Entries Tagged 'Marketing Strategy' ↓

The marketing process is often depicted as a funnel.  The funnel guides the consumer from the widest part, his awareness of a product, down to the thinnest part, the actual purchase of a product.  The funnel image is a great tool for describing the marketing process. However, for as long as I’ve been exposed to the funnel, I’ve had an issue with it: The sale of a product is not the end of the marketing process.  In fact, it’s a point at which a whole other process kicks off that culminates in either repeat business or referrals.

I struggled with how best to articulate this concept for a while until I stumbled upon Duct Tape Marketing’s blog post, “The Easiest Way to Describe the Marketing Process.”  In that post, John Jantsch explains the process, not as a funnel, but as an hourglass.  This was a “duh” moment for me, and I immediately decided that I needed to start using this imagery (thanks, John!).

The Two Halves of the Hourglass

The reason the hourglass works so well is because it’s basically two funnels, one stacked inverted upon the other.  The top half is the marketing funnel that we all have come to know and love/hate.  It deals with the customer acquisition part of the marketing process.  In the top half of the hourglass, we’re going out to a wide pool of consumers, and slowly guiding them towards the purchase of the product that we’re selling.  The tools to do this are the well-known marketing tools of advertising, PR, demoing, sampling, etc.

The second half of the hourglass is where this whole concept gets interesting.  The traditional funnel model, essentially says that once you’ve made the sale, your marketing job is over.  If you want to make more sales, go back to the top of the funnel.  The hourglass, however, acknowledges that there are better and more efficient ways to make additional sales.  As the consumer (or the grain of sand) passes through the middle of the hourglass he comes out on the other side in a process that aims to keep that customer coming back as a repeat customer and/or or to have that customer refer another customer to your product.

The second half of the hourglass is so important because the repeat customer, or the customer that will evangelize your product is the holy grail of any business.  Having every single sale come through the top half of the hourglass means lots of new customer acquisition, which is expensive, and time consuming.  Every grain of sand going through the top half of the hourglass is a single sale.  If you want another sale, you need another grain of sand.  When you get repeat business and referrals, it means that the first process yields multiple sales.  Every grain of sand through the top half of the hourglass can yield an exponentially larger number of sales. Some businesses do the second half of this process so well, that they can eventually forego the entire first half.  Isn’t that the dream?  When you no longer have to worry about finding new customers, and your customers instead find you, or just keep returning to you?

Expressing the Halves of the Hourglass

John Jantsch at Duct Tape Marketing expressed the different steps involved in the hourglass process of marketing in his own way, but what follows are the steps as I see them.  In some places, they’re simpler, in others more elaborate.  In the end, we’re expressing the same thing, but using different methods.

Awareness:  The consumer becomes aware of your product or service. At this point, all that’s happened is that he now knows it exists. If you sell purple widgets, this is the point where you need to make people aware the purple widgets exist and are for sale.

Interest:  The customer knows the product exists, and now he’s interested in learning more about it.  This is where you get to educate the consumer as to why he needs a purple widget.

Intent:  The consumer has now done his homework and knows he wants to buy.  At this point, he’s just looking for where to buy it.  The idea here is to make it as painless as possible for the consumer to buy your purple widget.

Purchase/Sale:  The consumer has purchased your purple widget.

Experience:  Now that the consumer has purchased your purple widget, you better be sure the experience he has with it is positive.  This comes down to making sure you can deliver on what was promised.  If you can’t, forget about getting return business.  Bonus points if you can overdeliver on what was promised.

Trust/Identify:  Assuming that the consumer is happy with his purple widget, you now have an opportunity to create a link with him.  You can forge a relationship with this consumer.  Some companies are doing this through loyalty programs, others are experimenting with social media to find new ways to connect with their customers, and the best companies realize that no matter what they do, this is all about delivering top-notch customer service and showing the customer just how much he means to them.

Repeat/Refer:  If you do the above steps correctly, the customer will gladly purchase from you again, and he’ll probably even tell his friends that they should purchase from you as well.  All of a sudden, all of the people he knows are getting their purple widgets from you.

Use Hourglass Marketing

So much emphasis is put on the top funnel in marketing because it’s the hard part.  You have to take non-believers, and get them to buy from you.  The bottom half of the hourglass is easy.  It’s just a matter of delivering on your promises, treating your customers like the valued people they are, and making it easy for them to come back, and to tell their friends how great you are.  Unfortunately, because we’re often so busy focusing on the tough first half, we forget about the second half.  The hourglass as a whole is important, and truly successful businesses know this.

If you want your business to succeed, use the hourglass.

Image courtesy of secubie.

A Story You Might Recognize

Bob used to work for a Big Corporation as a product manager, but he recently decided to make a change.  Bob joined the team at Medium-Sized Business Ltd. (MSB).  MSB is a dynamic, up and coming, growing manufacturer of custom-made, high-end wall units for home entertainment systems.

Bob’s boss is Joe.  Joe started MSB five years ago, as a one-man show.  He would build units on commission for family and friends, and eventually his reputation grew.  Now, Joe has a team of 50 people working for him.  MSB is known as a premiere boutique shop for high-end living room furniture in the metropolitan area where it is located.  While many other boutique shops are going out of business due to tough economic times, MSB has only seen a slight dip in revenues, and Joe, being a savvy businessman, sees the downturn as an opportunity.

Joe wants to expand MSB.  He has the high-end market segment locked down, so he has decided he wants to make a play for the mass market – the middle-class consumer.  He knows that to do this, he will have to compete with the big box stores, and he will have to make changes to his product line.  That’s why he hired, Bob.  Bob knows what it takes to sell to the middle-class.

