly twice as much, but their customers are more than willing to pay.
Being in the Right Place at the Right Time
'Place' is generally about how you distribute your product or service to your customer. For many businesses that can be a simple question of 'location'. For example, people expect certain types of businesses, like Estate Agents, Banks, Boutiques, etc. to be in certain places. Make sure that the location of your business makes it convenient for the customer to get to you.
Place is also concerned with delivery. The golden rule is that, where possible, you should deliver at a time and place that suits the customer, rather than you. Delivery times are crucial to many customers and it is better to negotiate a realistic time scale with a client, than to promise a deadline you can't meet. This could lose you business and will also damage your reputation.
A final aspect of 'Place' is your hours of business. Are your times and days of opening convenient for your customers? Or do they just happen to suit you? For example, look how supermarkets, banks, estate agents and pubs have responded to changes in customer buying patterns.
With technology such as telephone messaging, fax, e-mail and the Internet, it is possible for any business to be at least 'contactable' 24 hours a day.
Promoting Your Business
Promotion is about the various methods you can use to communicate with customers. The most obvious method is 'Advertising', but you can also communicate through 'Publicity' (getting your company mentioned 'free' in newspapers, local radio news, etc.), 'Personal Selling' (where you actually see the customer and sell face-to-face) and 'Sales Promotion' (using special offers, discounts, competitions, etc. to attract customers).
With Advertising, the key questions to ask yourself before you make any decisions are:
What is the objective of the advert?
For example - to create awareness, to announce something, to give specific details, etc. A clear objective will help enormously in advertising effectively.
Who are you trying to reach?
The more precisely you define your 'audience', the easier it will be to choose the best way to reach them. For example, 'Megacars' have different customers for their taxi business, their limousine business and their weddings business. 'TG Interiors' have different customers for Painting and Decorating and Interior Design and, during the winter, they even target Hotels and Guest Houses!
What is the most effective way of reaching your customers?
This will obviously depend on who they are, but you need to be very careful in choosing the right method. For example, 'Megacars' considered advertising their taxi service in local newspapers - but who looks in the newspaper for a taxi? Hence, their decision to advertise in Yellow Pages. However, they do advertise their wedding cars in the 'weddings' section of the local newspaper. 'TG Interiors' use local newspapers for Painting and Decorating, inserts in local papers delivered to specific areas for Interior Design and mainsheets followed up with personal visits for Hotels and Guest Houses. They also advertise all three services in Yellow Pages and local directories.
You need to ask the same questions about your customers. A useful way of doing this is to ask yourself: 'If I was a customer, looking for a business like mine, where would I expect to see it advertised'?
What will you say to them?
This will be closely linked to your objective, but avoid the tendency to try to say everything there is to say in one advert. Also remember that the message will need to be tailored to what each customer group wants to hear.
You must also tailor the message to the medium. For example, you can say a lot more in a newspaper advert than you can in a telephone directory and with a medium like local radio or posters, the message needs to be short and simple.
For many small businesses the 'People' element may be just one person or a small team of employees. The important thing is that, to the customer, the business is just as much about the people as it is about the product. It is about how everyone in the business treats the customer. As the owner, you probably already realise how important this is - the key is to make sure that everybody else in the business does. Remember, it only takes someone answering the phone in a bad mood or a receptionist with 'attitude' to lose you a customer.
Process - How Was it for You?
If you've ever had to queue for hours to be seen, fill in a form that was incomprehensible, jump up and down to get someone to notice you, or been passed from one extension to another on the phone - then you'll know what we mean by 'process'.
Customers respond well to business processes that are user-friendly and efficient and they like to be kept informed about what is going on. Ask yourself how you like to be treated? For example, waiting for your car to be serviced, you don't mind a delay if someone explains the situation and keeps you updated. It's when nobody tells you anything that you get annoyed.
Last, but not least, is how your business appears to the outside world; the'physical evidence' of who and what you are. For many businesses this could be anything from the state of your reception area right down to the way you dress. However, even for an on-line business, with no 'physical' customer contact it is still a key consideration.
For example, if you have a Web site, what does it look like? Think of it as your 'shop front'. Would potential customers find it appealing? Does it look and 'feel' professional? Is it user-friendly? How does it compare to Web sites for similar businesses?
Do your e-mails and other electronic documents reflect a business style? Do they have a letterhead or logo? Is there a distinctive and professional layout and style, that makes you stand out? Do you respond quickly to requests for information? And when you do, do you answer the question or tell them what you want them to hear?
These are areas that you need to consider carefully, because just as in a 'physical' High Street, people go window-shopping on the net. And if they don't like what they see, they will take their custom elsewhere.
So there you have it. Seven basic tools that will help your business to survive. They need to be at the forefront of your mind in all your dealings with customers and you need to monitor them at regular intervals. You may even find it useful to print them in large type permanently in view above your desk. The reward comes when you get that first customer through the door who tells you why they came to your business and not someone else's.
(Note: The names of businesses used as examples in this article are entirely fictitious and any similarity to the activities of any real business are purely coincidental).
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