Archive for December, 2008

Small Business Marketing Competitor Alert

At a recent small business marketing workshop a question was asked – how many of the attendees kept a watchful eye on their competitors. Of the 40 small businesses attending 30 did not know much about their competitors and one of the main reasons was that they did not know how to gather the information.

As markets get more competitive, gaining insights into your competitors can help you:

  • More easily identify your point of difference
  • Develop strategies to exploit their weaknesses
  • Counteract their activities more effectively
  • Identify why they may be taking business from you
  • Defend your relationships with your current customers

 Easy ways to find out more about your competitors include:

Competitor Websites
If your competitors have websites see if you can register to obtain updates via their blogs or newsletters. Their website also enables you to gain a greater understanding of the key features and benefits of their products and services.

Internet Search Engines
Type in keywords that potential customers may use to find your business and see where your website ranks versus your competitors. Have a look at what pages are ranking well and set up News Alerts so that you can keep up to date with their activities.

Trade Associations
Find out if your competitors regularly advertise or contribute to industry magazines or appear to have a higher profile.

Shop Your Competitors
One of the best ways of gathering information on your competitors is to shop them. Shopping your competitors enables you to experience your competitor’s product as their customers would. This is a little more difficult for services but you can always make an enquiry.

Your Customers
Loyal customers will be able to tell you why they like doing business with you and what makes you better than your competitors. Customers who have left can give you information on what attracted them to your competitors and what if anything can get them to return to you.

Advertising and Promotional Activity
It is a good idea to set up and maintain a competitor file which keeps track of all your competitors’ promotional and advertising activities. It is important to analyse your competitors advertising message and what they are communicating to the customer.

Keeping up to date with your competitor’s products, services and marketing activities just makes life easier. Instead of being surprised about what they do, you can be one step ahead of them especially in the race to attract and retain key customers.

This is the last post for 2008, commencing again on Monday 5th January, 2009 and I wish you all a safe, healthy and happy festive season. If there are any topics you would like to see covered in 2009, please contact me.

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December 18, 2008 at 7:00 pm Leave a comment

Marketing Tactics can be Damaging

It seems that many countries are providing money to companies to reinvigorate the economies and keep people in jobs.

Some households are being given money and actively encouraged to spend, spend, spend over Christmas, but what happens when the money is gone, bills are still to be paid but the economies decline further and more people lose their jobs?

On the surface they sound like they will help but the question to be asked is – are these tactics actually a part of a strategy (overall game plan) that will actually achieve the desired objectives?

If they are not part of an overall strategy then they may prove to do more harm than good in the year ahead.

If you apply this to small business there seems to be a new marketing tactic promoted everyday that sounds great and guarantees lots of revenue. However, these marketing tactics are not often explained in the context of customer objectives and how they support a marketing strategy.

By implementing marketing tactics without a marketing strategy you may waste valuable time and money and not achieve the sales you want.

Here are marketing tips you may like to consider:

  1. Have a marketing plan that includes a well thought out marketing strategy that is designed to achieve the marketing objectives. Selecting the tactics is then a lot easier.
  2. When considering a new marketing tactic to implement just take a few moments and see if it supports the marketing strategy
  3. Consider the marketing tactics from the perspective of what the added value there is for your current and potential customers
  4. Do the sums to see what the likely results and costs (including time) are before implementing marketing tactic

Do you have marketing tips you would like to share?

PS. Australians are known to place a bet on just about everything and in today’s papers it was reported that betting shops are offering $5.50 on Australia avoiding a recession and $1.12 for the country falling into recession!

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December 17, 2008 at 7:00 pm Leave a comment

Customer Perception – Beware of What You Say

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In Australia’s media this morning it was announced that Telstra (our biggest telecommunications company) was being excluded from a tender process for a major infrastructure project for a national broadband network.

The stated reason for excluding them was that they failed to meet one of the basic requirements – the document did not include a plan on how small businesses would participate in the project. The response from the company was that this was a “trivial” reason for the rejection.

If someone did not read the whole article and just picked up the headlines and the words ‘trivial and small business”  they could perhaps have the perception that small businesses are not important and therefore of less value to the company. I am not suggesting in reality this is the case.

For those small business customers that did skim the media reports how will they feel about continuing being a customer? What would potential customers think about the importance of their business to this company?

Marketing reminders from this are:

  • Customer perception is their reality
  • Once words are spoken eg. in a sales call they can’t be taken back
  • Customers do not listen to or read everything we say or give them
  • Words and tone of voice can convey different meanings for current and potential customers, business partners, employees etc
  • As the world gets smaller what we say can spread very quickly eg. a comment on a blog or in a forum can been seen and read by many people around the world within moments
  • If you are sending out PR releases or being interviewed be conscious of the content for both your current and potential customers

As we do not have a business without customers, today’s news reports were a reminder to me of being aware of what is said and customers’ perception of our communication.

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December 16, 2008 at 7:00 pm 5 comments

Who are Your Most Valuable Customers?

Identifying which customers represent the greatest value to your business helps you develop an effective marketing plan and put in place the marketing strategies and marketing tactics to:

  • Retain your most valuable customers and keep them loyal
  • Attract customers who have the same or similar characteristics to your most valuable customers
  • Increase customer ratings on the characteristics most important for your business’s success

Key characteristics to look at when identifying your key customers are:

Average Transaction Value
This is the average value of transactions over a year. You first need to work out the average for your business eg. on average your customers may spend $100 per transaction. Then you look at each key customer and see if they are spending more or less than $100 per transaction with your business. Overall your objective should be to increase your total average transaction value each year.