Bob spends his first couple of months at MSB, crafting a product line that he believes will be a big hit with the demographic Joe wants to target.  It’s cheaper than MSB’s customized offerings, and as a result is far less customized.  It’s a basic product line, with only three options of colors, and a handful of configuration options.  Because the products are more standardized, MSB can churn them out at greater scale, for less cost, and can afford to sell them at prices that appeal to the middle-class consumer. It will stand apart from the products of the big box store because it has MSB’s reputation behind it, and because despite being cheaper, it will still be well-crafted.

Bob thinks they have a winner on their hands, so he presents the plans to Joe, and Joe is onboard.  Initial investment begins to create the infrastructure needed to add to MSB’s current custom business and bulid a standardized product line parallel to the custom line.

Two weeks before the launch of the new product line, Joe calls Bob into his office.

“Bob, I was talking to Sally from sales, and she’s really concerned that we’re not offering chestnut as a colour.  She thinks that if we don’t have chestnut, which has been one of our signature colours on our current products, we might lose our customer base.”

“Uhh…  Joe, we launch in two weeks.”

“I know, but I need you to find a way to add a chestnut colour option.”

Bob runs out of Joe’s office spends three sleepless nights at the office, but eventually figures out a way to add a chestnut colour option to the product line, and still launch on time.

A week before the product line launches, Joe again calls Bob into his office.  Joe looks anxious, which is unusual for Joe, normally a very calm and collected man.

“Bob, I was talking to Tim from sales, and he’s concerned that we don’t have a $50 piece in the new line.”

“Uhh…  Joe, we launch next week.”

“I know, but Tim thinks that without a piece at a bargain price-point, we’re not going to be able to get the bargain hunters.”

Bob has always prided himself on getting things done, and so he runs out of Joe’s office, grabs MSB’s chief designer, and they throw together a cheap, bargain-priced unit to add to the line, just two days before launch.

Launch time comes, Bob is exhausted, also he’s worried.  The last minute changes to the line make it a lot less tight than the line that he had initially planned out.  The production process is no longer as smooth and seamless as it was, as now there are manual workarounds that had to be worked out to accomodate the last minute changes.  There’s possibilities for human errors.

Sales start coming in, and Joe is ecstatic, they’re getting the sales from the mass-market segment they were looking for, but they’re also getting tons of orders for the low-end $50 bargain piece.  Also, Chestnut is the least popular colour in the line, but there are still a decent number of orders for it.

Volumes continue to grow, and Joe continues to get happier as he sees his revenues growing.  Bob, on the other hand is getting increasingly concerned. He hasn’t been sleeping of late.  He’s been talking to the people on the production room floor and they’re having trouble accommodating the volume of the bargain-priced piece, and the cost of keeping the chestnut coloured stain in stock is straining their budget.

Soon, a few glitches start happening in the production process, and the team falls behind its production schedule.  In order to make up for lost time, they start taking shortcuts, and some of the units going out are not the quality that MSB is used to producing.  Also, the shortcuts take less time, but cost more money.  Joe’s looking at his revenues, but Bob’s looking at the balance sheet, and while it’s still in the black, it’s not looking as great as he’d hoped.

Two months into the new product line, Furniture Weekly, after five years of writing nothing but glowing reviews of MSB, has slammed their new product line as “cheap, and of poor craftsmanship.” MSB’s reputation takes a hit, and the sales of their flagship custom line start to fall.

Joe calls Bob into his office one last time and tells him that he made a mistake. “I should have stuck to what we did best.  I’m sorry, Bob, but we’re going back to making high-end furniture only.  We’re not going to need your services anymore.”

The Moral of the Story

The above story is fictional, but I’m sure anyone who has worked in business for a little while has seen variations on it many times over.

Joe did make a mistake, but it wasn’t expanding his business.  There’s a large movement towards “small is the new big,” but I think what people forget is that this doesn’t mean that small can’t continue to grow.  Joe had successfully cornered his market, and he was in a good position to unlock a new revenue stream.  He wasn’t growing just for the sake of growing.  It was intelligent growth.

Joe’s mistake was that with his new product line, he tried to be everything to everyone.  By adding in the new colour option at the 11th hour, he was trying to appeal to the customers that he was already serving with his customized product.  By adding in the bargain-priced unit, he was trying to target the bargain shopper.  Bob’s product line was not meant to target either of those consumers.  It was meant to target the middle-class consumer who wants good quality at a reasonable price.  The consumer who wants a wider colour palette needs to spend more.  The consumer who wants bargain-priced goods is going to buy from Walmart, and isn’t as concerned about craftsmanship.

When you try to be all things to all people, you weaken your product offering, and you set yourself up for failure. Bob knew this, but he didn’t say anything because he was the new guy and he wanted to please his boss.  In the end, this cost Bob his job, so Bob failed in a big way, too.  It was his responsibility to make sure Joe understood what was happening.

What does this have to do with marketing?

If you don’t understand that this whole story is about marketing, I think you should head over and read Mitch Joel’s recent post on Six Pixels of Separation on the differences between marketing and advertising (even if you did understand it, Mitch Joel is still worth reading).

On a more precise note, however, the same lesson needs to be applied to all your marketing strategies.  Know your target market, and target them with a single-mindedness. Don’t get distracted by those that kind of look like your target market, but aren’t quite it.  The bigger your target market, the broader and more generic your messaging has to be.  The broader and more generic your message becomes, the less attractive it is to your target market.

Resolve to Treat Your Target Audience Well

A new year will be starting soon, and you’ll probably be making some resolutions.  Include in there a resolution to treat your target market with respect, and not get tempted to market to the world.

Happy Holidays, All. I hope you’ll all be taking this time to spend with your families, and enjoy some downtime, no matter your beliefs or religious denominations.

