When it's time to make a purchase, how do we know where to go to find what we want? We can ask our friends where they go. We can look in newspapers and magazines for advertisements. We can search Google or cruise Facebook. We can look up at the billboards as we drive to work in the morning. The fact is this type of information inundates us on a daily basis.
Now, how about your prospects? When it is time for them to purchase something that you sell, do they know that you are an option for them? How much about your business do your prospects know when they decide to go looking? Are you near or at the top of their list of places to go? You should be, and you can be. And the way to make this happen is through your promotional activities.
From a business perspective, “promotion” is the act of attracting qualified prospects to your business. This includes all activities that have this effect… from advertising to cold calling. It is the job of your sales system to convert these prospects into customers, but an outstanding promotional system can take some of this burden away. The better the job it does, the greater the chance for a sale down the funnel, because the prospect enters your sales system “that much more qualified.” In fact, if your promotional system does its job well enough, your sales system could potentially be reduced to little more than “order taking” and “customer support.” This happens regularly in direct marketing companies, such as the L.L. Bean Company, but the principle may be applied to any business to varying degrees.
Attracting New Business
Done properly, your promotional activities will keep your brand prominently in the minds of your prospects so the moment they decide to make a purchase, there you are, right in front of their noses. The problem is, it may not be cost effective to put your message everywhere, all the time, so you need to make some decisions.
By targeting your promotional efforts as directly as possible toward your Target Market and by focusing on the solutions to your prospects’ greatest needs, you can greatly increase the quality of the leads you attract without increasing your costs. The higher the quality of your leads, the more likely they are to buy.
When looking for new business, your Target Market Profile will help point you in the right direction, but there are some specific places you can begin looking. Following is a list of the three best sources of new business, in order of their effectiveness.
The best source of new business is your “current customers.” This includes:
- Repeat sales — from returning customers.
- Increased sales volume — larger sales to existing customers.
- New sales — additional sales to existing customers.
Some advantages of your “current customers” as a source of new business are:
- Your promotional expenses are minimal.
- You have direct access to them because you know exactly who they are.
- You understand their specific needs. After all, you have been satisfying those needs for some period of time now.
- They have a history of buying from you so they're likely to do it again. In fact, they are more likely to buy from you than anyone else.
- If they are happy with your products and services, they are likely to tell other qualified prospects about them. For this reason, they are your best source of referrals.
The second best source of new business is “referrals,” especially the ones that come from your best customers. Some advantages of “referrals” as a source of new business are:
- They cost considerably less to generate than the leads attracted by your advertising. In fact, they often come just for the asking.
- They tend to be better quality leads because someone who knows both your business and the prospects’ needs has made the referral. This means that before you begin to analyze their needs, you already know that, more than likely, you will be able to help them.
- They are often pre-qualified by your referral source. If they already have an interest in your products or services when they show up, a sale is much more likely. In some cases, they will be completely pre-sold by your referral source. All that will be left is to complete the transaction and live up to your promise.
The third best source of new business is your “Target Market” as a whole. This is a much broader approach than the others, but done properly, it can produce outstanding results. It's the job of your promotional system to bring in this business.
Some advantages of your “Target Market” as a source of new business are:
- This is the only place you’ll find a large group of potential leads, who are not otherwise aware of your business.
- Your Target Market likely contains a larger pool of potential new business than your existing customers or referral list.
- As a bonus, marketing to your Target Market often has the effect of reinforcing your market position to those who are already aware of your business. For example, if one of your customers sees your advertisement in the newspaper, their relationship with your business will be reinforced.
Given this, where should you be spending the majority of your marketing budget and energy? Typically, most small-businesses focus too much of their attention on prospecting for new business and too little on their existing customers. Most promotional activities have the potential to bring in sales, but your existing customers are almost always your best source of new business. Your existing customers already understand and appreciate the value of your products or services. They have a history of buying from you and the cost of a sale to an existing customer is considerably less than the cost of generating a brand new customer. Add this to the fact that they are your best source of referral business and you begin to see the true value of keeping your good customers happy.
By no means is this to suggest that you eliminate your advertising campaigns. Marketing to your Target Market is an essential component of any good promotional system. Simply pay proper attention to your existing customers. The idea is to maintain a healthy balance in your promotional efforts.
Developing Your Promotional Strategy
Your Promotional Strategy is concerned with the communication of your promotional messages (i.e. advertising) to your Target Market. It comes as no surprise that an effective Promotional Strategy begins with an effective Market Position.
As the example discussed in Pricing Strategy of a “buy one get one free” sale on Rolex watches clearly shows, it's important to make sure that the message you deliver to your prospects is consistent with your Market Position. Equally important, however, is the method you choose to deliver that message.
Your promotional options include anything you do to get your marketing message out to your prospects and customers, and are limited only by your imagination.
Some examples include:
- Sales representatives
- In-store promotions
- The Internet
- Publicity events
- Media stories
- Event sponsorship
There are literally thousands of possibilities, all of which will work for some business somewhere, but few that will work for every business, everywhere. A more comprehensive table of Promotional Channels can be found later in this chapter.
Your promotional options may be unlimited but they won't all give you the same results, and since your promotional budget is not unlimited, you'll want to narrow down your choices. Your Promotional Strategy will help you do just that by filtering out ideas that might inadvertently send the wrong message.
As you consider your promotional options, use the following questions to help clarify your thoughts.
- What general look, sound, or “feel” will fit best with your Market Position? Your goal is to have your Target Market respond favourably to the way your message is delivered. If you sell children's toys, for example, you may choose a simple, open, fun approach with bright colours.
- What kind of specific messages will best support your Market Position? If you sell flower arrangements, for example, you might use visual, emotionally-driven messages, where something more technical might require information-rich messages. In all cases, however, you should try to stick to one central theme that addresses your prospects' needs or wants.
- What types of promotional media will best support your Market Position? (i.e. newspaper advertisements, seminars, trade shows, etc.) A manufacturer of technical engineering equipment, for example, would probably suit a trade journal better than a newspaper. And of course, on-line marketing should be party of nearly every business strategy.
Be sure that the selected medium actually reaches your Target Market. An outstanding marketing campaign that never reaches your prospects is a huge waste of time, energy and resources. If your customers are business owners, for example, you're more likely to reach them through radio than through television simply because few business owners have time to watch much TV. Before advertising with any source, always ask to see a profile of their Target Market.
Use your answers to the previous questions to write your Promotional Strategy in the space below. This will provide you with a consistent direction for your promotional campaigns.
You'll find this exercise useful even if you end up using an advertising agency. Your market position is far too important to simply be delegated or outsourced away. If you don't offer any direction or direct feedback, you can end up with an ad campaign that looks and sounds great, but produces little in the way of results.