Current at: 11 August 2008
Smart Marketing, Smart Budget
Smart Marketing, Smart Budget
What does it mean to effectively promote your business? Put simply, it means to market on a smart budget, develop a strong value proposition, understand how buyers think and generate more sales above costs to increase profits.
Using a smart budget, having a strong value proposition, and understanding how buyers think will help you to implement strategies to raise awareness about your business, create interest in how your business products can help, and encourage people to buy your products and services – all key factors in generating sales.
What is smart marketing?
Smart marketing is promoting the right products, in the right place, at the right price, so you can generate sales above costs to make a profit.
What is a smart budget?
A smart budget is where you spend less than the net present value (NPV) of a customer to gain a customer. Consider the following:
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What is your average revenue per customer? (e.g. $10,000 per year.)
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What is the average length of time a customer stays with you? (e.g. three years.)
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What is your cost of capital? This represents the measure of risk in your business. On average this is about 15 per cent for medium-sized businesses.
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What is you net profit margin before marketing (e.g. 10 per cent. N.B. Net profit = income – expenses, before marketing.)
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NPV of a customer - This represents the amount of money in your pocket, before marketing, for an average customer. Don’t spend more than this per customer to gain a customer.
The
Marketing Mix
The four Ps of marketing are: Product, Price, Place and Promotion. This article focuses on promotion, and knowing your value proposition. That is:
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What is your product or service - what are you selling?
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What are its features - describe your product or service.
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What are its advantages - describe how it can help your client.
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What are its benefits - detail how it can meet typical explicit needs.
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How can it be accessed - tell people how they can buy from you, or how to access more information.
Drawing up a simple table which includes these key words will help to identify your value proposition.
How do buyers think?
The basic needs satisfied by buying products are interest, ease, gain, fear, imitation, security and pride. Understanding how buyers think will help you retain and grow loyal customers, raise awareness, create interest and stand out from the crowd, make it easy to buy, and encourage people to make purchases.
Building your brand
It is important to build and deliver your brand. You can do this by building brand visibility (market recognition), creating brand vitality (relevance and meaning), and delivering brand clarity (consistency and vision).
It is also important that you tell your story including:
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About (who you are) – e.g. Pool Cover Consultants
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Features (what you do) – e.g. We make and install high grade PVC automatic pool covers.
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Benefits (what’s in it for me) – e.g. Our covers are compact, provide year round safety for your family and will save you millions of litres of water.
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Access (how do they contact you) – e.g. For Pool Cover Pricing Freecall 1800 200 100 or visit our website at www.walkonwater.com.au
Target your niche
A lot of people will never buy from you. Identifying these people early can help you focus more time and attention on the prospects who are more likely to buy from you. This helps increase your sale conversion rate and reduce your cost of sale.
Create great ads
The average person sees as many as 5000 advertisements each day. Make sure your advertising stands out!
Create great headlines
Headlines are the single most important element in your advertising. If it doesn’t grab the reader’s attention, they won’t read the rest of it.
Less than one in five readers read on from the headline. Improving it can mean the difference between an advertisement that pays off and one that will simply be a waste of time and money.
To create great headlines, put yourself in the shoes of the reader. Think about who you are trying to reach. What ‘hot buttons’ can you hit to make them stop, read on, and respond?
A compelling headline must appeal to an immediate need. It should highlight the key benefit of your product or service, make a promise, ask a question, pose a challenge or use a testimonial.
Get your message out
Make sure people see your message often. Get your message out there using as many of the various means available that you can afford. The most immediate are stationery, business cards and motor vehicle signage. Other advertising options include print, online, voice, wireless, and mobile; that is radio, television, newspapers, magazines, directories, billboards, bus shelters, mobile SMS, awards, sponsorship, clothing, stickers, office signage plus more.
Make use of point-of-sale material such as posters and banners, brochures and flyers, sales kit and website content.
Make sure you are listed in the White Pages. More than 10 million Australians use the White Pages every month when they know the name and need the number. Every home and business is entitled to a free basic listing, which includes print, online (whitepages.com.au) and voice (Telstra Directory Assistance 1223 or Sensis 1234).
Don’t forget HIA’s own tradebuild.com.au. This site helps consumers find and access HIA members, is integrated with HIA eQuote, and is free to HIA members.
Networking
A great marketing tactic is networking – the cheapest marketing approach hands down! It is time consuming and you must be genuine in your efforts, but it works. Find groups of like minded people and get to know them. Share what you know and build trust.
Drip and viral marketing
Drip marketing
– Build a database of potential customers. Send a regular message to raise awareness about how you’re helping meet the needs of other people just like them and encourage them to access the benefits of doing business with you. Follow up with a courtesy call to ask how things are going and if there is anything your business can do to help at this time.
Viral marketing
– If your customers are satisfied, they can be good marketers for your business. Ask for referrals as the second close in sales, e.g. “John, if you are happy with our services, can you refer me to someone else we may be able to help?” You can also encourage customers to refer a friend by having a competition to reward those customers who refer workmates, family and friends.
Sales promotions
Sales promotions are those activities other than advertising and personal selling that stimulate interest, trial or purchase of the product. These include coupon promotions and trade show booths, and typically result in an immediate, measurable response.
Learn from your customers
When customers first contact you, ask them “how did you hear about us?” Keep track of their responses, find out what works and do more of it. Find out what doesn’t work and stop wasting your time and money on it.
Maximise your HIA membership
Do your potential customers know that you are a HIA member? You can display a sticker on your work vehicle, or on your premises. Also consider including the logo on your website, business cards, stationery and email signature. Your potential customers will then know that you are a HIA professional, and HIA members – the best in the business, can undertake the job professionally and efficiently.