The other day, a colleague came up to me and said, “Can you take a look at this client’s search marketing campaign?  He wants to target all of North America.”

“What’s his budget?” I asked.

“Five hundred dollars per month.”

This got me thinking about how small businesses perceive the web and the opportunities that it presents to them.

Going Global

Not too long ago, a small business was, by definition, a local business.  Expanding beyond local was expensive.  It required infrastructure, logistics management, more inventory, and more resources.  Small businesses didn’t have any of these things.  Today, for the most part, small businesses still don’t have any of these things.  The difference is that now they don’t need most of them.

The first thing that allowed small businesses to expand beyond the local was the availability of cheap shipping.  This opened up the door to business models that included a centralized location, but that could service a wide area.  Amazon would not be the largest book seller in the world if it weren’t for carriers like UPS, FedEx, DHL and more, competing to bring down the price of bringing goods to the consumer’s front door.

With a distribution network already in place, the ubiquity of the internet made going beyond local a breeze.  With a home on the web, you could just as easily be found by your neighbour, one block over, or by a Texan rancher, or by a Tokyo yuppie.  The dream of going global was no longer reserved for the multinational.

Hugh MacLeod, the copywriter turned artist, turned small business author (affiliate link), often writes about the global microbrand.  The global microbrand is the manifestation of a single individual turning himself into a brand that he can market across the planet.  It appeals, particularly, to creative entrepreneurs like artists and writers, who often have a hard time finding a big enough market for their goods locally.

Hugh has built himself a global microbrand, with little financial investment, and a whole lot of hard work and perseverance.  Still, Hugh has always been quick to point out that while he has become “internet famous,” he has yet to strike it rich.  As sales of his books and his art increase with the size of his audience, it may only be a matter of time, but it hasn’t been easy for him to get there.

Hugh’s story, and stories of those like him, have showcased that it is possible to go global with a small business and be successful. But, I can’t help but feel that going beyond local too quickly makes this process harder than it needs to be.

The Advantages of Local

Before the internet and cheap shipping made it so easy to start a global business, the ordinary route for expanding beyond local went something like this: Start a local business.  Develop a reputation as a trusted member of the local business community.  Grow revenues.  Use revenues from your first location to open a second location.  Wash.  Rinse.  Repeat.

Going global, was a slow and tedious task, especially if every location you opened took as long to grow as your first location.  No wonder people wanted to skip all that and turn to the web.

The thing that we forget is that growing beyond that first location isn’t a direct line of growth, it’s an exponential growth curve.  Sam Walton started off owning a single general store in Arkansas.  Today, Wal-Mart is the biggest retailer in the world, and the Waltons are one of the wealthiest families in the world.  Every single store they opened after the first store got progressively easier to open.  the simple reason for that is that the reptuation from all of the previous stores, made expansion easier.  Today, if you find out a Wal-Mart is opening near you, regardless of your feelings towards the chain, you know exactly what the expect.  Decent, but not excellent, quality goods at everyday low prices.  You just know that.

There are certain advantages to starting locally, and the biggest all have to do with reputation.  When you start your business locally, you know the people around you.  You know your market.  You know your customers.  In fact, when you start locally, you probably knew your customers long before they were your customers.  In many instances, you start off with a built-in group of customers.

Those customers learn your reputation, and they spread it to those closest to them.  They talk about it at the office, at the bar, at Sunday barbecues.  Word of mouth is really easy to achieve locally.  Getting brand awareness locally is also really easy.  How easy?  Start wearing a T-shirt with your business’ name on it, and walk around your city.  If you don’t think that’ll generate leads, then there’s an issue with your business, not with your city.

Aside from that, in the local space, we all already have pre-established networks that we can use to spread the word of our business, all of which contributes to its success.

So, that’s great for getting that first location up and running, but how does that help in going beyond local?  Quite simply because now you have a history when you open your second location.  You have experience, you have testimonials, and you can point to all of these as social proof that what you do works.  This makes the second location that much more likely to succeed.

The Problem with Skipping the Local Step

The big problem with skipping the initial local step, and going global first, is that you’re removing all of your pre-existing advantages.  The web, and the world are huge, scary places, and most of us don’t have many connections “out there.”  If you’re concentrating on making worldwide sales, your backyard barbecue probably isn’t going to do you a whole world of good as a networking event.

I concede that there’s no reason why the people who would have bought from you if you were local won’t buy from you if you’re trying to go global, but the fact of the matter is, companies trying to go global have a different mindset.  They start thinking of their market in terms of generalities, and oftentimes, this isn’t the best way to attract local buyers.

The other big issue with skippling the local step is that while many of the problems of going global have been resolved by modern conveniences, some still remain.  True, you only need a single warehouse, and can ship around the world relatively cheaply.  Alternatively, you can use drop shipping services.  You don’t need physical locations all around the world, you can take orders from a single website.

But what about our client from the beginning of this article?  Is he ready to go global?

You’ll notice that the first question I asked my colleague wasn’t, “What does the client do?” or “Where is he located?”  Instead, I asked, “What’s his budget?”

The internet has done some incredible things for marketing.  It has lowered the cost of marketing to the point where a small business can realistically compete with a multinational.  However, it has not caused miracles to happen.  A $500 budget for search engine marketing campaign is still a small budget, and while you can and should see good results for that budget on a local scale, it simply doesn’t make sense on a continental scale.  It’s the classic definition of spreading yourself too thin.  Yes, search engine marketing is a pay for performance medium.  Yes, you only pay when your ads are clicked.  Yes, mathematically speaking if you convert 10% of all visits on your site, it shouldn’t matter where those visits are coming from.

