Marketing your business – learn from other people’s mistakes!
The number 1 mistake people make is talking about themselves and their product rather than talking about their customer, but that’s an article in itself. So these are seven common mistakes that I see companies making (in no particular order of severity, just how they occurred to me!) These mistakes are more strategic than tactical, because the number of practical mistakes in marketing would be a much longer article, but the conceptual flaws here often underlie a lot of the obvious mis-steps that I see businesses making.
1. Don’t mistake ‘Promotion’ for ‘Marketing’
A lot of the time when businesses talk about “marketing themselves”, they actually mean “promoting themselves” – i.e. trying to tell potential customers about their products or services. Marketing is about more than who can shout the loudest, it’s about making sure that what you’re shouting about is actually what people are interested in (and therefore possibly willing to part with their cash for!) Promotion is just one part of the “4 P’s” marketing theory, along with Product, Place and Price (and many marketers add a fifth, overarching “P” for People). http://www.shell-livewire.org/home/business-library/marketing-and-promotion/marketing-planning/marketing-mix-4ps/
Before a company can successfully market a product or service, they have to make sure that all of the other elements are right for their potential customers. If they can do that, promoting themselves is much easier, but if they get any of the other elements wrong then money spent on promotion can easily be wasted.
It’s very common for a business to put an advert out, in the local press for example, spending a significant part or all of their marketing budget, and seeing little or nothing in the way of return. This means one of two things: either they chose the wrong promotional channel (“the paper is rubbish, I never get anything from it”), which they wouldn’t have done if they’d properly understood their target audience, or they didn’t properly work through the 4 P’s before they placed the advert. A company could place a brilliantly conceived and designed advert in a widely read magazine, designed by a talented artist and with wonderful copy from a professional writer, but if their price is way more than anyone is prepared to pay, the advert is wasted. Whatever the promotional channel, this concept applies – get your message right before you start telling people about it! Which leads us to:
2. Don’t underestimate the amount of noise out there
Even if you get your message exactly spot on, your potential customers are being so bombarded with promotional material that the likelihood of them playing attention to you is pretty low. Just think about the number of companies who are trying to promote themselves to you every day – adverts on TV, in the press, in your magazines, on the radio, on facebook and google and on loads of other websites you visit, companies trying to reach you through twitter, snapchat, Instagram, billboards on the side of the road, shops displaying offers in their windows, emails in your inbox! It’s a hurricane of noise over which it’s very difficult for a small business to be heard. This article in the Guardian talks about how it was 10 years ago, and arguably it’s only got worse since. http://www.theguardian.com/media/2005/nov/19/advertising.marketingandpr
For a business to have any hope at all of getting a customer’s attention, they have to work extremely hard, and they have to keep working. But more than that, they have to be different. And if you have to choose between being the best and being different, arguably being different is better, because if you can’t get people to pay attention to you, you can’t get them to buy from you, so they’ll never know how good you are! It’s not enough to put a few tweets out and write a story for your website, you have to be more interesting, more challenging, more active than your competition. For some inspiration, check out http://www.creativeguerrillamarketing.com/guerrilla-marketing/50-guerrilla-marketing-tactics-you-should-be-using/. I can’t stress enough how much energy you have to put in to marketing.
3. Your marketing is never “done”
As we’ve already seen, marketing is about more than telling people about your products and services, it’s about understanding your customers and making sure that you give them what they need, so until you run out of potential customers you’re going to need to think about marketing! However, there can sometimes be a tendency with promotional activity to do a bit, then stop, then wonder why there’s a drop in sales. There are two facets to this. The first is plain laziness & complacency. There are a number of businesses that I’ve worked to produce a marketing plan and who see an upturn in business because of the promotional activity we support. They decide not to use us regularly (which is fine!) but then I’ll get a call 12 months later for some more support (which is great!). When we meet again, they will tell me how enquiries have dried up, how the recession is killing their business and the marketplace is dead, how people just aren’t buying, and when I ask what they’ve been doing to promote themselves the answer is always the same: nothing. Often they are literally sitting in the office waiting for the phone to ring (and in one memorable occasion they were waiting for the phone to ring despite their number being out of date on their website and all their marketing materials). We do some work to re-energise them, or they pay us to do the work directly, and unsurprisingly the enquiries start to roll in again. The basic message to these types of businesses is get off your arse, get out there and start telling people what you do. Any time you spend sitting in the office waiting for people to call is wasted, and it’s basically down to laziness.
Luckily, that laziness is relatively uncommon, but the second, related facet is more common, and it’s the somewhat natural tendency to lose focus on marketing and promotion as you get busier. It can be time consuming for a small business to sort a website, send some emails, maybe do some flyers, sales letters, or cold calling, start doing a little bit on social media or pay someone to run some ads for your business, and often all of this will be done by the owner or office staff who might not have any real understanding of marketing. If their promotional efforts generate some enquires, then, it’s understandable that they might start focussing on their “real” job – actually delivering their product or service. Time and time again I see businesses get really busy and immediately start to neglect their marketing, and time and time again those businesses eventually run out of new enquiries. If they are smart or lucky, they will have enough momentum to start promoting themselves again and bring in another new set of enquiries, but I’ve seen businesses fail because of this “feast or famine” cycle. It’s a truism, but the best time for marketing activity is when you’re already busy – that means building time for marketing into your business, rather than trying to do it on top of everything else.
