Market Exposed

Marketing Tricks for the Frugal Budget

Small start-up businesses don’t usually have the resources to launch huge advertising blitzes in multiple media formats. In fact, even if you are already in business, chances are you don’t have an extensive cash allocation earmarked for promotion, or you’ve tried many different advertising approaches and vehicles and haven’t hit on a really successful campaign yet. You aren’t alone!
Advertising is extremely expensive. Despite adequate funding, even large national companies often find it difficult to develop successful advertising campaigns. And, with an increasing number of companies advertising through every imaginable communication avenue, it is becoming increasingly hard to attract the attention of consumers.
However, there are non-advertising approaches to promotion. They generally require less money to implement and are often more effective. The only catch is that they require time and creativity to develop.

Coupons

You don’t have to distribute coupons in print advertising or in big direct mail campaigns. You can hand them out on the street corner, at trade shows, or just about anyplace else. You can send a few to your best customers, or you can include “next purchase” coupons in customer orders.
Coupons can be “quick and dirty” to design and print because their selling point is price, not image. To assure your chances of getting an additional sale or establishing an ongoing relationship with your customers, make your coupon offer exceedingly generous.

Contests

People love contests. They even love to see other people win! Just witness the phenomenal success of game shows on television. If you choose to develop a promotional contest, in-fuse it with fun, make it silly, and don’t forget to really talk it up. If your contest is wacky and crazy enough, you should be able to get good media coverage—and remember, this is essentially free advertising!

Gifts

People love to receive something for free, even if they have to pay a premium price for a more expensive item to get the freebie. Don’t ask why! It may not make sense, but it doesn’t have to, as long as you make money. While this technique has been used most successfully in the beauty and cosmetics industry, it can be used in almost any business endeavor. It isn’t unheard of to see deals such as a free computer desktop with the purchase of a higher-priced notebook computer or, even a free subcompact car with the purchase of a full-price luxury sedan!

Frequent buyers
Frequent-buyer programs can be very powerful tools for building loyal clientele for both retail and service businesses. The more common approach is to give customers a card that is marked after each purchase and results in a free or reduced-price product or service offering after a specified number of regular-priced purchases. For example, ten haircuts may net one free haircut. Another approach is to give regular customers a discount on purchases upon presentation of their “Frequent Buyer” discount card.
Some businesses charge a small fee for their frequent-buyer cards. Others tie freebies or discount levels to purchase volume. For example, after spending $100 at a computer store you might receive a free subscription to their newsletter or 5 percent off your next purchase of $25 or more. After spending $250 you might receive a free storage disk or 10 percent off your next purchase of $25 or more.
Frequent buyer programs are also often implemented by independent retailers trying to survive the onslaught of superstores that offer their customers super-low prices.
Exclusive offerings
Offering exclusive purchases or previews of new merchandise to existing customers is a great way to inspire a feeling of excitement and loyalty. To enhance participation, you may wish to offer a discount. If the exclusive offering is in itself extremely attractive, the discount can be small.

Events
Hosting a special event in your business establishment, such as a celebrity appearance or a charity fundraiser, is a terrific way to introduce people to your business or maintain contact with existing customers. It also will create an aura of excitement and goodwill. You may even obtain media coverage!

Cross-promotions

You don’t have to be a movie producer or own an international fast-food chain to cross-promote your product with another business. You might consider offering free tickets to the local theater with each purchase of a particular item or price level. Another great business-to-business cross-promotion might be to offer free tickets to a ball game to any business willing to invest fifteen minutes of time just to listen to your sales pitch.

Trades
Ever notice the ads for car washes on taxi roofs? Car washes don’t pay cash for these advertisements! They get the exposure in exchange for cleaning the taxis periodically. If you are absolutely sold on developing an advertising campaign, remember that smaller media outfits will sometimes accept products in lieu of payment.

Giveaways
You’re probably wondering how you can make money if you give away product! Well, it’s a lot easier and less expensive than advertising. In fact, giveaways have their place in just about any type of business.
Selling business-to-business, you can generate goodwill with the people you choose—your best customers or a select roster of potential clientele—by occasionally giving them a small gift when you call on them. The giveaway should not be so expensive that a feeling of bribery is conveyed, but nice enough that it doesn’t end up trashed the minute you leave.
For consumer service businesses, you may want to offer your product for free trial periods, or offer free estimates if you are in a service-oriented business.
Retail businesses may hand out balloons or other novelty items to build traffic or retain customer interest.

