Steps to Success with Small Business Marketing

by smallbizbee · 9 comments

I took a road trip a couple years ago through Arizona, New Mexico, and into Texas on Interstate 10. For those of you unfamiliar with that route, it isn't extremely populated and you can go miles and miles between towns. Along the freeway I began to see billboards for "Coldest Drinks in the State Exit 125", "200 Types of Beer Exit 125", "Hungry for Snacks? Exit 125"...on and on a billboard for the same store about every mile, and we were 30-40 miles from Exit 125. Anyway, after seeing no less than 40 of these bill boards we just had to stop at the now famous (to us) Exit 125 and grab something to drink. The place was pretty well packed with other travelers stocking up on cold beer and sodas. I asked the guy behind the counter if he was staying busy and he replied "Yeah, ever since they put those billboards up". I said, "no kidding, they made a difference huh?", and he replied "Yup, I guess marketing works"

I think that story sums up what most small business owners know about marketing and advertising, it works! But for a lot of us we don't know where to begin, and how to market our small businesses in the most effective fashion.

All marketing campaigns have similar steps and processes that you will need to work through when you begin to market your business. Whether you are advertising your small business in print, putting together a small business email marketing campaign, or cross marketing using various media types, working through the steps below will put you on the right path to success, as well as help ensure you get the desired outcomes from your marketing work and dollars.

Identify the Target Market

It's not a coincidence, and shouldn't come as a surprise to you that most concepts in small business start with target market. You need to have a good understanding of who is buying your products and services and why. If you haven't already done so, now is the time to drill down into this and get a good handle on it before you proceed with marketing. Without a good understanding of your customers and their motivation to buy from you, any marketing plan you prepare is destined to fail.

For example, if you sell ice cream shakes and notice most of your customers are coming in from the Weight Watchers clinic next door, you would need to understand the motivation for them coming to before you marketed to all the Weight Watchers clinics in the city. In this case it's easy to see you're getting their business due to your proximity to the clinic not because your product would necessarily appeal to anyone in Weight Watchers.

Knowing your customer well, and their motivations behind buying from you is a critical step in getting your marketing campaign headed in the right direction, and using your marketing dollars most efficiently.

Set Your Budget

Realistically evaluate how much money you have available for marketing. Don't be discouraged if you are in a position where there aren't a lot of dollars available, most of us are in that same position. Your goal in creating your marketing plan is to maximize every dollar you do have, so that if you spend $50 on marketing it brings in $75 worth of business. Set a comfortable marketing budget and then stick with it. It will be easy to tack on a little bit extra here and there, but the point of marketing is the most bang for your buck and that is independent of budget parameters, so don't think that spending more means getting more.

Specifically State the Desired Outcomes of Your Marketing Campaign

You should set a goal for each marketing campaign you undertake, and the SMART Goal template is a great way to do that. Well isn't the goal of all marketing to get more business? Typically yes, but if you do not state exactly what outcomes you want to see, you'll never know if your marketing was successful or not. More business can come in many different ways. Maybe you have a new product you need to get the word out about, or possibly lure clients from a specific demographic or region. Getting specific will help you focus, and provides the benchmark metric to analyze success.

Identify Potential Forms of Marketing

For every form of marketing you can find, ask yourself these questions:

1. How does this reach my target market?

2. Is there another form of advertising that would reach my market more effectively?

3. How many potential eyes in my target market will this reach?

4. How many of those potential customers will act on my marketing?

5. Is it within my budget? (This question will eliminate more potential marketing outlets than any other)

The exercise of asking these questions in regards to every kind of marketing available to you will help you weed out the bad ideas, and focus your marketing budget on those ideas with the greatest chance of success.

Let's work through an example:

I run an event management company that specializes in road running races, 5k's, 10k's, Marathons, etc. for people who like to run to stay in shape and compete against other runners. There are numerous ways we can advertise our races, and I have $1000 to spend marketing each event. Fliers, brochures (handed out personally), radio, internet outlets, running stores, we could put ads on TV, or in specialty magazines geared towards runners. For every one of those advertising outlets I would ask myself the above questions. All would hit my target market. I have a good idea the number of people who would see each advertisement. I can research what the response rate is for each and make a note of that. And lastly, I have to discard TV, Radio, and internet advertising due to budget. So I am left with fliers, brochures, and specialty magazine advertisements as my marketing vehicles of choice. This becomes my "short list", and the focus from here on out.

Analyze Your Cost Per Potential Customer

Now comes the one piece of analysis that will help you use your marketing dollars in the most effective way possible, returning that "bang for the buck" we are aiming for.

For each form of marketing/advertising now on the short list, you need to decide which returns the most customers for the least amount of marketing dollars...but how do you do that?

Dollars spent is your marketing budget. Potential new customers would be the estimated reach of your campaign (how many people are going to see it) and estimated response rate is the estimate of the % of people who will act on your marketing.

So what do we do with this information? Let's continue with the example.

For my event management business we identified fliers, brochures, and speicaly magazine advertisements as my potential marketing avenues. Now we need to compare them to see where my $1000 marketing budget should be spent.

Fliers

4000 fliers for $1000 and have them distributed in race bags at similar races in my target area.

Potential new customers would be 4000, or everyone who gets our flier.

Estimated response rate is around 2% (learned from experience and research)

CPPC = $1000/4000*.02 = $12.50

Brochures

2000 brochures for $1000 to be handed out personally at similar races in my target area.

Potential new customers equals 2000

Estimated response rate is about 10% (this is from experience, they like the personal interaction which makes for higher conversion rate)

CPPC = $1000/2000*.1 = $5.00

Magazine Advertisement

A one month, 1/8 page ad cost $1000

Potential new customers equals 7,000 (circulation of the magazine)

Estimated response rate 2.5%

CPPC = $1000/7000*.025 = $5.71

The most bang for my marketing buck comes from the brochure advertising as it provides the most potential customers for the lowest cost per potential customer.

Focus your marketing dollars on those advertising outlets that have the lowest CPPC. This will maximize your return on investment, and allow you to leverage your dollars efficiently regardless of the size of your budget.

Implement the Advertising Campaign

The next step is to implement the campaign that you've chosen by working through steps outlined above. 1-5..........................................................................................................................................

Track and Analyze the Results

The final step is to track and analyze the effectiveness of your marketing efforts. The above example didn't have a goal identified, but your campaign will. Ask yourself, did you meet the objectives you outlined in step 3? Where did you fall short? What was the main reason you did/did not meet your goals? Did your campaign exceed your expectations, why was that? Continue to look at how your campaign did, and look for ways to make it better next time. This is an important step in ensuring your marketing will be successful in the future. Remember that even if your marketing was wildly successful this time, you can always improve it to be even better next time.

I hope you can see that by knowing your target market, setting a realistic budget, having goals for your marketing campaign, identifying potential forms of marketing and targeting the advertising with the lowest cost per potential customer, then following up on the results you will be setting your business up to run many successful advertising and marketing campaigns. This alone will go a long ways in positioning yourself one step ahead of the competition.

Have any marketing tips you'd like to share? We'd love to hear about them in the comments section.