But it does matter.

Your clicks will be spread across an entire continent.  You’ll get single visits from various places. And, while mathematically, a 10% conversation rate, should mean that 10 out of every 100 visitors will convert, in practice, when all 100 of your customers are sitting in different locations, it rarely ever works that way.

Furthermore, none of what you learn from your campaign has any meaning because your data isn’t significant.  In order for data to be significant, you need to have a certain quantity of data.  Not only that, but all of the data points in that data set need to be similar.  When you’re targeting a wide area with a small budget, all of your data points are different.  You never get significant data, so it’s impossible to optimize your marketing.

The bottom line is that in many media, it still takes bigger budgets to broadcast on a wider scale.

Start local, hit your stride, then bust out of your local market.  Not only will it be easier to do, but you’ll be better prepared to take on the hyper-competitive global market.

What’s been your experience in the local vs. global game?  Have you gone beyond local?  Have you purposely chosen to stay local.  Share your story in the comments.

Ten years ago, the question was does a small business need a website?  Not everyone agreed on the answer to that question, but as the internet grew and took on more importance, the “yes” crowd steadily got bigger.  Recently, though, that crowd is starting to shrink.  If you reframe the question to, “Does a small business need a web presence?” you’ll rediscover the big “yes” crowd.  However, no longer does it seem that that web presence needs to be a website, in the traditional sense of the word.  One alternative to a small business website is a blog.  Nowadays, many small business have a website and a blog. Are blogs the new websites? Does a small business need a blog?

While I firmly believe that every small business can benefit from a web presence, the question of the blog isn’t so clear to me.  Let’s look at some of the advantages and disadvantages of blogging for small businesses.

The Advantages

1. It’s cheap

Small businesses don’t have huge marketing budgets, and so anything inexpensive is worth looking closely at.  Whether you have a website already or not, creating a blog is quick and can be free.  If you want to host your blog on your own domain, then you’ll need to purchase the domain from any number of places.  Then, you have to decide which blogging platform to use.  All of the major blogging platforms are free: WordPress, Blogger, TypePad (micro), Tumblr.  I have played around with each of these, and I think that WordPress is the way to go for the small business.  The interface is powerful, and the ability to add plug-ins makes it infinitely extensible.  Even if you just want to set up a simple blog, it is painless to do in WordPress, and you have room to grow.

If you want something more customized than the basic themes offered by WordPress, there are tons of free WordPress themes out in the wild, and there are developers who specialize in creating WordPress themes if you want to go the route of spending a little money on your blog.  The other option is to tweak an existing theme.  AdamDiStefano.com is built on WordPress and runs a modified version of Chris Pearson‘s free Copyblogger theme.

Even if you do decide to hire someone to create a theme and setup your WordPress for you, these kinds of jobs are considerably less expensive than building a website, because the framework already exists.

2. Creates a rapport with a customer

I keep hearing that customers want to buy from a business that they can connect with.  While, I’m still not convinced that this is the primary thing that customers are looking for in a company, providing a little transparency to customers can’t hurt.  While I may not care if the person I’m purchasing my new rocking chair from is my friend, some insight into that person’s craft can go a long way towards convincing me to purchase from him.

Aside from that, one of the biggest advantages that small businesses have over big business is that they have a human face.  Big business is catching on to this and many big companies now have brand advocates whose entire job is to make the business look human through the use of social media, blogs and other humanizing devices (there is still something strangely creepy about this process).  Oftentimes, these efforts can come off as forced, and rigid, with a corporate blog reading like something between a press release and an annual report.  Small businesses have the advantage of already having that human aspect, and so blogging will serve only to cement that.

3. Establishes you as an expert

Returning to the example of my rocking chair-making friend, by blogging about his craft, he is building authority.  If he produces quality content that educates and informs, this will be recognized and add credibility to sales pitch.  I imagine that there is considerable skill involved in making a well-crafted rocking chair.

Because small businesses often have to deal with the customer’s fear that they are not as professional or reliable as corporations, building this authority and credibility is essential for reassuring customers and attracting them.

4. Creates a way to be found (SEO)

In a previous post, I explained how search engine optimization works on a basic level.  Blogging helps with three major factors that determine a site’s ranking on Google: content, regular updates, and popularity.

Content speaks for itself.  By blogging, you create content.  Content is what search engines index.  Likewise, by its very nature, blogging provides the regular updates of relevant new content, that search engines like to see in sites.

Blogging helps the site’s popularity because if you’re doing it right, you’re creating content that people will want to link back to.  These back links are the currency that search engine algorithms are built on.

All this boils down to ways people can find you.  Whether it be through search engines, or through those back links (which people sometimes forget are more valuable in and of themselves than as search rank juice).  More visitors to your site means more potential customers.

The Disadvantages

1. It’s time consuming

Writing a blog takes time.  Contrary to what I’ve heard some claim, it takes lots of time, especially if you want to do it right.  You need to brainstorm topics.  Outline posts.  Research information that goes into those posts.  Write a draft.  Proof and edit that draft.  Post the final version and do any necessary formatting.  Then there’s the process of promoting the blog.  All of this adds up to a sizeable chunk of time.

Unfortunately, time is probably the one thing small business owners have the least of, right next to money.  And as we’ve already seen, time is money.

2. It doesn’t make sense for every business

I’ve heard proponents of blogging claim that everyone should be blogging.  I don’t agree.  First of all, if you’re not comfortable communicating with your customers, you shouldn’t blog.  Some will tell you that you can learn the skills necessary to blog, and yes, you probably could, but the idea behind blogging is to be authentic.  If you’re not being authentic, don’t bother.  Or if the authentic you is not someone that you think will draw customers in, don’t do it.

