Five Steps Small Businesses Can Take to Better Market Themselves

Yesterday I was asked if I could share five ideas of things businesses do wrong when marketing themselves.  That sounds so demotivating, so let's cast this as five steps a small business can take to step it up!  Same thing, perhaps, but a better tone.

#1.  Refocus on your target customer.  Too many businesses adopt a philosophy that they serve "everyone" or several different segments at the same time.  It's vital to decide what one, laser-focused segment is your true target and aim marketing messages to them.  If others buy, that's great, but they cannot be the place you spend time and money.  Let's face it: advertising of any kind is expensive and the highest return on every dollar spent will be the customers who are most likely to buy.

#2.  Take a good look at your messaging.   Do the messages you send when promoting, advertising and selling work together?  Can a customer make sense of what you offer?  Can someone clearly describe you, your products and services, and how you can help them?  Can they easily confuse you with a competitor?

#3.  Find that point of differentiation.  Most businesses operate in a highly competitive space where consumers find it difficult to understand how one provider differs from another.  Your messages are much sharper when you can find a way to stand out, positively, from other choices,  Don't make it about price.  Do you have a unique skill? use special raw materials? provide extra value?

#4. Engage with your customers.  Use tools like an email newsletter, blog, social media platform, and video to make your products and services so much more personal.  Create value added by sharing ideas and information, asking questions, and stirring up excitement with contests or special events.  People like to do business with people and every chance you have to engage boosts the chance someone else will refer business to you.

#5.  Be picky with social media.  There are (too) many social media platforms out there and I can absolutely guarantee that not all of them are appropriate for a given small business.  Too many small businesses spend huge amounts of time posting and interacting at too many sites.  How many do you currently use?  Weed out the non-performers and focus on the top three or four.

Bottom Line:  Every business can take its game up a notch.  Can you sharpen your focus, tighten your message, find ways to engage more actively, and stand out a little better?

Easy Ways to Calculate Cost of Acquisition

Let's say you are spending money on some form of advertising or promotion.  Are there ways to determine if it's pulling its weight?  Many small businesses employ "hunch" or "feel" in assessing their expenditures, or in a slightly more sophisticated vein comparing total receipts and sales to marketing costs and watching the trend.   Times of good revenues are assumed to relate to quality advertising and promotion; lean times would mean advertising didn't work.  It's crude, but at least it's a start.

The big dogs employ much more sophisticated metrics in an effort to assess what is called the Cost of Acquisition (COA).  In a nutshell, the dollar value associated with each new customer.  Ad and promotion strategies that have a high COA will (or should) be scrapped in favor of lower COA options.  Data from POS and registers (and others) are compared to cost figures and a fairly good picture can be drawn of the strength of various buys.  Small businesses can't hope to work in this space: the staffing, cost and time demands are too great.

But there is hope for a decent set of metrics.  The very easiest approach requires being assiduous in asking customers how they found you.  Ask at whatever stage they approach.  For a service provider that can be done at the point of initial contact.  For a retailer, at the point of sale.  A simple but highly effective spreadsheet can be built with each new customer recorded, their date of contact, their associated revenue, and the means by which they became aware of you.

Let's now say you want to see what a new ad is doing for you.  Filter for all customers who say that ad drew them to, and total up the revenue associated with those customers, and divide by the number of new customers.  The resulting dollar figure is good working COA.  Strategies where the advertising cost more per new customer than the revenue they bring in are probably unproductive.  But you will learn a lot from that calculation!  Done for all of your advertising and promotion you can begin to weed out the less helpful channels and make your marketing more efficient.