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Jewish World Review Jan 30, 2001 / 7 Shevat, 5761

Small Business Advisor by Paul Tulenko

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Consumer Reports


Before advertising, do your homework

http://www.jewishworldreview.com -- ARE YOU primarily a brick-and-mortar business with a need to expand your advertising program but have concluded that what you're doing isn't working? Do you have questions like, When should I advertise, How much should I spend, Which products do I push, Do I go for immediate sales or long haul recognition, Which media should I use and other expensive questions? Stop! You're putting the cart before the horse! Plunging into advertising without a marketing plan could be your most expensive mistake yet. Hit-and-miss advertising could cost you an awful lot of money without any real benefit. It won't cost much to have a marketing consultant (not an advertising agency) help you develop a plan that can be implemented over the next several years. Here's what you need to know.

WHAT ARE YOU DOING NOW? You can't plan a trip to Chicago unless you know where you're starting from, so what makes you think you can plan a marketing campaign without getting a handle on what you are now doing? Answer the following: Who are my customers, How old are they, What are their gender, Where do they live, and When do they shop at my store and why? Who are my competitors, What products do they carry at what price and What do they offer that I don't? What are the categories of most of my sales? Which are most profitable? Which take the most time or money to implement? Which are necessary to attract customers, and which ones are there because I liked them? What percentage of business is repeat? From what part of town do my customers come?

If you're having trouble with answers, that's why you need a marketing consultant.

WHAT ARE YOUR GOALS? Next, define type and extent of your growth: What would you like your business to look like in three years? Who would be your competitors, your customers and your suppliers? What products or services would you be providing? What personal and business goals would you like to have accomplished? What would be your gross sales?

WHAT STRATEGIES WILL YOU USE? Now let's get to 'there': Which products or services would be best, and at what sales volume, price and profitability? What selling tactics would be more appropriate, in-store, telemarketing, outside sales, Web-based or something else? How will you distribute your product or service; direct mail, retail, discount, catalog, Internet, door-to-door or some other way?

IMPLEMENTATION: Answer these questions concerning advertising, public relations and special business relationships: Which method(s) would best enhance and complement my strategy: TV, radio, newspapers, magazines, flyers, billboards, Web site, door-hangers, demonstrations, seminars, newsletters or something else? What public relations methods are most useful to change or enhance the public's perception of me and my company? Can I work through third-party suppliers? Is joint marketing available?

Even after developing a comprehensive marketing plan there remains the task of selecting from the dozens of advertising opportunities out there. Of course, you can hire an advertising firm or agency; but be forewarned; most advertising firms won't give you the good deals unless you have an annual advertising budget of $100,000 or more. So what do you do? Here are some shoestring ideas.

Co-op I: Ad repetition builds awareness. Consider sharing an ad campaign with two complementary businesses. Three times the money buys three times the advertising. Examples might be a bookkeeper teaming with an accounting software dealer teaming with a printer supplying forms.

Co-op II: Most media need to advertise themselves, just as you need to advertise. Join one or more in a contest, give-away, or some other activity that will promote all of you. Your cost may be a product or a service, but the profits you generate could be hundreds of times that value.

Co-op III: The broadcast media has only one thing to sell: time. When the time has passed, there's nothing more to sell and that time is lost forever. Most radio, TV and cable stations have a super special price for 'filler' ads, ads that can run anytime there is empty time to fill. Costs of these may be as low as $1 or $2, including TV ads! Ask!

Exploit opportunities: Let's say you're solicited with a question like, Would you advertise in our (newsletter, magazine, paper, on our station, etc.)? These may be charities to which you may wish to donate, and they could be gold if they fit into your marketing plan. Try this response: "I find that a one-time ad just doesn't help me, I need to follow up with a personal phone call, and maybe mail a brochure. I'll take out an ad if you will (give-rent) me your mailing list." If they agree, be prepared to follow up; it could be a success story for you.

The 30 percent rule: You are probably aware 70 percent of your business comes from repeat business. This means 30 percent is new. To maintain present sales you have to have three new customers for every seven existing customers, more if you wish to grow. Only advertising can do this. Each time you advertise, ask yourself, Is this targeted at getting new customers or just retaining existing customers? Every single bit of advertising should contain a feature, a fact and a benefit or you are wasting your advertising money.


Paul Tulenko is a small business expert. Comment by clicking here.

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