New customer offers

Attracting new customers is one of the most difficult marketing challenges to achieve even with powerful advertising or a dedicated sales force. That’s why different businesses—national greeting card manufacturers to local oil delivery services—offer incentive pricing, freebies, or extra advertising allowances for new customers. Even lawyers customarily offer a free first consultation.





Database Marketing
"While no marketing method is a sure bet, chances are terrific that some type of database marketing is going to work really well for your business."

Database Marketing Is For Everyone!
Whether you're a partner in a consulting firm, a house painter, or president of an international conglomerate, database marketing is crucial for your success.
Database marketing can be simple or sophisticated. The key is that instead of just having a mailing list of prospective customers or a single list of current customers, you can use a computer to evaluate and manage the information more precisely.
For example, you may want to send a reminder mailing to every customer once a year; a monthly mailing to more active customers; and even place a phone call from time to time to your very best customers.

Tier Your Prospect Base
We generate hundreds of thousands of dollars in revenue every year selling reference books to libraries at very little cost by almost exclusively using database marketing.
While there are tens of thousands of libraries in the country, we have learned from experience that main public libraries with budgets over $25,000 are by far our best target customers. So we mail to this relatively small group of just over two thousand libraries, six times a year.
Less promising prospects, like college libraries and branch libraries, we mail to just once a year.
This reflects a primary rule for database marketing--spend most of your money hitting your best customers repeatedly, but save a little to experiment with new target groups.
We also make follow-up phone calls to our very best prospects like the largest library systems and to previous customers who didn't order this year.

Use A Mix Of Marketing Vehicles
Historically, database marketing relied overwhelmingly on direct mail. Then increasingly telemarketing has been used. And now there are a slew of alternatives to consider, including e-mail, fax, and the World Wide Web. Be cautious of legal restrictions that in the U.S. prohibit companies from sending unsolicited faxes to people or companies with whom they don't have a business relationship.
Particularly for closing sales for higher-ticket goods or services, a combination of several different contact methods may work best.
For example, you may first send a direct-mail piece to "warm up" a prospect and then phone to get an appointment where you try to close the sale in person.
Or in a direct-mail piece you may refer the prospect to a World Wide Web site, a fax-back number, or an e-mail address where the prospect can get more information without hesitating because they don't want to talk to a salesperson just yet.

Fancy And Expensive Doesn't Always Sell!

Again and again, I've learned in direct-mail campaigns that fancy and expensive doesn't always mean better results. Also, once you get into four-color printing the start-up costs are high, so it is very expensive to test even small quantities.
Make your mailing pieces professional and clean--but don't go overboard.
Generally a one-page letter, a two-to-four page flyer with two colors at the most, and a business reply card are all you need for an effective mailing.
Avoid using mailing labels--address the envelopes yourself or have a mailing house do it by computer.
Make sure you have a "call to action" in your letter--like a free evaluation, a free gift, or a limited-time deep discount.
Test all the variables in small quantity mailings, giving extra emphasis to testing different mailing lists and different offers.

TEST! TEST! TEST!

In database marketing, changing even a small variable can wildly change your results. So once a mailing works for you in test quantities, do the exact same mailing to the exact same mailing list in larger quantities.
When you do tests, isolate one variable at a time. For example, in a direct-mail test last summer for our Adams Streetwise Small Business Start-Up software, I had three people write totally different letters, each of which we sent to two different magazine subscriber lists. We even included a snappy four-color flyer and a generous $10 rebate on a $40 software package. We carefully marked each response card so we could track sales. The results were easy to analyze. All six variants of the test produced almost identical results: Nothing--a response of less than 1/10 of 1 percent for a net loss of over 90 percent of our costs. That's why you always do test quantities first!

Newsletters Turn Buyers Into Customers!
"I kicked, screamed, and dragged my feet when my marketing manager wanted to try a newsletter. 'Why not just send product flyers?' I asked. But they've worked for us and a lot of other companies, too!"