There are also certain industries where I just can’t see much sense in blogging.  The way I see it, the ideal is to be sharing expertise with potential customers or with people who will refer potential customers.  The problem isn’t so much that the service or product you provide doesn’t require much expertise, because if you’re in business, you’re adding some kind of value.  Instead, the issues arises more when the area of expertise is related to something that people don’t particularly want to learn about.  For example, I use dry cleaning services, and I’m sure there’s a whole science behind the process, but I really can’t see myself or (anyone else for that matter) reading a dry cleaner’s blog.  And the people who will read the blog are unlikely to be customers.  There’s a better chance they’ll be people looking to start their own dry cleaning business, or looking for DIY home solutions.

For some businesses, running a blog just doesn’t convert.  A blog just like any marketing tool, should have a measurable return on investment (ROI).  If there’s no ROI, there’s no reason to do it.

3. Risk of abandoning it

Worse than not having a blog is having an abandoned blog.  You see them all the time because they are littering the internet.  A blog that’s online is there for all to see.  If a user finds your blog and sees that it hasn’t been updated for six months, this immediately raises alarm bells in that user’s mind.  The same user finding a static web page that hasn’t been updated in six months doesn’t have those same concerns as long as the info on it is current.

Whether, justified or not, an abandoned blog conveys lack of professionalism, poor management or fear that the business no longer exists.  if you start writing a blog, you need to be certain you can keep up with the commitment, otherwise, it will do more harm than good.

Conclusion

Blogging is not for every business.  To decide whether it’s right for you, you need to evaluate the above points and do the math.  However, even if you decide not to blog, you should still have some kind of online presence.  This can be a static website, an active presence on Twitter (warning: also time consuming if done correctly), a Facebook fan page, a Google place page, landing pages as provided by online directories, etc.

Blogging can be a powerful marketing tool, but it’s not for everyone.  Find what works for you, and use it.  And beware those who promise one size fits all solutions.

In my previous post, I talked about the growing trend towards do-it-yourself in business.  With all these tools available, it’s easy for business owners to get distracted by how much money they could save and try to do everything themselves.  However, in some instances, it really is advantageous to hire an expert.  What follows are six reasons that you might want to hire an expert.  If after going through the list, you remain unconvinced, then chances are you can do it yourself.

1. Expertise

Okay, so this might seem blatantly obvious and ridiculous for being included, but oftentimes, we tend to forget that experts (real experts), actually do possess knowledge and expertise that the rest of us do not.  That’s how they became experts.  In some cases, you absolutely need that expertise.  Also, how much expertise you need is a function of the severity of the situation.  If I need to change the oil on my car, I can do that myself.  If I need to change the transmission on my car, I need an expert.

In the world of internet marketing, it’s no different.  You may be able to write pretty well, and you might be able to throw together a half-decent looking site using some free resources.  For many people that may be all they need.  However, if you really want to maximize the potential of your website, a good professional copywriter has the expertise necessary to write you copy that will sell.  You can write, but he is an expert at writing.

2. Time Savings

“Time is money.”  I have no idea where that quote came from, but its truth for any businessperson is undeniable.  Every hour you waste fiddling with your website, or your Adwords campaign, or your analytics reports, is an hour you’re not spending making the products that make you money.  Saving $2,000 on hiring a consultant is not savings if you could have spent the time you were using doing the consultant’s job making $5,000.

Not to mention that entrepreneurs work notoriously long hours, and sometimes, the money spent on an expert is worth it even if all it means is that you have a little more time for yourself, for your family and for your life outside of your business.

3. Money Savings

This might seem counter-intuitive, because you spend money on experts, so how can they save you money?  Well, if you’ve ever tried to do something yourself and screwed it up royally, then you understand.  A friend of mine once tried to save some cash by remodeling his bathroom himself.  He paid for the materials, but saved on labour, and he had the extra time on his hands to do the renovations.  All was going well, until in the course of remodeling, he burst a water pipe.  He had to hire a contractor to fix the resulting damage caused by flooding.  Total savings?  Negative.

The same thing can happen with your marketing.  If you don’t know what you’re doing, you can potentially waste thousands of dollars on ineffective advertising.  That’s not to say you can’t figure it out.  You can, but you have to accept the risk that something might go wrong, and that could cost you far more than hiring an expert would have cost you.

4. Learning Experience

Something I look for in any expert I hire is someone that is willing to share his experience and educate me while still doing the job I hired him for.  This is particularly great if you want to learn a new field or just further your knowledge in a certain field.  Perhaps you can learn enough that next time around you’ll feel comfortable doing the job yourself.  True, not everything can be taught in the course of a short relationship.  My mechanic just wasn’t willing to talk me through how he went about changing my transmission.  However, in small business marketing, where most experts fulfill a consultative role, their goal should be to help the client learn.

5. Benefiting from Connections

If you go to a foreign country on vacation, and you look like a tourist, it won’t take you long to feel like you’re getting screwed.  You always get the sense that there’s two prices.  One for the locals, and one for the tourists.  That’s because there is.  Dabbling in do-it-yourself is a lot like that.  When you venture into the world of internet marketing, you’re a tourist.  You will go to the tourist attractions, and you will pay more for less.

Hiring an expert is like getting a local guide.  He knows the lay of the land.  He knows where the best deals are.  He knows who to go to get a quality service, and who’s just going to rob you.  This knowledge, these connections and this network come from living and breathing the stuff that you’re just dabbling in.  When you hire an expert, you get to take advantage of all that.

