Charity Marketing

One of the businesses I recently consulted told me that part of their marketing plan included what I can only describe as "charity" spending: specifically, sponsorship of a softball team.  What was agonizing for the business was that members and families of the team didn't patronize the business.  They were left hoping that other people might see the sponsorship and become patrons. Unfortunately, that's very wishful thinking.

There are plenty of other forms of charity marketing.  Other examples include advertising in school yearbooks, ads in community theater playbills, event sponsorships, and auction donations.  Such promotional spending simply doesn't build customer activity.  It's not well targeted and there are relatively few people looking at the business name or message.

If you identify with the charity or requesting organization and want to provide those sponsorship dollars, that's fine.  There is always something to be said for goodwill and community involvement.  But understand that at best you're supporting your brand and making a friend or two.  These forms of promotion are not helping you attract customers, clients or patrons.  If you do this, set a budget and stick to it.  Spend your real marketing dollars on more productive strategies.

Dinosaurs: Advertising in Newspapers

There was a time when a business would frequently, reflexively, and even automatically advertise in a newspaper.  Most newspapers got their start two or so centuries ago as vehicles for commercial notices -- before the "news" and "opinion" matter got going.  But in the 21st century, I'm convinced that newsprint and small business are incompatible.  I can say this as an old newspaper guy, one who saw the practical consequences to advertisers.

First, newspapers are broad-spectrum tools by nature, and there's no real way to target one's ads.  And believe me, placement of an ad is not going to happen---the newspaper picks the page.  And it may be a poor position!  Second, ads get lost.  The small business ads are almost always lumped together in one place, making it a chore to differentiate -- something harder to do when one has one color (black) to work with.  And third, readership has declined significantly in the past three decades, a trend that is accelerating.  I'm of the view that newspapers are essentially in the same position as a yellow pages for a small business.  Finally, ads only work at all if they are repeated in the same position, a very expensive proposition indeed.

When crafting your marketing plan, I recommend leaving newsprint out.  There are more effective ways to spend your limited marketing dollars.

Discounting: Proceed With Caution

One of the most vexing decisions a small business faces is whether to inject discounting into its marketing plan.  Discounts and coupons can attract new customers, and who doesn't like to obtain something at a lower price?  Estimates are that nearly nine in ten shoppers use coupons. Unfortunately discounting can have a terrible downside.  Businesses that coupon generously can easily be locked into a discounting expectation.  Consumers learn quickly that they can wait for coupons and that a business is always "on a sale".  And even regulars can back off to cheaper products when they might well have paid the asking price.  Major retailers like JCPenney have learned to their horror that they have discounted themselves into a corner.

I wouldn't discourage a small business from offering coupons.  The tool is powerful.  What I would advise is to offer coupons carefully.  Do not offer deals frequently, nor on cyclic dates (such as every holiday or every June 1st, say)  Don't give prospects or customers a sense that they can wait for a lower price.  You may want to tie the coupon to a "buy one, get X" deal as opposed to offering a flat "X percent off."  Tie coupons to new products and services to inspire trying out the new offering, but beware overdoing it with existing lines.  Always think hard about the need to discount: is it done to make up for a marketing shortfall elsewhere?

Coupons can be your friend when used with care.

QR Codes Make Sense

As a collector of business cards, flyers and the like, I am struck by the infrequency of little things that can improve the connection between a business and consumer.  Take the QR code, for example.  Too many small businesses don't use them, and yet with so many consumers out there who view the world through a mobile device, the opportunity may be lost to make a connection.  Let's face it, no one types in web addresses unless they're especially motivated.  And even fewer will search for what they remember of a web address or business name.  While statistics are divided on whether consumers are more or less moved to make a purchase after scanning a QR code, the long and short of it is that they don't cost very much to use and a doorway is closed if the code isn't there.  Consider adding a QR to an ad, or a business card, or brochure, or whatever you use.  The results could surprise you.

Think About the Target Customer

As I have spoken and consulted with business owners, I find that a widespread challenge is identifying the target customer.  So much of a marketing plan hinges on knowing who one's target customer is, yet surprisingly few have a handle on such a basic element.  Good business plans include a discussion of the target, but even there many business plans cast the net too widely.

Some of the big mistakes?  Target customers are not "everyone who lives within x miles", or "everyone who likes gyros", or worse, some variation of "people who like live music, or who like a quiet place to enjoy continental cuisine, or who need someplace to take the kids".  We business owners get into trouble when we don't focus.  It may be that our clientele includes some very different people, but our target must be rather more narrow.  We only have limited marketing resources: we need to strike for those who are the best prospects.  Be brave!

There is no time like the present to step back and clearly envision your true target customer.  Ask yourself what types of people are best served by your business?  who is best represented among your customer base? what do your most profitable 20% look like?  Ask for insights from your mentors and trustworthy observers.  Do some simple market research.  If you are still a little too fuzzy, keep asking questions.

Once you identify the true target customer, your marketing plan will be more productive and you will have more direction on how to serve your public.  Clarity is such a blessing!

So who is your target customer?

Direct Mail as a TOMA Tool

In my last post I pointed out how direct mail is increasingly a fine option for a small business getting noticed in special situations, such as the roll out of new products and services, or as a thank you to your best customers.

Small business owners should also look at direct mail as one of the techniques that can really help drive TOMA (Top of Mind Awareness).  Here's how.  Realistically direct mail will not be a fantastic sales tool.  Long experience shows us that direct mail has a LOW <1% return on a particular asking.  That's wonderful if you have a big list and a decent postage budget.  But if you look at direct mail in a slightly different way, you can beef up your longer-term ROI.  Direct mail's tangible nature (i.e. unlike email you can physically hold the document) gives it a fighting chance to be held, displayed or filed by a customer.  And that suggests adding some useful aspect to the direct mail piece that keeps it visible to your prospect or customer, or to someone they can refer.  Can you add a useful fact? a calendar? an announcement?  there are many possibilities. Always seek to add something that the person can use in their own lives.  And your logo will not be far away...

Regular direct mail can serve as that repeat reminder you are out there to help them.  One mailing roughly every quarter could greatly enhance your TOMA.

Direct Mail is Coming Back

Is direct mail dead as a marketing tool?  We like to think that direct mail was consigned to the rubbish heap in the Tsunami of "junk mail", but as many major marketers shifted attention to email, social media and other techniques, there's less mail to compete with.  It is possible to grab attention with old-fashioned methods.

Statistics I've seen suggest that direct mail is most noticed by the youngest consumers and that most people prefer mail to other advertising techniques.  And calculations show impressive return on investment for this media these days.  We can't not afford to consider direct mail as part of our mix.  But in so doing, keep your mind on some important details.

* Personalization is critical.  Find ways to personalize where possible.  Perhaps use handwritten notes to your very best customers.  Jot a quick note on each letter.  And send only certain people specific appeals customized to their needs.

* Use direct mail sparingly.  Direct mail is great for newsletters and for special promotions.  You just don't want to mail heavily and regularly if you want your material noticed.

* Brand the envelopes!  Use your logo and color if possible.  Even a specially produced return address label can make a big difference.

Think about a direct mail application this year.  Are you planning to roll out a new product or service?  Can you use mail to thank your best customers?  How about a newsletter that gives customers some value added?  Direct mail can be your new best friend!