Loyalty
How loyal is the customer or customer group to your business? Look at how long they have been a customer and also would it be easy for them to switch to a competitor.

Discounts
Look at how often you need to discount your product or service price with your customers to attain a sale. Ideally you shouldn’t need to discount to gain sales from your key customers as this affects the profitability of your small business.

Strategic Value
This relates to how important this customer or customer group is to the future of your small business eg. do they provide a number of referrals, but maybe not spend a lot of money with you? Are they opinion leaders in your market?

Increased Business
Look at whether your customers are increasing their business with you each year, such as buying additional products or increasing the frequency of their purchases of your products or services.

Debtors
This relates to how reliable your customers are with regard to their payments eg. do they pay on time? This is important as it affects your cashflow and also ties up money that you could be reinvesting in marketing your small business.

Service Costs
This relates to the service costs involved in gaining a sale or after a sale to ensure customer satisfaction. Ideally you would want minimal service costs for your small business whilst still maintaining a high level of customer satisfaction.

Gross Margin
This relates to the sales price of your product or service less the costs involved in producing the product or service for the customer. For example, if you provide a service but it takes you twice as long to provide the service for a particular customer then this customer will be of lesser value to your business.

Do you have any tips to identify your most valuable customers?

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December 10, 2008 at 7:00 pm Leave a comment

Small Business Marketing Tips – New Year Resolutions

I thought I would get started early.

As an optimist I like to think in terms of what improvements can be made or new ideas that can be launched to grow our business and keep attracting and retaining key customers.

You can use the following as a basis of a chart and then tick either improvement or new and start putting ideas down in the actions to be taken. If you have employees, family or business partners, get them involved as it may make it easier for you.

You do not have to tick all the areas just the ones that are important to your business and customers.

                                                                                                                                                                                                                       Improve         New              Action

Customer service

The products you sell (list products)                 

The services you provide (list services)                            

Pricing                   

Distribution methods                    

Website                           

Marketing materials                     

Service delivery                          

Communication (message)                      

Communication (media)                          

Social media (list the ones you are involved with)                    

This is not to replace a marketing plan, but it may help you if you haven’t started or completed your plan for next year.

Do you have any other areas of your marketing that should be included in the table?
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December 9, 2008 at 10:00 pm Leave a comment

Simple Marketing Tips to Retain and Attract Customers

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There have been a lot of small business marketing articles in the media about paying attention to  your key customers to survive these tough times.

Reading one article recently in a major newspaper actually made me think that there were real opportunities for small businesses.

The article was an interview with a small business giving tips to survive the tough times. The business owner was quoted as saying  they were going to now focus on their larger clients to make sure their business continues to grow. Sounds okay, however it should be noted that this business also has micro and other small businesses as customers.

I read this as meaning if I was a small client of this company then I could not expect any attention whilst the economy is in trouble. I could be wrong in my interpretation but that was my perception. It also struck me as not being proactive as they were perhaps thinking only what revenue each smaller business could bring in separately.

Here is an example where small businesses have retained their customers and attracted more customers leading to higher revenues and not increasing their costs.

Personal Trainers
Initially their business focused one-on-one training with their customers. However a few years ago, you started seeing Personal Trainers promoting group training as an additional service or as an alternative for those who could no longer afford the one-on one training. This new service increased their revenues and below is an example:

1 hour one-one-one training – $100
1 hour group training              – $400 (based on 10 people paying $40 each)

This type of service  is now quite standard and means the customer who could no longer afford one-on-one training could still feel valued and receive fitness training and the attention of a Personal Trainer. For Personal Trainers they could retain their smaller customers and grow their business at the same time.

Whilst this concept will not apply to all small businesses, perhaps it is worth looking at the services you provide your customers and see if there opportunities for group activities.

 Do you have any other examples that you can share to help other small business retain and attract more customers at the same time?

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December 8, 2008 at 5:00 pm Leave a comment

Market Seasonality Insights

Although it is more fun putting your marketing plans into action, it is important to conduct some analysis before you start spending your time or money. In a previous post I called this the Treasure Hunt (posted under Marketing Plan) as you are looking for information to help your business become more successful.

One of the areas to analyse is market seasonality. If a product or service is seasonal it means the majority of sales occur at one or a few times of the year. For example, the sunscreen market is affected by the weather and the seasons. The majority of sales occur during summer and/or when the weather is dry and sunny.

The demand for a product or service may depend on:

  • Occasions – Christmas, Easter, Australia Day, Mothers Day, Valentine’s Day, School holidays Weather – rain, sunshine, snow,
  • Days – a particular day or month that has a positive or negative impact on sales eg. Saturday extended trading
  • Seasons – autumn, winter, spring and summer
  • Business conditions – end of financial year, end of calendar year, tax returns 

Why Is It Important?

  • Take advantage of opportunities within your market by concentrating your marketing and sales tactics at times when they will have the greatest impact
  • Look for opportunities to lessen the impact of seasonality by spreading your product or service sales throughout the year
  • Enables you to better forecast your production, inventory and employee needs and therefore manage your cash flow more effectively

 Tips

  • Look at your customers’ needs and how they depend on certain factors
  • Analyse your own sales and determine which months or days of the week you experience sales peaks
  • Determine if the seasonality for your market is long term or due to an unusual occurrence eg. special event
  • Seasonality may also be affected by geography or location. For example, if you sell ice creams your sales will be less seasonal in cities with warmer weather
  • Determine if you and/or your competitors may be causing the seasonality due to history eg. promoting and selling premium chocolates only on Valentine’s Day

 What are your tips for analysing a seasonal market?

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December 5, 2008 at 10:00 pm Leave a comment

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Susan

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