6. Growing Your Own Network

You know all those connections and that network that your expert used to help you when you hired him?  Well, if you play your cards right, you’ll be able to use some of those connections and part of that network even after the relationship with the expert is over.  In the world of business, the cliche is that who you know is as important as what you know.  By using experts, you get introductions to the right people who may be of service to you in the future.

To Hire or Not to Hire?

After going through the above list, what are your thoughts?  Do you still believe that experts are a waste of money?  Or would you never even consider undertaking a project in unfamiliar territory without the help of an expert? Let’s hear about it in the comments.

Traditional advertising was pretty straightforward.  You decided where you wanted to advertise, decided what you wanted advertised, and then you paid someone to do it for you.  The nature of the media dictated that you needed to pay someone to do it for you, because business owners and entrepreneurs didn’t have the skill sets to create TV spots, or full-page magazine ads.  New technologies and new media are changing that.  Advertising is more self-serve than ever.  As a result, small business owners and entrepreneurs are doing more themselves, and saving money.

In all this excitement over the free advertising opportunities provided by the web, and social media, people often forget to factor in one cost: their own time.  Keeping up with a marketing strategy that involves blogging, posting on forums, checking Facebook, checking Twitter, running your own PPC ad campaigns, etc., can easily become a full-time, forty-plus hour per week job.

The fact is that while you’re running your marketing strategy, you’re not doing everything else that needs to get done in your business.  It’s easy to read blogs like mine and forget that there are other aspects to running a business than marketing.  You still need to create a product or service to sell.  You still need to keep track of the financials.  You still need to manage your supply chain.  So, while you’re spending all this time on web marketing, what else could you be doing?

Small business owners and entrepreneurs quickly find out when they start out that running your own business is easily more time consuming than working a full-time job, but what they often forget is that running your own business doesn’t mean that you need to do everything yourself, or that you have to do everything you think you do.

Before you jump into all these “free” forms of advertising with both feet, do a quick mental calculation.  How much is your time worth?  The best way to figure this out is to figure out how much you would pay yourself per hour for the work you do (sometimes, the hourly figure can be a little bit depressing, but bear with me).  Once you’ve figured out what your time is worth, figure out how much time you’re spending on running your “free” marketing.  Now, multiply what your time is worth by the number of hours you’re spending on marketing.  Suddenly, all these wonderful free forms of advertising aren’t so free.

Ask yourself if your time might not be better spent doing the things that you are actually making money from.  If you’re a plumber, maybe you can make a few more calls a week.  If you make custom furniture, maybe you can churn out a couple more pieces a month.  Remember that what makes your business is the product that you’re selling, and your expertise lies in that product, so focus on your area of expertise.

“But what about my marketing?” I can hear you asking.  “It’s not going to take care of itself.”

No, it’s not, but now that you know what it’s really costing you, maybe you should see if it might not be a wiser investment to use traditional media?  Or perhaps to hire a consultant or an agency?  It’s almost sacrilegious to suggest such things on the web where there’s an intrinsic virtue associated to “free”, but from a dollars and cents perspective they’re the logical course of action.

In my next post, I’ll talk about the real value of using an expert for your marketing needs.

What do you think?  Am I completely out to lunch?  Is there really no value to traditional media anymore and businesses should focus as much as possible on free media?  Let me know in the comments.

When you enjoy what you do for a living, you have a hard time disconnecting from it.  You tend to see the world around you through the lens of your “work.”  Last weekend, I unwound by visiting Marché Jean-Talon, a large local farmer’s market, with my better half.  Despite being as disconnected from work as I could be, I still managed to see small business and marketing lessons all around.

Here is the story of my day, and the lessons I learned.

1. Customers are willing to pay more for quality and service

After hunting for parking for fifteen minutes, we eventually found a spot and walked two blocks to the market.  The lack of parking was no coincidence.  The place was packed.  I thought local farmers couldn’t make a living anymore because everyone wants to buy their food cheaper at big box supermarkets imported from some banana republic?  Apparently, these consumers didn’t get the memo.  They were out in droves.

Even someone as inept at gardening and farming as me could quickly tell that the produce on display here was of higher quality than the stuff I had bought earlier that week at the supermarket.  Not only that, at the supermarket, I’m lucky if I can find a clerk who isn’t running away from me.  Here, nearly every person working in one of these stalls had a smile and was pleasantly chatting with a customer. Sure the prices are higher, but I for one am willing to pay a little more for a decent tomato and a human interaction. Judging by the crowd, I’m not alone.

2. You must differentiate yourself

We immersed ourselves in the throng of people and started perusing the aisles.  It wasn’t long before I was overwhelmed with options.  If you’ve ever been to a large farmer’s market, you know that pretty much everyone is selling the same thing.  Sure, different farms sell different things, but there is always at least 3 people selling the same fruit, vegetable or other food, and oftentimes far more.  There must have been ten stalls selling tomatoes.

So, in such a situation, how do you convince people to buy from you?  Price won’t work, because people who are shopping for high quality produce, don’t care about price.  Quality is important, but arguably everyone around has quality products.  You need something to differentiate yourself.

One stall had built a fruit sculpture.  Another stall was actually boiling corn on the spot and selling it with butter and salt.  Another stall was staffed by a woman who had bright red hair that was sticking straight up.  These stalls caught my attention, and they were the ones that had the best chance of getting my business.

3. Free samples work

As we continued to wander around and fill up our bags with fresh produce, I noticed a trend.  Just about every stall I had bought from, had first let me sample their produce before I bought it.  There are two lessons to be learned here.  The first is that if you’re hungry on a Saturday afternoon, and don’t feel like spending any money, you can probably eat your fill off of the free samples at a farmer’s market.  The second is that offering a free sample of a quality product works, as my bags of veggies could attest to.