Will They Buy From You Tomorrow?
So they bought your product yesterday, but will they buy it tomorrow? In many markets the substantive differences between products have narrowed to the point of insignificance. Hence, your ability to build a relationship with people who buy your products is more critical than ever. And newsletters can help build relationships. They can show customers how to get more value out of your products, perhaps by showing how other customers are finding new uses for them or, in the case of resellers, by showing new ways to merchandise them.
You want customers to know as much about your products and services and your firm as they possibly can. And you want to keep your firm fresh in their minds. If you can do this, they are going to be much more likely to do business with you again, even if a competitor is offering the same product or service at the same price.

Create Product Evangelists!
Especially in its early days, when it dominated the emerging market for personal computers, Apple Computer was phenomenally successful at creating product evangelists. These were people who not only liked Apple computers, they loved them, and they loved them so much they told everyone they knew to go buy one!
Newsletters can help create product evangelists by building a bond with your product users. You may also want to send newsletters to "key influencers"-people who are in an unusually good position to be able to recommend your product to many others.
For example, part of the success of our JobBank™ career books is attributable to how widely and favorably they have been recommended to job hunters by college placement counselors and librarians-to whom we often send mailings.

Avoid The Hype!

One of the reasons many newsletters work is that people read them-no small feat when one considers the typical mail volume at most businesses. The reason people read them is that they think they might find something useful or interesting-not just a blatant sales pitch.
For example, the leading publisher in the book trade, Random House, has a newsletter that is as well-read as some of the industry trade magazines. People love the chatty, informal, no-hype style. And the newsletter has tremendously added to its credibility and readership popularity by occasionally recommending books published by competing firms. Like many other newsletters today, the Random House newsletter is also available free-of-charge on the Web.

Cracking Tough Accounts!
My marketing manager loves newsletters because in his earlier twenty-year career as a retail buyer, newsletters got him to place orders, but fancy brochures and flyers went quickly into the wastebasket.
In my experience I've had mixed results mass-mailing newsletters to cold prospects, opening up just a few new accounts. On the other hand, though, I find that newsletters work well as one part of the sales mix, when you are already calling or visiting a critical, but difficult, new account.
Sometimes I find that buyers at larger accounts drag their feet picking up a new product until they feel it's already a well-established success. And a newsletter is a perfect vehicle to communicate the success of your products to potential buyers.

Side Benefits Of Newsletters
Newsletters are great not just for customers, but also for getting employees, distributors, commission sales reps, the media, and other third parties excited about your firm. I'm often surprised to hear that even many employees learn important new information about our company through the newsletter.
I've also found that the job of newsletter editor is a great motivator in and of itself. I know one of our newsletter editors felt that creating the newsletter was the most exciting part of his entire job-no big surprise since he was in charge of the newsletter and the rest of his job consisted of being one of many assistant editors on a large editorial team.

Customer Loyalty
"It takes a lot less money to increase your retention of current customers than to find new ones-but I know I don't give it as much effort as I should because it does take a lot of energy and effort!"

Strategize And Plan For Loyalty!
Do you even have a specific plan for building customer loyalty?
I bet you haven't given it as much thought as you should- because to tell the truth I need to give it more effort also.
If you currently retain 70 percent of your customers and you start a program to improve that to 80 percent, you'll add an additional 10 percent to your growth rate.
Particularly because of the high cost of landing new customers versus the high profitability of a loyal customer base, you might want to reflect upon your current business strategy.
These four factors will greatly affect your ability to build a loyal customer base:
1. Products that are highly differentiated from those of the competition.
2. Higher-end products where price is not the primary buying factor.
3. Products with a high service component.
4. Multiple products for the same customer.

Market To Your Own Customers!
Giving a lot of thought to your marketing programs aimed at current customers is one aspect of building customer loyalty.
When you buy a new car, many dealers will within minutes try to sell you an extended warranty, an alarm system, and maybe rustproofing. It's often a very easy sale and costs the dealer almost nothing to make. Are there additional products or services you can sell your customers?
Three years ago my house was painted, and it's now due for another coat. Why hasn't the painter called or at least sent a card? It would be a lot less expensive than getting new customers through his newspaper ad, and since I was happy with his work I won't get four competing bids this time. Keep all the information you can on your customers and don't hesitate to ask for the next sale.