4. Don’t forget that time has a cost
A real reason for small businesses struggling to spend enough time on marketing as they grow is that they forget that time has a cost. Often in smaller companies responsibility for marketing falls on the owner or director – often the same person who’s responsible for everything else as well, including actually doing the work! When the level of work is low, that’s okay, because any time spent on marketing is valuable, but the mistake comes when that time is not accounted for in pricing. If the business owner has to spend three hours networking to get a sale, then the profit in that sale has to cover the cost of those three hours. If it doesn’t then when the company gets busy, the owner has to do the three hours on top of everything else, they can’t afford to pay somebody else to do it for them. This is unbelievably common, and it’s probably the main reason that entrepreneurs start to get that crazy, over-busy, slightly wild look in their eyes. Luckily, it’s an easy one to solve. Work out how much per hour the time of the person doing your marketing is worth, and keep track of it. Add it to your physical marketing spend (on websites, design, printing, adverts, consultancy) and you’ll know how much it costs you to generate each sale, on average. If you then know how much an average sale generates, you’ve got the key data available that allows businesses to grow – it’s probably the most effective single thing you can do as a result of reading this article.
5. Don’t forget to improve conversion rates
The second most effective is to start paying just as much attention to the number of sales you make as the number of enquiries you generate. We see a lot of clients who have an overwhelming desire to get more leads, and their mantra is “more google ads, more website visits, more social media posts, more networking and exhibitions” – in short, they are always looking to out more in to the top of their sales funnel, in the expectation that they will get more sales at the end. This is on the whole true, but if your conversion rate isn’t good, then you can expend a huge amount more effort to see a small increase in sales. We can see this with a simple example:
Company A sells 10 gadgets each week. To sell those 10, they need to attract 1000 visitors to their website – 5% of visitors make an enquiry (so 50 enquiries), and 20% of enquiries turn in to sales, so 10 sales. To double their sales, the company needs to double their website visitors, so we somehow have to find another 1000 people each week. However, if the company can improve their two conversion rates, they can hit that target without any new visitors! A 50% improvement in the number of visitors who make an enquiry would give 75 enquiries per week, and if they combine that a 50% improvement in how many of those enquiries turn in to sales (so 30% of enquires buy, instead of 20%), they would sell 22.5 gadgets per week – more than doubling their previous sales!
This is a simplistic example, and it makes light of the hard work that would need to go in to improving those conversion rates. But often that work on improving the sales funnel (through better marketing processes) is way, way cheaper than trying to reach more and more potential customers.
6. Don’t choose a promotional channel “because everyone is doing it” and 7. Make sure that you are marketing today (and tomorrow) – not for yesterday
The final two mistakes are very different but share the same root causes. It’s increasingly hard to know where marketing budget is best spent, and everyone has an opinion. I’ve lost count of the number of times I’ve heard “you’ve got to be on Twitter because it’s the best way to promote your business!” Well here’s the truth – it isn’t and you don’t. For some businesses it’s great, for some it’s terrible, and the only business you should care about is yours. Replace ‘Twitter’ with ‘Facebook / Linkedin / Myspace / Snapchat / Adwords / the Wirral Globe website / beer mats down the pub’ and you’ve got a substantial portion of all the well-meaning but pretty hapless marketing advice from the last four or five years (well, maybe not the last two so much!). Choosing a marketing channel because everyone else seems to be doing it is the worst way to set your marketing strategy. Were you choose to promote yourself should be based on your customers, your products, and your budget. Everyone else’s opinion is irrelevant, and the only reason people listen to it and then spend time and money chasing down marketing dead-ends is a fear of missing out on opportunities.
That’s not to say that some of these opportunities aren’t right for you though – there are more options available than ever before, and it’s an exciting time in marketing for those business who ‘get it’. However, the other side of the same fear coin is sticking with old, ineffective marketing activities because they’ve always worked in the past. Local paper ads are the prime example of this, and I see companies spending tens of thousands on largely ineffective ads because they’ve done it that way for twenty years. Again, that’s not to say that local papers can’t be a valuable tool, for the right product and at a reasonable cost, but it is pretty clear that it’s not as effective as it once was, and wishing for the ‘glory days’ of the Yellow Pages, and business name starting with AAA, and some nice classified ads isn’t going to bring them back! The worst example of this I’ve seen is a retail business who primarily sold via newspaper ads, who had shrunk from a turnover of £10m+ in the late 1990’s to under £1m today. They didn’t have a website, because the owner thought it was a waste of money. He couldn’t understand why his business had shrunk!
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