Many businesses are very scared of this practice, because of the cost of producing free stuff, whether in time, or in money.  The fear is that if the product exists for free, why would anyone buy it?  The internet has aggravated this debate with its easy access to free information, making content publishers cry foul.

Despite this, the fact of the matter is that free works. It works especially well when you give away a small piece for free and then charge for the whole thing.  Don’t be fooled, though.  Samples will only work if the product is good enough to make someone want to pay for it.  The sample is just the mechanism of distributing the knowledge that the product is that good.

4. If everyone else is doing it, and you’re not, you lose

As I came to my realization about the free samples, I began to pay more attention to the stalls that were doing the free thing.  The vast majority of the stalls were doing it.  There were only a small handful that were not.  It’s no coincidence that those stalls were the ones that had the smallest crowds around them.

Sometimes the market (no pun intended) forces you in a certain direction.  Even if there was a time when those farmers could have still sold their produce without giving samples, that time ended when most of the other farmers started doing it.  Follow the market, and don’t get left behind.  You might not always like where it’s going, but you still need to stay on top of it, otherwise, your competitors are going to leave you in the dust.

5. Customers value personality

After a couple of grueling (and delicious) hours of shopping, we decided to stop at the crepe stand in the middle of the market.  Crêperie du marché could probably make a lot of money, simply by existing in its current location.  What made it truly special, and something that I don’t mind telling you about, is that they went the extra mile.

I waited in line to order order our crepes, and as I did so, I noticed the gentleman taking the orders wore a striped shirt in the Parisian style.  When I finally began speaking to him, it was plainly obvious from his accent that he clearly was French.  The shirt wasn’t just a gimmick to sell more crepes.  It was who he was.  Unlike the majority of business transactions that I perform on a regular basis, where I’m lucky if the person on the other side even bothers to say hello, and a “How are you?” is an unexpected courtesy, I actually had a conversation with this gentleman.

He told me about the business, how long it had been there, informed me that they would be moving locations for the winter months, but would be staying open for that season for the first time since they opened.  He was genuine, and friendly, and had personality.  Then he handed me a loyalty card, and asked, “Do you come here often?”

“I will now,” I replied.

6. If you’re human, customers forgive ineptitude

We sat down at a bench as we waited for our names to be called out to collect our freshly-made crepes.  The entire process was visible to everyone in the market.  The man who collected the order would write it down on a scrap of paper, and hand it to the guy who would make the crepe or waffle, who would then pass it to the guy who filled it with the right sauce and/or fruit.  The part of me that used to manage operations cringed.  Their workflow process needed some work.

In the fifteen to twenty minutes that we sat there waiting for, and then eating our crepes, the four person staff managed to make at least three or four mistakes on orders.  Despite this, not a single customer got angry.  How is this possible?  Aren’t customers supposed to get enraged whenever a mistake is made?  Not necessarily.  Not if they see your business as people, and not as a machine.  People are fallible.  We make mistakes.  Everyone recognizes this implicitly, and so, when a person – especially a nice person – makes a mistake he is more likely to be forgiven.  When a corporate machine makes a mistake, we get angry, because these corporate machines are supposed to be infallible for the sake of efficiency.  If you’re human, you get a second chance.  If you’re a machine, you get replaced by a better machine.

Business lessons are all around us every day, we just need to keep our eyes open, and we’ll notice what works and what doesn’t.

What lessons have you learned from everyday life?  What other non-traditional sources of learning do you use?

A hundred years ago, there weren’t a ton of options for advertising your business.  You could post fliers or you could advertise in the local newspaper.  I suppose you could also have hired a town crier, but I think they had stopped doing that by the early 20th century.  Today, a business has no shortage of options for advertising.   From traditional print media, to broadcast media like radio and television, to internet marketing and everything in between. An advertiser’s biggest dilemma is picking the right medium.

I’m a firm believer that a proper advertising effort needs to be multi-pronged and needs to take advantage of several media.  That’s not where most businesses go wrong.  The idea that you need to diversify your advertising is accepted.  The issue that most businesses face however, is that they don’t differentiate between media and seem to use every media in the exact same way for the exact same purpose.  That’s just crazy.  A bicycle and an airplane are both transportation methods.  They both get you from point A to point B, but beyond that they have entirely different purposes.  You wouldn’t take a plane to get exercise or commute to work, and you wouldn’t ride a bicycle to your business meeting in Beijing (unless you live in Beijing, in which case, you almost certainly are taking your bicycle to your business meeting).  The point is: all advertising media serves the same basic purpose, but beyond that each medium has its strengths and its weaknesses and should be used as such.

This is true in online, just as in traditional media.  Different media work better for different demographics and for different marketing purposes.  If your target demographic is 18-25 year old males, are you going to advertise in Home & Garden?  Of course not. So, why do I frequently see products geared towards that 18-25 year old male demographic advertised on primetime television?  Have they not looked at the numbers?  18-25 year old males don’t watch primetime TV (unless it’s Monday Night Football).

Similarly, if you have a super-niche product, don’t buy a billboard.  Last time I checked, billboards were expensive and their conversion rate was low. How effective can they be for a product that only appeals to 1 in 200 people to begin with?

If your goal is to maximize your return on investment in the short term, use a medium that is going to do that.  In my experience, the best way to accomplish this is to use a pay-for-performance medium.  The best known is pay-per-click advertising on Google, but don’t neglect Yahoo or MSN (Bing!).  Also, aside from pay-per-click search advertising, there are a ton of pay-for-performance options coming about.  Some publishers are offering pay-for-performance video products now, where you have options of paying by the play, or by some form of other conversion.  This kind of advertising is great for short-term ROI maximization.  What it’s not great for is branding.