Use Complaints To Build Business!
When customers aren't happy with your business they usually won't complain to you - instead, they'll probably complain to just about everyone else they know - and take their business to your competition next time. That's why an increasing number of businesses are making follow-up calls or mailing satisfaction questionnaires after the sale is made. They find that if they promptly follow up and resolve a customer's complaint, the customer might be even more likely to do business than the average customer who didn't have a complaint.
In many business situations, the customer will have many more interactions after the sale with technical, service, or customer support people than they did with the sales people. So if you're serious about retaining customers or getting referrals, these interactions are the ones that are really going to matter. They really should be handled with the same attention and focus that sales calls get because in a way they are sales calls for repeat business.

Reach Out To Your Customers!
Contact . . . contact . . . contact with current customers is a good way to build their loyalty. The more the customer sees someone from your firm, the more likely you'll get the next order. Send Christmas cards, see them at trade shows, stop by to make sure everything's okay.
Send a simple newsletter to your customers-tell them about the great things that are happening at your firm and include some useful information for them. Send them copies of any media clippings about your firm. Invite them to free seminars. The more they know about you, the more they see you as someone out to help them, the more they know about your accomplishments-the more loyal a customer they will be.

Loyal Customers and Loyal Workforces
Building customer loyalty will be a lot easier if you have a loyal workforce-not at all a given these days. It is especially important for you to retain those employees who interact with customers such as sales people, technical support, and customer-service people. Many companies give a lot of attention to retaining sales people but little to support people. I've been fortunate to have the same great people in customer service for years-and the compliments from customers make it clear that they really appreciate specific people in our service function.
The increasing trend today is to send customer-service and technical-support calls into queue for the next available person. This builds no personal loyalty and probably less loyalty for the firm. Before you go this route, be sure this is what your customers prefer. Otherwise I'd assign a specific support person to every significant customer.
One last thing-don't tell your customers your 800 line phone number is for orders only!

Fax Marketing
A fax machine offers you a fast and inexpensive way to alert potential customers to new or service product offerings or special promotions. And, it provides an easy way for customers to send you orders. For an option to purchasing or leasing traditional fax machines, many personal computers being sold today include a fax/modem, which enable customers to send and receive faxes from the desktop as well.

Legal ramifications
You can send faxes to existing customers announcing a special offer on a new product. As of December 1992, however, the Telephone Consumer Protection Act has made it illegal to send unsolicited, commercial faxes.

Fax-back service
You can offer your customers fax-back service. A fax-back service allows a customer to call a business, listen to a prerecorded menu of options, select an option, and then request that the appropriate information be sent to a fax number. An automated fax-back system can print out a listing of how many customers called and where the information was sent.

Broadcast faxing
Broadcast faxing is a great way to reach a large target audience. If you have a generic fax to send to many locations at a specific time, you can set many fax machines and most computer fax programs to dial multiple numbers. If your customers rely on you for updates and product changes, then broadcast faxing is a terrific way to communicate that information.

Perking up your packaging
"One of the easiest ways to bump up your sales is to spruce up your packaging!"

Packaging Can Mean Everything!
Don't judge a book by its cover," they say-but as a book publisher I can tell you that the cover is exactly how most people judge books! Especially when you're selling a product through retailers, the name of the product, the design of the package, and the sell copy make all the difference in the world!
The first resume book I published was called Paper Tiger and sported a cover picture of the same animal.
The sales were abysmal. We retitled it The Resume Handbook, gave it a powerful all-type cover, and bingo-the sales took off!
When we first launched our business software line, the sell-through was weak, and most blamed the packaging-which I found hard to believe since I had designed it myself. Unbeknownst to me, others in my office came up with a great new design-which I finally agreed to try-and our software sales increased markedly.

Creative Packaging Sells!
If you've got an MBA like me, you're going to be tempted to stick with very standard-shaped packaging-on paper the numbers will always look better. Not only does it take less time to design and have a lower die cost, but you can run it on with your other standard designs and have great economies of scale.
But when you walk around a retail store, it's the odd-shaped packages that stand out and get attention.
A few years ago I published a book called 365 TV-Free Activities That You Can Do with Your Child. The contents was not much different than that of several hundred other books on kids' activities. But the packaging really stood out. We went for a very small format, just 4 × 6 inches, with a very high page count, 480 pages, making it look almost square, more like a toy than a book. We sold over 500,000 copies.