Far too often, clients will ask me what it would cost to appear first on Google’s search results page under the sponsored links section.  This practice has been popularized by certain agencies that have built an SEO-like price structure around SEM (pay-per-click) advertising and are selling “guaranteed 1st place” positions.  This dubious agency practice aside, using SEM to give yourself position is a bad idea, and is often a case of ego-marketing.  First off, the structure of SEM is based around garnering the most relevant click-throughs possible for the least amount of money.  For various reasons, using the medium to rank first on Google is like using a billboard to market a new fMRI technology.  First off, it’s ridiculously expensive.  Secondly, because it’s an auction format, if you have two players in the same market making the same mistake (and there always are), they’ll blow the roof off the cost of appearing first, and the only winner in that battle is the publisher of the ad.  Third, even Google has determined that you don’t have to be number 1 to convert well.

If you are looking for branding and exposure for your brand, use a different medium that will get a lot of eyeballs for a fixed price.  These pay-for-placement media have been around longer than pay-for-performance media and are still valuable.  Examples include buying ad space on websites or in print media, buying a spot in a directory, either print or online depending on your business, billboards, tv spots during appropriate time slots, etc.

You also see this issue arising a lot in newer media when advertisers haven’t quite figured out how to use the medium yet.  The topical example is advertisers who use Twitter as simply another broadcast advertising form.  These advertisers haven’t had tremendous success and are blaming the media for the short fall.  However, other advertisers, who are using Twitter for permission marketing are having great success in improving their brand image and connecting with their customers.

Bottom line, figure out what each medium is good for, and use it for its purpose.  Don’t ride a bicycle to Beijing.

What are your favourite targeted forms of media?  What do you use them for?

You’ve built a business.  You’ve put in a lot of hard work, blood, sweat and tears, but now your business is built.  You are proud of your business and rightfully so.  Building a business is one of the hardest things you’ll ever have to do, and you should be proud and want to show off a bit.  But your marketing is not the place to do it.

The purpose of your marketing strategy, whether it be online or offline, is to attract new customers. Everyday, as both a consumer, and a person who works with businesses, I see people forget that, and instead focus on how awesome they are.  Expounding about how great you, or your company is, is not the same thing as demonstrating to a consumer why he should become a customer.  Focusing your marketing on you is what I call ego-marketing, and it’s more common than you think. You might be doing it yourself and not even realizing it.  Here are four ways you can spot ego-marketing.

Ads that are bigger than they need to be

In today’s evolving world of performance marketing, bigger is not always better.  The key is to look at your return on investment.  Often, smaller, better targeted and more well placed advertising will have a greater ROI than bigger, more expensive advertising.  A small ad in a trade magazine is better than a half-page ad in a mass-market glossy.  The third position for a PPC ad is better than the first.  Most of these things make sense when we evaluate them critically, so why do so many people still do them?  Because it feels better to see your ad in first place, and it feels better to see a big billboard with your brand on it.  It’s ego-stroking.

Copy that focuses on features, and not benefits

This is a cardinal sin of copy writing, but you still see it often because people either write their own copy and don’t realize it, or people hire copy writers and tie their hands.  Business owners will focus on the features of their products, as opposed to the benefits to the customer because they’re looking at it from their own perspective.  As a business owner, when you’ve got a product with cool features, you love to talk about them, because, hey, they’re cool!  Think about when you buy a new TV and your friends come over and you want to show it off to them.  What you talk about are the television’s features: this many hertz, that much resolution, this many millions of colours, etc.  You’re doing that because you’re doing it for your benefit, not for them.  Because you’re showing off your TV.  If the sales guy at the store had sold you the TV the way you bragged about it to your friends, you probably wouldn’t have bought it, though.  Bragging to your friends is fine, bragging to your customers doesn’t work so well.

Excessive use of accolades

I was browsing a website the other day, and as I scrolled down the page, all I saw were awards and achievements.  It got to the point that I got to the end of the page, and not only was I bored, but I also wasn’t sure what the company whose site I was on did exactly.  It’s an extreme example, and the use of accolades in marketing can be helpful to show value and quality, but over-doing it becomes tiresome and boring to your potential customer.  Think of your advertising as a conversation at a cocktail party.  No one wants to hang out with the guy who spends the whole evening talking about all of his achievements.  They want to hang out with the guy who is interesting, intriguing and has something to offer without having to talk about it all night long.

Ads that focus on the business, not the customer

I enjoy learning the history of the companies that I give my business to.  It helps me connect with them, and makes for a more engaging experience than simply me just handing them my money.  However, I only do this for the companies that I know I’ll be giving my money to.  Before I make that decision, I’d much rather hear what the customers of the business have to say than what the business has to say.  So, if your marketing strategy puts a long description and history of the business before customer testimonials, you’re ego-marketing.

How to recover from ego-marketing

The good news is that the best way to stop ego-marketing is to recognize that you’re doing it and stop it.  Pretty easy.

The bad news is that it’s an easy trap to fall back into.  Large companies have it easier because employees are not as invested in the company and in the product, so it’s easier to market it without that pride coming through.  Smaller companies are very closely invested in their business and rightfully so.  As I said in the beginning, they are entitled to be proud.

If you’re concerned about falling back into the trap of ego-marketing, keep in mind that you’re already sold on your own products, so you might not be the most objective person to know what it takes to sell them.  If you want that objectivity, ask others.  Ask you current customers what sold them on your product and focus on that.  Ask complete strangers (whether in the form of market research or just an informal chat) what they would need to hear to purchase your services.  Ask a marketing expert; it’s their job to know what works, and they have the distance necessary to produce convincing marketing.

What do you think?  Am I being too harsh?  Can ego-marketing actually be effective?