Make The Package Pop!

When in doubt on packaging, I'd go bright and brassy rather than light and classy!
It's so important to stand out on that retail shelf and get noticed! If your product is picked up first, the buyer will spend more time with it and be more likely to buy it than the next product he or she looks at.
A buyer at a national chain told us that he loved our packages because they were bright, easy to find on the shelf, and looked lively and accessible. Unfortunately, he also told other publishers to go out and copy what we were doing.

How Good Is Your Packaging?
It is hard to do great packaging, and sometimes, because you're so close to it, it's hard even to know if your packaging is good or not.
For years after starting our business, I thought our packaging was great. Our customers and sales reps never said anything-after all, they were used to it, and it wasn't too much worse than what other small, struggling publishers did. But as I began to try to line up new distribution overseas, the Australians and the Canadians were very candid with me: "You need new packaging!" they told me.
Since then I've gone crazy on design. I hired a super-talented designer with an ad agency background. Now we budget two designers for every book cover, and sometimes we'll go through dozens of cover designs for a single important book.

Skyrocket Sales With Pop Displays!
Whatever your package looks like, you can really crank up your sales with point-of-purchase (POP) merchandising.
Free-standing floor displays, usually called "dumps," are perhaps the most powerful point-of-purchase item you can develop. The drawback is that even small runs made out of cardstock can be expensive because of the tooling expense. So unless your product is hot, retailers aren't going to order enough to justify dumps.
Counter displays, called "prepacks" if they double as a self-shipper, are perfect for the small impulse items a retailer might place on a counter.
There are many other point-of-purchase alternatives including posters, tent cards, buttons, and stickers-but I find that dumps and prepacks are by far the best bet.

Point of Sales Displays
One of the best investments of your marketing dollars that you can make is in point-of-sale displays. These displays allow you to dramatically increase the impact of your product at the moment it counts most—at purchase time. Of course, such displays are most effective for impulse items or items for which consumers do not have brand loyalty.

Sales increases
Large displays set up in prominent locations in high-traffic supermarkets have been shown to increase the rate of sales by as much as 64-fold over the same items sold from their regular shelf locations. My experience, however, shows that more common sales increases are from one-and-a-half to threefold—still huge increases.

Set-up
The biggest difficulty in point-of-sale displays is getting retailers to actually use them. Most national retail chains are very selective in deciding which products to accept displays for. They often expect the manufacturer to offer cash incentives for the privilege of allowing you to set up a display in their stores. Some store managers of national retail chains will make their own decisions as to what displays they will accommodate on their floors, even if you have an agreement with the national office that is backed by cash incentives and guarantees a full chain display program. And even if you do manage to get display exposure, merchants prefer to keep displays up for short periods of time in order to keep the impression of their merchandise mix fresh and appealing to their consumers.

Dumps
Floor displays, commonly referred to as dumps, are most effective if placed at the front of the store. This location guarantees viewing by the maximum number of visiting consumers. This arrangement is the most powerful of all point-of-sale display options.
This type of display is often fabricated out of card stock. But it can be very expensive to manufacture. Typically merchants reserve the display of dumps for their top brands and fastest selling promotions.

Counter displays
Counter displays are sometimes called prepacks when the display also serves double duty as a counter item. Merchants generally use counter displays for low-priced items that a consumer might decide to purchase on impulse while they are waiting for sales assistance or standing at the cash register. Small novelty items are ideal for counter displays.
Counter displays need to be attractive, cute, and even whimsical. They also need to be conservative in space requirements and height so as not to obstruct the line of vision between the sales clerk and the customer.

Posters
Posters are the least inspiring point-of-sale display vehicle when used to attract consumers to products they were not previously aware of. But they can be very effective in pulling in customers to purchase a product they have some knowledge of—perhaps through an extensive advertising or publicity campaign.

Shelf talkers
Shelf talkers are signs that appear alongside a given item on the shelf. They can be very effective and, best of all, cost relatively little to produce. They require short, brief copy that can really grab a consumer’s attention.

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